Sam Hawley: Every once in a while, a product comes along that takes us by storm, changing our spending and changing our economy in the process. Things like the iPhone, Netflix, and Chat GPT come to mind. But less obvious are things like Ozempic, a drug that is currently helping millions of people around the world lose weight. Today, ABC Business Editor Ian Verender talks about how he’s disrupting the business models of fast food giants and health companies. I’m Sam Hawley from Gadigal Land in Sydney. This is ABC News Daily. Ian, I know you’re an economist and not a doctor, but let me elaborate on Ozempic. And you pointed out that not since the advent of Viagra has there been such a major accident in the medical world.
Ian Verender: Yes, that’s right. That’s really unusual. Most people probably don’t even understand why Viagra was invented. But I certainly think it’s had an impact elsewhere in the medical world as well.
Sam Hawley: After all, the original purpose was to treat high blood pressure, right?
Ian Verender: Yes, that’s right.
Sam Hawley: And it was used for unintended purposes.
Ian Verender: That is correct. However, Ozempic is actually having a major unintended impact on global health. The company behind it is Novo He is a very interesting company called Nordisk and it’s a Danish company. And the founder, a century before him, his wife had type 2 diabetes. And she was also a scientist. And she worked with him and worked very closely with him. And they worked tirelessly to come up with some way to alleviate the symptoms, if not a cure. And as a result, they were basically the first company to come up with insulin. Therefore, it has been a pioneer in this field for a very long time. So this is the latest version of their type 2 diabetes drug. But it turns out that it has all other effects, especially appetite, and it affects people’s weight. And I think that’s why we’ve become an incredible success story from a sales standpoint, and we’ve grown to be the number one company in Europe today. Its value reaches approximately US$5 trillion and accounts for almost all of Denmark’s economic growth to date.
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Sam Hawley: Ozempic was developed to treat type 2 diabetes, but it turns out that it can actually help you lose weight. It comes at a very important time, right? Because obesity is a big problem in the world right now.
Ian Verender: It’s not the world’s worst killer. The effects of smoking and war are still there, but they are quickly catching up. It has now spread all over the world and is becoming a kind of epidemic.
Sam Hawley: It’s obvious why Ozempic is so popular. I think it’s because Ozempic suppresses your appetite, helps you lose weight, and probably helps you lose weight fairly quickly. So, like you said, it really took off. But that’s not the case. I think it’s important to note right now that it doesn’t work for everyone, and it doesn’t work for everyone.
Ian Verender: No, it’s not. So I think the development of this type of drug is still in its early stages. But no, I think it affects the stomach for some people.
advertisement: Common side effects are nausea, vomiting, diarrhea, abdominal pain, and constipation.
Ian Verender: And when you stop doing it, like with many diets, you quickly regain your original weight. So it’s not a silver bullet in many ways, but it also has its drawbacks. There is absolutely no doubt about that.
Sam Hawley: However, millions of people around the world rely on this drug to lose weight. And, as you said, for the Danish company that invented it, and for Denmark itself, that means a huge amount of money. Not only that, but there are other economic implications as well, right? Change is happening.
Ian Verender: Yes, absolutely. There are two industries that have grown up around our new lifestyle. One is the fast food industry. I guess they’ve spent decades coming up with combinations and addictive combinations of fat, sugar, and salt to get people to eat more of their products. And it is the main cause of obesity problem. But on the other hand, there is also a pharmaceutical industry that has grown up trying to combat the effects of high blood pressure, heart disease, and all sorts of health problems associated with being overweight with drugs. obesity. And both of these industries now suddenly find themselves under threat. This has become a real phenomenon over the past six months, especially on Wall Street, where companies like Weight Watchers are now forced to offer Ozempic as part of their weight loss programs. On the fast food side, we have companies like Krispy Kreme that are seriously responding to the shift to highly processed foods. They too are under pressure. However, the consumption is not that large. And I think a lot of investors are sitting back and thinking, if this really takes off and actually changes spending patterns and behavior patterns, it’s going to have a big impact on these companies. Let’s go now. As a result of this, we have seen many companies whose stock prices have fallen significantly.
Sam Hawley: Well, now that’s clear. There is a machine out there that makes a lot of money like this, and it has two parts to it. Part of it is fast food and getting people to eat fast food and things like that. And the other thing is trying to correct people who eat too much fast food and end up getting obese or feeling unwell because they’re not eating healthy food. Therefore, they work together. And from what you’re saying, companies that release drugs like Ozempic are interfering with that business model.
Ian Verender: They certainly are, because I think it’s changing a whole range of health problems. For example, if you have high blood pressure, your blood pressure problems may go away if you lose a lot of weight. Therefore, all pharmaceutical companies producing blood pressure tablets will be under pressure. That’s just one example. There are some big companies in Australia. One is CSL. It was formerly the Commonwealth Serum Institute, a government-owned entity. The company mainly relies on its core business of plasma, plasma production. However, research is expanding to include kidney and cardiovascular diseases to develop drugs to address these issues. Now, one of the tests that Ozempic conducted himself was to check for kidney disease. Well, they began the trial. They had to abandon it at an early stage because it was clear that it would have a huge beneficial impact. Another Australian company, ResMed, is now actually based in the US, but it got its start here. We address sleep apnea and develop devices to address sleep apnea. But again, sleep apnea is one problem that is exacerbated by obesity. As a result, the company’s stock price has completely fallen over the past year or so. Like I said, it seemed a little perverse to have two industries fighting each other. One side is working hard to make sure people gain weight, and the other side is trying to solve health problems. This is the result. And now you’ve got this drug that unexpectedly, unintentionally walks into the middle of all of this and could potentially solve all of these problems.
Sam Hawley: And even bigger than that, inserting something like Ozempic in the middle, as you said, has the potential to impact the entire global economy. That’s amazing.
Ian Verender: Well, you can tell by the number of days people have lost to illness and all sorts of health problems. Some formulation that eliminates many of these health problems could make more people more productive. And it will have a huge impact on the world economy. When this first went viral, I think it was about a year ago, a friend of mine who has type 2 diabetes and is a very healthy man, probably in his late 40s or early 50s, talked about this. That’s when I heard it. And he suddenly became, I mean, never overweight, but a very tall, muscular type of guy. And I saw that he had lost a lot of weight. So I was on the beach and I said, “Oh, are you on a diet or something?” And he said, “No, I was diagnosed with type 2 diabetes and put on this medication, but I’m just losing weight little by little.” I think people who were trying to lose weight through all kinds of diets and fad diets saw that and decided to go for it all at once. And this drug was in extremely short supply. And I think a lot of doctors were very wary of the idea that people would jump on this just to lose weight. Many of those doctors, one doctor I spoke to recently, were very skeptical about all of this in the early stages, but now they know that, number one, the side effects are not that many and they’re not unpleasant. said. Side effects. And if it can solve so many other health problems, he’s now recommending it the other way around, to people who aren’t diabetic but could become diabetic if they keep carrying the same weight. .
Sam Hawley: Hmm. And Ian, your point is that if a society needs less food per person and spends less money on people’s health care, that actually increases productivity.
Ian Verender: Yes, absolutely. And those are the days lost to work. You know, this is the amount of money that goes into the health system, and the health system in this country, for example, is largely publicly funded. That means your tax dollars are being spent on things that you may not need in the future. So we’re talking about something that’s in very early stages. So I don’t really want to talk about silver bullets or anything like that, but it could very significantly change the way we live and, you know, the way we act.
Sam Hawley: oh. Understood. Obviously, I don’t want to rush ahead, but Ian, how long do you think it will take for Ozempic to completely change productivity in the world?
Ian Verender: Oh, look, I don’t get it. I think it’s probably a pretty long period. Because when a person who is sedentary, doesn’t exercise much, and perhaps eats the wrong kinds of foods loses weight, it becomes more attractive to that person. It’s easier to get outside and be more physically active. This may change your lifestyle. But ultimately I think you really need to think about doing it yourself instead of relying on drugs to do it all. But if it becomes more likely, we might all be more motivated to become healthier as a result.
Sam Hawley: But fast food restaurants may be feeling a little panicky right now.
Ian Verender: I think so too, because yes, this suppresses the desire to eat that kind of food.
Sam Hawley: Ian Verender is ABC’s business editor. This episode was produced by Bridget Fitzgerald and Nell Whitehead. Audio production by Anna John and Sam Dunn. The supervising producer is David Cody. I’m Sam Hawley. ABC News Daily will be back tomorrow. To contact the team, email ABC News Daily at abc.net.au. Thank you for listening. See you next time.
