Weight-loss drugs cost most users more than they save on food, analysis finds
Lower grocery bills are unlikely to offset the cost of GLP-1 weight-loss medication for most users, according to analysis examining how the drugs are changing household spending.
By The Guardian
People using weight-loss drugs are likely to spend more on the medication than they save through lower grocery bills unless they have exceptionally high levels of disposable income, according to new analysis.
Consultancy Baringa examined the financial effect of GLP-1 drugs, which can reduce appetite and change how much users spend on food.
Its analysis puts the annual cost of the medication at around £1,200 and compares that expense with the reduction in grocery spending associated with taking the drugs.
For most consumers in the model, the food savings do not come close to covering the cost of the medication.
A person with £39,000 remaining after tax and essential expenditure could save an estimated £481 a year on food, according to the analysis.
That would still leave the person spending more than £700 a year above their grocery savings once the £1,200 medication cost was taken into account.
Baringa estimates that the financial balance is not reached until someone has around £97,500 a year available after tax and other essential outgoings.
At that level of discretionary income, estimated annual grocery savings reach approximately £1,200, matching the assumed cost of the drugs.
The figure should not be confused with a £97,500 annual salary.
It represents money remaining after tax and essential spending under the assumptions used in Baringa’s analysis, meaning the gross household income required to reach that level could be considerably higher.
The calculations illustrate how the rapid adoption of GLP-1 drugs could have consequences beyond healthcare.
Food manufacturers, supermarkets, restaurants and other consumer businesses are increasingly considering how reduced appetites and changing eating habits could affect demand.
Users can spend less on groceries while taking the medication, but Baringa’s analysis suggests the cash saving becomes larger among people who had more discretionary spending available in the first place.
Paddy Winters, a partner at Baringa, argued that this could create another financial divide between consumers who can comfortably afford the medication and those for whom its cost represents a much larger proportion of their available income.
He described the effect as potentially becoming a “regressive tax on being thin”.
The analysis does not suggest that grocery savings are the primary reason people use GLP-1 medication.
The drugs are used for medical purposes, including the treatment of obesity and type 2 diabetes, and decisions about their use involve health considerations beyond their effect on household finances.
Instead, the calculations attempt to measure one of the wider economic consequences as increasing numbers of consumers use the medications.
The implications could become increasingly significant for the food and retail industries if GLP-1 use continues to grow.
For individual consumers paying privately, however, Baringa’s figures suggest that spending less at the supermarket should not generally be expected to offset the cost of the medication.