Ozempic's meteoric rise has reshaped the landscape of healthcare, retail, and consumer behavior. Its initial popularity as a weight loss medication has sparked a broader conversation around health, wellness, and body image. This surge is creating a ripple effect, impacting various industries and prompting companies to adapt to changing consumer preferences.
Introduction: A Transformative Journey
Ozempic was originally developed to manage type 2 diabetes. However, it has recently gained significant attention for its effectiveness in weight loss. This shift has transformed Ozempic from a "generic term" for similar GLP-11 drugs into a major force impacting not only healthcare but also consumer behavior and market dynamics. In this article, we will explore the factors driving this surge, examine the effects on consumers, and discuss how we believe Ozempic is reshaping various retail and consumer goods sectors. We will also consider what these changes mean for the future.
Marketing's Out-Sized Impact: From Body Positivity to Celebrity Endorsements
In the 2010s, movements such as body positivity, health and wellness, and size inclusivity gained momentum, causing demand for diet programs and weight loss products to stagnate. In 2018, Weight Watchers rebranded itself as WW International, Inc., to emphasize its new identity as a global wellness company.
That same year, Novo Nordisk, the manufacturer of Ozempic, launched a traditional pharmaceutical commercial featuring a catchy cover of the Pilot song "Magic." The commercial gained some traction, but it was not until 2022 that the true impact became evident. Celebrities like Kim Kardashian, Oprah, and Elon Musk began sharing their experiences with Ozempic on social media, signaling the start of a major trend.
Social Media Buzz and Supply Shortages
The social media buzz led to consumer demand that quickly outpaced supply, causing shortages for those who needed diabetes treatment and sparking a secondary reaction. When drugs are officially in shortage, the FDA allows pharmacies to create their own "compounded" versions. This opened the floodgates for telehealth companies such as Him & Hers, ReflexMD, Henry Meds, Ro, and Get Thin MD, which offer a blend of online pharmacy and telemedicine services. These firms drive business through digital marketing campaigns that highlight health and lifestyle benefits, emphasizing ease of access as a key selling point. By 2023, there were more than 4,000 active ad campaigns in the U.S. mentioning Semaglutide2, the active ingredient in Ozempic.
Weight Watchers and Beyond: A New Era of Wellness
In a twist of fate, in March 2023, WW International Inc. acquired the telehealth platform Sequence and rebranded it as "WeightWatchers Clinic Powered by Sequence." Weight Watchers then launched a series of high-profile influencer marketing campaigns, featuring former body positivity advocates. The spectacle, along with the backlash from body positivity advocates, further fueled media coverage and the “Ozempic craze.”3
Weight Watchers was not the only company to seize this opportunity. By 2024, Med Spas had tool kits providing step-by-step guides to Ozempic marketing. Even companies like Noom, originally focused on a behavioral health approach to weight loss, launched telemedicine divisions offering access to GLP-1 drugs through a four-month subscription model. The lines between healthcare and retail continue to blur, with traditional club retailer Costco partnering with Sesame, a healthcare marketplace, to offer outpatient healthcare services and access to GLP-1 medications.
The reason companies are returning to the weight loss business is clear: about three-quarters of the country's adult population could benefit from weight management medications.4 This is before even considering their efficacy in treating diabetes, cardiovascular health issues, and substance use disorders.5 Companies also recognize the market potential for these drugs for aesthetic purposes, akin to a “Botox for the body.”
Cost and Accessibility: Navigating Financial Barriers
According to a report by the American Enterprise Institute6, revenues from Ozempic and other GLP-1 medications are expected to reach $100 billion annually over the next decade. As Ozempic's popularity continues to rise, consumers are seeking ways to cover its cost—potentially under the guise of heart attack and stroke prevention—since insurance coverage is often limited.
Insurance Coverage and Out-of-Pocket Expenses
Limited insurance coverage for Ozempic is primarily due to its FDA-approved use for managing type 2 diabetes, rather than for weight loss. When prescribed off-label for weight loss, insurance companies may categorize these prescriptions as lifestyle or vanity-related and may not cover the cost. This classification, combined with off-label use, can significantly increase a patient's out-of-pocket expenses.
Price Variability and Consumer Strategies
The cost of Ozempic can vary widely and is influenced by several factors. The list price for Ozempic is approximately $968 per injection pen without insurance, but retail prices typically range from $1,000 to $1,200 or more, depending on the pharmacy.7
Some individuals may find that their insurance covers the cost, allowing them to pay as little as $25. However, most will face higher costs unless the drug is part of a medically prescribed treatment for diabetes.
The variety of pharmacy options, both physical and online, provides some opportunities for individuals to find lower prices if they must pay out-of-pocket.
These factors collectively contribute to the wide range of costs for Ozempic and other GLP-1 medications, making pricing a critical component in determining insurance coverage, access, and affordability.
Effects on Key Business Segments: Adapting to New Realities
While empirical data on the retail impacts of Ozempic and other GLP-1 drugs is limited, their influence on the business landscape is undeniable. Companies that do not adapt quickly may find themselves scrambling to deal with the consequences.
Grocery Retailers and Food & Beverage: Shifting Consumption Patterns
Ozempic and similar drugs are known to suppress appetite, leading to reduced food consumption. This trend could result in decreased sales of snacks, sugary drinks, and other high-calorie foods. Retailers that rely heavily on these product categories, such as convenience stores and supermarkets, may experience declines in sales.
Steve Cahillane, CEO of Kellanova—a spinoff of Kellogg that produces snack foods like Pringles and Cheez-It—mentioned that his company is closely monitoring these trends.8
Walmart’s internal data has revealed a significant impact of Ozempic on food sales. Patients prescribed this GLP-1 drug were found to purchase less food, particularly sweets and snacks.9 This aligns with broader trends observed by Morgan Stanley,10 which predicts a 4% decline in the consumption of soft drinks, alcohol, and salty snacks over the next decade due to increased GLP-1 medication use in the U.S.
As consumers focus more on weight management and become increasingly health-conscious, retailers are already noting shifts in demand from processed foods to healthier options. Retailers will need to monitor and adjust their product assortments accordingly.
Apparel and Fashion: Resizing the Market
The plus-size apparel market is substantial and growing. In 2023, global revenues reached $288 billion.11 In the U.S., the plus-size apparel store segment had sales of $12.7 billion and was projected to grow by 1.3% over the next five years.12 Enter GLP-1 medications and the allure of quick weight loss! With the impact of GLP-1 medications on weight loss, could we see reduced demand for plus-size clothing and a corresponding increase in demand for other apparel as consumers resize and update their wardrobes?
As plus-size customers adopt these medications, retailers have already observed a shift toward standard-size clothing. A recent Wall Street Journal article noted, “a move by shoppers to more body-hugging shapes and risqué designs…industry executives said that they can’t be certain weight-loss medicine is the cause, but added that the shift is unlike anything they have seen.”13
A Morning Consult study indicates that about 33% of weight loss drug users reported buying new clothing more often compared to the period before they started taking the medication.14
Fashion retailers will need to monitor these trends and be ready to adapt to changes in consumer sizing preferences. Demand for smaller sizes could impact inventory and production strategies, as well as alter supply chain management as retailers react to new market dynamics.
Fitness and Wellness: Balancing Quick Fixes and Long-Term Health
The impact on fitness, should these drugs continue to surge in popularity and usage, could be mixed. Anecdotally, U.S. consumers have shown a tendency to seek "quick fixes" when it comes to fitness. For some, the weight loss resulting from the use of GLP-1 drugs may satisfy their personal fitness goals, leading to negligible changes in physical exercise and a healthier lifestyle.
On the other hand, some individuals might combine these drugs with a healthier lifestyle focused on personal fitness, driving demand for wellness and fitness products and services that support overall health rather than just weight loss. So far, the latter has been emerging as the dominant trend.
A Morgan Stanley survey conducted in October 2023 found that users of weight loss medication increased their fitness activity by 200%.15 Some market analysts believe GLP-1 drugs may lead to increased gym usage and encourage consumers to adopt a healthier lifestyle not solely dependent on medications.16
As people experience weight loss from the drug and turn to fitness routines to maintain their results, gyms could benefit from increased memberships and demand for personal trainers and fitness-related products. Some fitness professionals have already adapted their programs to cater specifically to clients using Ozempic, providing guidance on exercise and nutrition to maximize its benefits.17
Health and Beauty: Addressing Rapid Change
Rapid weight loss can lead to changes in skin elasticity and appearance, possibly driving demand for skincare products targeting stretch marks or loose skin, often referred to as "Ozempic face." The rising popularity of weight loss medication has led to increased demand for skincare products that address skin issues associated with rapid weight loss, such as sagging or dryness.
More significantly, consumers may seek solutions to these body changes through plastic surgery. In a recent article in Glossy,18 Dr. Saami Khalifian, a double board-certified dermatologist and Mohs micrographic surgeon at Som Aesthetics noted changes in his patients using weight loss medications. These physical impacts include "hollowing in areas such as the anterior face, under-eye area, and jowls, along with increased laxity in the neck, arms, and abdomen."
Treating such physical changes will require medical-grade treatments—far more than typical skin tighteners or fillers. In many cases, this may drive consumers to seek aesthetic options like laser treatments or plastic surgery.
Conclusion: The Long-Term Impact of Ozempic
Ozempic's meteoric rise has reshaped the landscape of healthcare, retail, and consumer behavior. Its initial popularity as a weight loss medication has sparked a broader conversation around health, wellness, and body image. This surge is creating a ripple effect, impacting various industries and prompting companies to adapt to changing consumer preferences.
As the use of Ozempic and similar drugs continues to evolve, it is essential for businesses, healthcare providers, and consumers to stay informed and adapt to the shifting landscape. The long-term implications of this trend remain to be seen, but its impact on society and the economy is undeniable.
1. Mayoclinic.org, class of type 2 diabetes drugs that not only improves blood sugar control but may also lead to weight loss
2. June 15, 2023, NBC News
3. Washington Post, February 14, 2024
4. WIRED, It’s Shockingly Easy to Buy Off-Brand Ozempic Online, Even if You Don’t Need It, July 12, 2024
5. Wired.com, Weight Loss Drugs Ozempic and Wegovy Can Also Protect the Heart, September 5, 2023
6. AEI, Weight-Loss Drugs Seem Like Another Bit of Sci-Fi Becoming Fact, September 8, 2023
7. GoodRx.com, https://www.goodrx.com/ozempic/is-ozempic-covered-by-insurance, July 9, 2024
8. ibid
9. Tilley Distribution, How Ozempic Affects Food Sales, September 10, 2024
10. ibid
11. Statista; Statista Consumer Market Insights
12. IBISWorld, Plus-Size Women's Clothing Stores in the US, June 2023
13. Wall Street Journal, Ozempic Fuels Hunt for Smaller Clothes, June 16, 2024
14. CBSNews.com, Ozempic users are buying smaller clothing sizes, June 20, 2024
15. Forbes, Will Ozempic Craze Hit Fitness Stocks? Here’s What Analysts Predict, November 2023
16. ibid
17. ibid
18. Glossy.com, As Ozempic gains popularity, a skin-care category catering to GLP-1 users is inevitable, September 26, 2024
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