⚕ Weight-loss drugs seem like another bit of sci-fi becoming fact
And it looks like their availability will only increase
Quote of the Issue
“Free markets are the most robust mechanism ever devised by humanity for delivering rapid feedback on how decisions turn out. Profits and losses discipline people to learn quickly from and fix their mistakes. Consequently, markets are superb at using trial and error to find solutions to problems.” - Ronald Bailey, The End of Doom: Environmental Renewal in the Twenty-first Century
Some self promotion: I have a book coming out on October 3. The Conservative Futurist: How To Create the Sci-Fi World We Were Promised is currently available for pre-order pretty much everywhere. I’m very excited about it! Let’s gooooo! 🆙↗⤴📈
The Essay
⚕ Weight-loss drugs seem like another bit of sci-fi becoming fact
If you need a newsy example of how innovation can drive economic growth, the good people of Denmark are providing a pretty clear example. In the first half of this year, Danish GDP rose at a 1.7 percent annualized rate thanks to the contribution of Novo Nordisk, the drug maker responsible for anti-obesity blockbusters Ozempic and Wegovy. Without soaring production and profits at Novo Nordisk, Danish GDP would have shrunk by 0.3 percent.
"We've never seen anything like it,” Jonas Petersen, an analyst at Statistics Denmark, told Euronews. “It changes the appearance of the economy.” And while it’s hardly a perfect comparison, sales of the anti-obesity drugs turned Novo Nordisk into Europe’s most valuable company with a market capitalization equal to that of the entire Danish economy.
That said, the American people have played a big role in Novo Nordisk’s good financial fortune and are expected to continue to do so with estimates of the US share of sales ranging from 70 percent to 90 percent over the decade.
Now let’s think in Faster, Please! terms about what Americans will be getting for their money besides more slender figures. As you may already know, the semaglutide drug helps people lose weight by affecting their appetite and blood sugar levels by a) mimicking a natural hormone called GLP-1, which is produced in the gut after eating, and b) stimulating the pancreas to produce more insulin, which lowers your blood sugar levels. This process is what makes semaglutide an effective treatment in helping people with type 2 diabetes, the risk for which is increased by being overweight or obese.
But weight has nothing to do with getting type 1 diabetes, which is believed to be caused by an autoimmune condition. And yet semaglutide might have a role to play here, as well, by allowing people newly diagnosed with Type 1 diabetes to dramatically cut back or even completely stop insulin injections. In a letter to the New England Journal of Medicine, researchers describe a study that tested a semaglutide anti-obesity drug on 10 patients who had recently been diagnosed with type 1 diabetes. The study found that semaglutide helped the patients reduce or stop their need for insulin injections, which are usually required for type 1 diabetes, while also improving their blood sugar control and increasing their levels of C-peptide, a marker of insulin production. And only minor side effects.
Yes, as the researchers note, randomized clinical trials with larger numbers of patients are the logical next step. But the early results are tantalizing. As the lead researcher told NBC News:
“I was absolutely shocked that we could get rid of fast-acting insulin in three months and then basal insulin in seven out of 10 patients,” the lead author, Dr. Paresh Dandona, said, referring to two types of insulin, one fast-acting and used to blunt blood sugar spikes after eating, and the other more long-acting, meant to keep blood sugar steady throughout the day. “It was almost like science fiction,” said Dandona, a professor of medicine at the University at Buffalo’s Jacobs School of Medicine and Biomedical Sciences in New York.
Let’s take a step back: According to the CDC, $1 out of every $4 in US healthcare costs is spent on caring for people with diabetes, with $237 billion spent each year on direct medical costs and another $90 billion on reduced productivity. The quantifiable benefits from any intervention that can make a big dent in those numbers are huge — and those benefits don’t come anywhere close to capturing improvements in quality of life. Just a really great example of tech progress improving living standards in a deep way.
These drugs are certainly passing the market test. In a new report, JPMorgan’s pharmaceutical team estimates GLP-1 drugs such as semaglutides are used in 10 to 12 percent of type 2 diabetes patients in the US, leaving room for expansion for both Novo Nordisk and Eli Lilly's tirzepatide, also known as Mounjaro. The team sees usage expanding to roughly 35 percent by 2030 (with upside potential) and a $50 billion diabetes opportunity over time, split between Eli Lilly and Novo Nordisk.
In addition to outlining the potential market opportunity, JPM tries to answer a few other relevant questions. Among them: “Will insurers broadly cover GLP-1s for obesity?” JPM thinks studies showing that these medicines can lower the risk of heart problems, kidney problems, and other health issues in people who are very overweight and have other diseases “should advance payer decisions on broadly reimbursing obesity. … This will eventually include Medicare [as well as commercial players], where we see coverage by the end of the decade based on the expected strength of these datasets.” As with diabetes, JPM also sees the obesity market to be a $50 billion one by 2030 and largely a duopoly between Lilly and Novo.
And what about the new power given to Medicare by the Inflation Reduction Act to directly haggle over drug prices?
This is just one class of drugs. It’s my guess that plenty more wondrous treatments are on their way, especially given advances in mRNA vaccines and genetic editing. Science fiction becoming fact thanks to human ingenuity
Micro Reads
▶ 2 Senators Propose Bipartisan Framework for A.I. Laws - Cecelia Kang, NYT |
▶ We must shape the AI tools that will in turn shape us - Reid Hoffman, FT Opinion |
▶ The Secret to Nvidia’s AI Success - Samuel K. Moore, IEEE Spectrum |
▶ The AI Hype Has Subsided, But the Revolution Continues - Tyler Cowen, Bloomberg Opinion |
▶ NASA’s mega moon rocket is ‘unaffordable,’ according to accountability report - Jackie Wattles, CNN |
▶ The Evolution of Work from Home - Jose Maria Barrero, Nicholas Bloom, and Steven J. Davis, Becker Friedman Institute for Economic
▶ Microsoft pledges legal protection for AI-generated copyright breaches - Cristina Criddle, FT |
▶ Our climate change debates are out of date - Noah Smith, Noahpinion |
▶ Triple Threat to Texas Power Grid Will Keep It Vulnerable - Liam Denning, Bloomberg Opinion |
▶ Companies Look to Squeeze More Power Out of AI Chips - Belle Lin, WSJ |
▶ SpaceX broke its record for number of launches in a year - Stephen Clark, Ars Technica |
▶ Anti-Gentrifiers Gone Wild - Steven Malanga, City Journal |
▶ Scientists Just Tried Growing Human Kidneys in Pigs - Emily Mullin, Wired |
▶ ‘Edtech’ offers no escape from reality - John Thornhill, FT Opinion |
▶ The perpetual truck driver shortage is not real - Craig Fuller, FreightWaves |
1) Free markets are not robust mechanisms for delivering rapid feedback on decisions. they are fragile because they do not take into account all the externalities and are vulnerable to cheating (price fixing, stock buy backs, pump and dump, collusion to name a few).
Would oil be priced where it is if it took into account the pollution, oil spill cleanups, and carbon emissions? If the market handled those externalities, we'd probably see oil price 3 to 5 times higher than it is now and the risk of climate change and it's side effects would be priced into the product and not be as big an issue.
There are many other markets where externalities are not accounted for period for example processed foods have a significant negative impact on the public health period if processed food makers were required to pay for all the healthcare issues processed food generates and again price of processed foods would be much higher than they are now. If the price is built in properly, then the health issues caused by processed foods would go be greatly reduced.
Why will externalities never be priced into a product? Because it will cut into the profit and shareholder value of the company. People waving the free market flag also seem to have an expectation that they have every right to take as much money as they can from the consumer and make unlimited profit without any consideration for the rest of the world.
2) Despite what the drug companies and Tick Tock influences claim, GLP-1 RA have serious side effects. Constipation, never-ending nausea, gastritis. There is some evidence that these drugs have also broken the peristaltic action of some patient intestines which keeps them from ever being able to eat normally again.
Yes, I did lose weight for the couple of months I tried the drug but when I stopped, the weight came right back. I think the weight loss mechanism was because I literally could not eat and I was starving myself.
And worst of all, it did nothing for my blood sugar.
Since the profit margin in the U.S. is astronomical, it is not surprising that virtually the only market is the U.S. -- certainly a victory for “free markets” (were gov’t created/enforced monopolies rule).