A prominent economist from Goldman Sachs has proposed that the U.S. economy might witness a significant uptick in growth fueled by the expanded use of GLP-1 weight-loss medications, such as Ozempic.
What Happened: In a recent analysis, Jan Hatzius, the chief economist at Goldman Sachs, indicated that if an estimated 60 million Americans were to adopt GLP-1 medications by 2028, the U.S. Gross Domestic Product (GDP) could potentially increase by an additional 1%.
He emphasized that advancements in healthcare could lead to a remarkable decrease in the economic burden caused by health-related issues, which often hamper productivity.
“Taking into account the current losses in hours worked due to sickness, disability, premature mortality, and informal caregiving, our projections suggest that the GDP could be over 10% higher if health challenges didn’t constrain labor supply in the U.S.,” Hatzius remarked, highlighting the systemic inefficiencies tied to public health.
Notably, GLP-1 drugs, such as Ozempic and Mounjaro, are produced by pharmaceutical giants Novo Nordisk and Eli Lilly and Company, respectively. These medications have garnered acclaim for their dual effectiveness in managing type 2 diabetes and facilitating significant weight loss, which has catalyzed a remarkable increase in sales and market demand.
With nearly 40% of Americans classified as obese, the potential for widespread prescriptions of GLP-1 drugs in the coming years is immense. Hatzius anticipates that this trend could herald considerable economic benefits, notably through enhanced labor productivity across various sectors.
“The primary reason we foresee substantial advantages arising from healthcare innovation is that poor health incurs considerable economic costs,” Hatzius explained. “There are numerous ways in which health-related detriments impact overall economic activity, but these could lessen substantially if health outcomes see improvement.”
The U.S.’s ongoing struggle with elevated obesity rates enhances the prospects of these drugs, which could not only elevate health outcomes but also bolster labor force participation. Such enhancements in public health could yield tangible economic benefits.
The increasing sales of GLP-1 drugs signal a burgeoning market, further indicating potential for overall economic expansion in the years to come.
As competition intensifies in the quest for the ‘miracle’ obesity drug, Ozempic’s manufacturer, Novo Nordisk, is actively exploring the development of a new hybrid medication capable of facilitating weight loss of up to 25%.
This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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– What are the potential long-term economic benefits of widespread GLP-1 medication use in the U.S.?
**Interview with Jan Hatzius, Chief Economist at Goldman Sachs**
**Interviewer:** Thank you for joining us today, Jan. Your recent analysis has garnered a lot of attention. Can you explain how the use of GLP-1 weight-loss medications could impact the U.S. economy?
**Jan Hatzius:** Absolutely, and thank you for having me. The core of our analysis suggests that if approximately 60 million Americans utilize GLP-1 medications like Ozempic by 2028, we could see an increase of 1% in U.S. GDP. This isn’t just about weight loss—it’s about the broader implications for health and productivity.
**Interviewer:** That’s a significant projection! Could you elaborate on how these medications contribute to economic growth?
**Jan Hatzius:** Certainly. Health-related issues often lead to lost productivity, whether through illness, disability, or caregiving obligations. By effectively managing weight and associated health conditions, these medications could reduce the economic burden tied to such issues. In fact, our estimates indicate that the GDP could be over 10% higher if health challenges didn’t limit our labor supply.
**Interviewer:** That’s quite eye-opening. How do you envision the implementation of these medications affecting labor supply and economic productivity?
**Jan Hatzius:** If more individuals are healthier and able to work without the constraints of serious health issues, we could see a boost in labor participation and overall productivity. A healthier workforce translates to more hours worked and potentially higher output, which is beneficial for both businesses and the economy at large.
**Interviewer:** Are there any potential downsides or concerns that need to be considered with the widespread use of these medications?
**Jan Hatzius:** Any new treatment comes with its considerations, including cost, accessibility, and the need for continuous medical oversight. It’s important that as these medications become more popular, we ensure they are accessible and safe for the population. Additionally, we should remain vigilant about promoting overall health and wellness beyond just medication.
**Interviewer:** what would you say to skeptics who might be wary of linking public health and economic growth?
**Jan Hatzius:** I would encourage a closer look at the data. Health and economic productivity are deeply interconnected. Investing in our health infrastructure and supporting advancements in medication can have profound implications for national growth. It’s all about creating a robust environment where people can thrive—both physically and economically.
**Interviewer:** Thank you, Jan, for your insights on this fascinating intersection of healthcare and economics.
**Jan Hatzius:** Thank you for having me!