Obesity Drugs vs Long Game

The Lempert Report
May 23, 2023

Sally, you just wrote a great article for RDBA weekly on the obesity drugs and what's going on.  We are seeing a lot of activity from food companies that are trying to hopefully balance this situation where people are not spending a thousand bucks a month on an obesity drug and changing behavior. What's going on here? 

Sally: Well, Phil, as we've talked about the popularity of these weight loss drugs, Ozempic and Wegovy specifically, these are semaglutide which are typically used to, to treat type two diabetics. Wegovy being one that a 2021 was approved for chronic weight loss. But now, a lot of people have figured out that using this drug can help them drop pounds very quickly. And it's not surprising that people would want to want to get this prescription, especially when we have an obesity crisis that is affecting so many Americans right now. It does cost an average of $820 a month, and typically your insurance will not cover this. So that is an issue for it being inaccessible to the average American. So the conversation has come up, are these obesity drugs really fixing long-term problems while they can be potentially beneficial to people that are in urgent situations of obesity? 

Sally: Are we looking at the long-term solutions, which is creating better eating habits? I recently read an article by a great writer, Hank Cardello who writes for Forbes, and he proposed this idea that companies like PepsiCo are stealthily changing their ingredients. He calls it stealth health, which I think is a great way of describing it. What's happening is that they are making changes. They're lowering sugar, they're lowering fat, they're lowering sodium. Some food companies are even fortifying their foods and adding some nutrients that we really need to help with those products that we love to buy, but haven't been traditionally so good for us. But the thing is, is that they're not actually publicizing this to consumers, which their hope is that as they gradually lower these ingredients that we don't want, that their consumers that are loyal to their brand and their products won't really notice the differences and they'll be eating a little bit better gradually and conditioning their pallets in a positive way without feeling turned off by something labeled as low sugar or low sodium. 

Phil: Yeah, I think that the messaging is critical, and we're gonna talk a little later about sodium later, but again, we go back to the Campbell Soup example, when they declared that they were lowering sodium in their soups, everybody was in an uproar and didn't like it. So they had to put the sodium back in. So I think that what Pepsi's doing and what other companies are doing this stealth nutrition, if you would, I think is really smart. If we look at these weight loss drugs, it's projected that it's gonna grow to 13 billion a year by the end of this decade, which is unbelievable. And also, another good reason not to be doing this is besides the points that you make, but number one, when you stop taking these drugs, you put all the weight back on. And also one of the big proponents of this is Elon Musk. So for no other reason, don't do it because Elon Musk wants you to do it and he's doing it. So let's not do that.