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Weight-Loss Medications Like Ozempic and Wegovy Show Promise in Boosting Economic Productivity
Medications for weight loss, including popular drugs such as Ozempic and Wegovy, have enabled millions across the nation to shed substantial weight and are now indicated by new research to potentially enhance personal and national finances. These anti-obesity drugs are being studied for their broader impact beyond individual health improvements.
Obesity’s Significant Economic Burden
The adverse health effects of obesity are well-documented, significantly elevating the risk of serious conditions such as heart attack (25-60% increased risk), diabetes (30-53% increased risk), and stroke (64% increased risk). Beyond health, obesity imposes a considerable economic strain, costing the economy an estimated $1.4 trillion each year. This substantial figure encompasses healthcare expenditures, reduced workplace output and absenteeism, premature mortality, and disability-related costs.
Personal Financial Gains from Weight Loss
Studies have demonstrated that weight reduction benefits individuals financially, in addition to broader economic advantages. A study conducted by Johns Hopkins University researchers revealed that a 20-year-old transitioning from obesity to overweight could save approximately $17,655 in future medical expenses.
Limited Access to Weight-Loss Drugs
Approximately 15 million individuals in the United States have utilized Ozempic or similar drugs for weight management since this class of medications gained prominence around five years ago. Despite the potential benefits, access to these costly treatments, initially developed for diabetes management, remains restricted. Insurance coverage is typically limited to cases where medication is deemed medically essential, primarily for patients with diabetes or prediabetes.
Study Suggests Broader Access Could Generate Trillions
However, researchers at the University of Southern California (USC) suggest that expanding access to these obesity treatments for all obese Americans could yield significant financial benefits. Their projections indicate a potential generation of $10 trillion per year for the nation. This economic boost would stem from increased productivity, extended working years, decreased healthcare costs, improved overall well-being, and increased longevity.
USC research indicates expanded access to obesity medication could generate $10 trillion through enhanced productivity, reduced healthcare costs, and longer lifespans
Expert Insights on Lifetime Value of Obesity Treatment
Dr. Alison Sexton Ward, an economist and health policy expert at USC’s Schaeffer Institute, emphasized the long-term economic value of obesity interventions. “While the immediate expenses of anti-obesity medications have drawn attention, our analysis underscores the importance of considering the lifetime benefits of treatment,” she stated.
“Expanding access will prevent or postpone obesity-related health issues, leading to improved quality and length of life for numerous Americans,” Dr. Ward added.
Benefits Extend to Younger, Healthier Adults
USC researchers found that the economic advantages of broader access to weight-loss medications extend beyond diabetic and severely obese individuals. Younger, healthier adults, specifically those with lower diabetes risk scores or moderate obesity (BMI 30–39), who initiated medication between 25 and 35 years of age, experienced the most significant gains, including an average increase of 1.8 years in life expectancy.
Quantifying Economic Gains by Age and Risk Group
The research team also calculated the potential economic value generated by providing weight-loss drugs like Ozempic to individuals in various age groups with differing diabetes and obesity risks.
Examples of Economic Impact
- For a 25- to 34-year-old with obesity receiving weight-loss medication, the estimated economic benefit is approximately $208,000 per year. This is attributed to increased productivity, reduced healthcare costs, enhanced well-being, and extended lifespan.
- For a 35- to 44-year-old with a high diabetes risk, utilizing a weight-loss drug is projected to generate $115,000 per year.
Call for Policy Change and Expanded Access
Dr. Dana Goldman, a co-author of the report and founding director of the USC Schaeffer Institute for Public Policy & Government Service, advocated for policy changes to broaden access to these medications. “Expanding access to anti-obesity medication is likely the single most impactful policy to improve public health in America,” he asserted.
Cost and Coverage Challenges
Medications like Ozempic, Wegovy, Zepbound, and Mounjaro, utilized by millions for weight loss, can cost upwards of $1,200 per month without insurance coverage. Despite the clinical and economic benefits, it’s estimated that 40 to 60 percent of insurance claims for these medications are initially denied. However, there is a growing trend of employers incorporating coverage for these drugs into their employee health insurance plans.
Government Consideration of Expanded Coverage
The USC analysis coincides with ongoing federal government discussions regarding a proposal to expand Medicare and Medicaid coverage for anti-obesity medications for seniors and low-income individuals, respectively. Such policy changes at the federal level are anticipated to encourage private insurers to broaden their coverage as well.
Methodology of the USC Analysis
Researchers at the Schaeffer Center employed the Future Adult Model to project the long-term health and economic consequences of anti-obesity medications for adults aged 25 and older without diabetes.
One estimate indicates that providing a 25- to 34-year-old with obesity a weight-loss drug could generate approximately $208,000 annually (illustrated in graph on the right)
Long-Term Economic Impacts
The analysis considered factors such as age, body mass index (BMI), and diabetes risk, while also accounting for anticipated drug price reductions as generics enter the market around 2032, estimated at about half the current price. Researchers assessed the ‘social value’ of expanding medication access by quantifying factors such as increased healthy lifespan years, chronic disease prevention, and enhanced workforce participation and societal contributions.
Early Intervention for Greater Payoff
Their findings highlighted that early intervention to prevent obesity and diabetes yields significantly greater returns compared to treating these conditions in older individuals. For example, a healthy 25-year-old with obesity and a low to moderate diabetes risk who begins treatment with Ozempic or similar medication is projected to gain more healthy years over their lifetime compared to a 35-year-old with similar risk factors simply due to earlier treatment initiation.
Early intervention strategies can prevent the onset of severe and costly health complications later in life, resulting in financial savings for both the individual and the healthcare system as a whole.
Broader Health and Economic Benefits
An estimated 38 million Americans are affected by diabetes, a condition that incurs approximately $412.9 billion in annual treatment costs. These costs include direct expenses such as doctor visits, hospitalizations, and insulin, as well as indirect costs like lost workdays, decreased job performance, and premature death.
In addition to their effectiveness in treating type 2 diabetes and obesity, this class of medications has demonstrated potential in reducing the risk of worsening heart failure and heart disease, conditions that cost the U.S. approximately $252 billion annually. Heart disease remains the leading cause of mortality worldwide, affecting around 48 percent of American adults, with projections indicating a rise to 61 percent by 2050.
Early Treatment is Key to Maximizing Benefits
Dr. Darius Lakdawalla, chief scientific officer at the Schaeffer Center, emphasized the importance of early intervention. “Insurers often restrict coverage of anti-obesity medications to patients with more advanced conditions, such as prediabetes or diabetes. However, our analysis suggests they are likely missing an opportunity to prevent more severe and costly outcomes through earlier treatment intervention,” he concluded.