GLP-1 Second-Order Effects

The first-order effects of GLP-1 drugs are obvious: people lose weight, Novo Nordisk and Eli Lilly print money. But what happens when 10-15% of the adult population is on weight-loss medication within a decade? The downstream consequences are less discussed and almost certainly not priced into anything.

In 2018, United Airlines switched to lighter paper for its inflight magazine. One ounce per copy. Across 4,500 daily flights, that saved 170,000 gallons of fuel a year [1]. Airlines think about weight at this level of granularity because fuel is their single largest variable cost.

Average weight loss on semaglutide is around 35 pounds per person. If 12% of passengers on a typical 737 have been on the drug, that's roughly 750 fewer pounds per flight, the equivalent of shaving the weight off 12,000 magazines. United spent months optimizing paper stock to save $290,000 a year in fuel. GLP-1 adoption across the flying population could quietly save them an order of magnitude more, and ticket prices don't adjust down when passengers get lighter.

The food supply chain is more obvious but larger in scale. If a big share of the population eats 20-30% less, demand for calories drops. Not a shift in preferences toward salads. A pharmacological reduction in how much people eat, period. The food industry has dealt with changing tastes before. It has never faced a demand shock from the medical system.

Health insurance has a subtler problem. The pitch for GLP-1 coverage is that the drugs prevent expensive conditions downstream: diabetes, heart disease, joint replacements. Probably true. But in America's fragmented insurance market, the company paying for the drug today probably isn't the one insuring that patient in five or ten years. The savings land on someone else's balance sheet. That mismatch could slow adoption by years on its own.

Obesity correlates with lower workforce participation and higher absenteeism. If GLP-1s meaningfully reduce obesity rates, aggregate labor supply goes up. More people working, fewer health-related absences. That's a macroeconomic stimulus, except nobody frames it that way because it comes from a pharmaceutical company rather than from Congress.

Early data suggests GLP-1s reduce cravings for alcohol, nicotine, and gambling too. Phase 2 trials for opioid use disorder are underway. A weight-loss drug that accidentally dents Diageo's revenue and casino foot traffic was not in anybody's original investment thesis for Ozempic.

The effect I find hardest to think about is the psychological one. Weight has been tangled up with shame, identity, and social hierarchy for centuries. What happens to body positivity, the social dynamics of attractiveness, the entire cultural machinery around diet and discipline when weight becomes something you manage with a prescription? I don't have a good framework for it. Nothing comparable has happened before.

The market is treating this as a pharma story. The drug companies will capture a fraction of the total value created and destroyed. The rest redistributes across food, airlines, insurance, labor markets, and social behavior. Nobody's model probably covers all of that at once.

[1] https://www.cbsnews.com/news/united-hemispheres-magazine-print-edition/

EDIT: Formatting