The overall cost to the Australian economy of overweight and obesity is now close to $39 billion a year. This includes a whopping medical bill for providing additional health care to Australians who weigh too much – around $14 billion each year – with the balance made up by lost productivity due to ill health.
Health problems flowing from obesity affect the economy in multiple ways. As the OECD warns, “reductions in labour market participation and productivity due to overweight carry costs for the economy. In the case of absenteeism and presenteeism, wages are paid without a return in productivity. In the case of unemployment and early retirement, productive workers are lost from the workforce.”
People carrying too much weight also are more likely to be discriminated against – it can be more difficult for them to find jobs and to keep them. At a time of national skilled workforce shortage the economy needs every available worker at their post.
Could the revolutionary new class of injected weight loss drugs, starting with Ozempic and followed by a list of new market entrants, be the right treatment for this economic malaise? In Britain, Health Secretary Wes Streeting has proposed offering new weight-loss injections to unemployed people with weight problems in the hope of returning them to the workforce.
With close to 64 per cent of all adult Britons overweight or obese, the NHS is footing a bill of more than 11 billion pounds a year for treating obesity-related conditions. As in Australia, the broader cost to the British economy is much higher, with an analysis by the Tony Blair Institute for Global Change putting it at almost 100 billion pounds annually.
Exactly what is the UK government considering, and should we consider similar measures in Australia? Although details are yet to emerge, according to the British Medical Journal, the deal is a government partnership with pharmaceutical giant Eli Lilly to trial “innovative approaches to treating obesity as part of a rounded package of care”. This will include a five-year community-based study in Greater Manchester of a new weight loss drug – tirzepatide – closely related to Saxenda, which is familiar to Australians. Not only will the project look at health outcomes for participants, but also effects on employment status and sick days away from work. The trial, which has been flagged as a possible precursor to a national, population-wide rollout, is remarkable and has captured interest among health groups around the world.
A lot of detail is yet to emerge about the trial, but close to 300 million pounds will be spent on the project. There are obvious questions about the proposal. How will participants be selected? What ethical issues need to be resolved in offering treatment based on employment status rather than purely medical need? That the government is prepared to offer such a strong fiscal treatment, though, speaks to the importance of finding ways of dealing with the obesity crisis. Australia may want to take note.
The Australian Bureau of Statistics estimates about 66 per cent of adult Australians are overweight or obese, a proportion very similar to that of the UK. The Australian Institute of Health and Welfare reports that carrying too much weight – and disease associated with it, such as diabetes – contributes to more than 8 per cent of the total burden of disease in Australia. Should the Australian government look at the UK example and consider such a trial here?
Before we look at the economics of drugs such as Ozempic, it is important to understand exactly what these new drugs do, how they work, what the potential risks of using them are – and what they cost. There’s no doubt these new medications – technically known as GLP1-agonists – are a hot topic in the medical world. The prestigious journal Science named them the “breakthrough of the year” for 2023. So extraordinary has been the reputation of – and demand for – medications such as Ozempic that a worldwide shortage occurred driven by social media influencers. They were developed to treat diabetes but celebrity endorsements drove people to clear the shelves of the injections in search of fashionable leanness, causing a global crisis in diabetes treatment.
These drugs work by mimicking the natural chemicals produced in our body that make us feel full and not want to eat. Whereas the natural chemical messengers are broken down and become inactive within minutes, the synthetic compounds can take days to break down. They attach to areas in the brain that drive hunger and very effectively suppress our appetite for up to a week. This powerful but secondary effect of a medication designed to help treat people with diabetes rapidly became a worldwide sensation.
Scientific studies of these drugs show a powerful effect on weight, with many subjects losing 15kg or more over a year, and up to 10cm off their waistlines. The drugs don’t work for everyone, with perhaps 5 per cent of users not losing much weight, and for most people the weight piles back on once the medications are ceased. There are short-term side effects such as nausea and diarrhoea and potential long-term effects such as loss of muscle.
There are no free lunches however, and it is important to understand the costs of drug treatments. Although the daily injection Saxenda is approved in Australia for treatment of obesity, it is not subsidised by the PBS and costs $250 a dose. While newer medications are likely more effective for weight loss, Ozempic has a price advantage and has been shown to be the most cost-effective choice. In Australia Ozempic sells for roughly $150 for a single dose if purchased on a private prescription. It is only available with the PBS subsidy for people with diabetes who meet special criteria.
In Australia, the average yearly healthcare cost for a healthy adult is $1675. For a person with obesity this rises to $2066, and if they are affected by diabetes the cost increases to $2373, a total increase of over 40 per cent. If we add in direct non-healthcare costs, such as transport to medical appointments or costs of carers, for a healthy person the average yearly figure is an extra $782 while for a person with obesity the extra cost is $1180, or $1983 if diabetes occurs. Adding government subsidies such as disability support pensions lifts the cost by $1731 for a healthy adult compared with $2987 for a person affected by obesity and diabetes. In total, then, the combination of obesity and diabetes costs $3155 mo.re for every adult affected compared with a healthy adult.
If a UK-style trial were contemplated in Australia, how would the numbers stack up? The current unemployment rate is just over 4 per cent and at least 44 per cent of people who are unemployed are affected by obesity. With 620,000 adult Australians looking for work it is likely that well over a quarter of a million people might be eligible for such a trial.
Overweight and obesity are not only problems for the unemployed. With rates of these conditions rising we need to recognise that providing subsidised or free weight loss drugs is, at best, only part of the solution. For people who lose large amounts of weight, damage to their health is already done. While conditions such as diabetes can resolve with weight loss, many complications such as arthritis will likely linger. The health expenditure slate won’t immediately clear if vast numbers of Australians lose large amounts of weight. These considerations certainly have not impressed government analysts and for these reasons Australia’s PBS does not subsidise the drugs for weight loss alone.
The drugs are new and there is much to learn about the role of drugs such as Ozempic in treating obesity, and perhaps the balance will change over time. At the moment, though, we must pivot back to prevention. Australians and their health system will be much healthier if they don’t gain too much weight in the first place.
On this front the news is bad – the rates of excess weight in young Australians are worryingly high, with as many as one in four children and adolescents overweight or obese. This crisis in the health of Australian children has been recognised for years but, despite this, more and more young people are heavier than ever.
What has changed in our communities that has seen so many of us gain so much weight and lose so much of our health? The recent parliamentary inquiry into diabetes painted a dismal picture of the health of millions of Australians.
“There is a huge burden being placed on health resources by people with Type 2 diabetes and this is across virtually the entire health spectrum of disease,” it said.
“We have been presented with evidence that children as young as nine have been diagnosed with Type 2 diabetes and multigenerational diagnoses of Type 2 diabetes is occurring.” Trying to explain these terrible findings, the report found that “children are being exposed to the risks of obesity and Type 2 diabetes for many reasons, including a lack of access to a healthy diet, lack of exercise and poor availability of education about the risks of diabetes.”
Scientists and others are grappling with the reasons for such an extraordinary situation, where two out of every three adults are carrying too much weight. These are put down to what has been termed an “obesogenic environment”. According to the World Economic Forum, “the rise in obesity is due to a combination of economics and technology that has altered global food systems and consumption patterns. At the same time, there has been a drop in adult energy expenditure, possibly due to shifts in work and transport, which may have contributed to the rise in obesity”.
Australia, like most of the world, is in the grip of an obesity epidemic. And we face a cost-of-living crisis making healthy food choices out of the reach of many of the people who need them most. We’re also buckling under a workforce crisis, so making sure our workforce is as healthy and productive as possible must be a priority. The economics of making weight loss drugs affordable and available are still to be analysed. For all of these reasons, the only thing that truly makes sense in the long term is prevention – starting with the next generation. That really is where we should devote as many of our resources as possible.
Professor Steve Robson is one of Australia’s most highly qualified surgical specialists, researchers and teachers. He works at the Australian National University Medical School.
This column is published for information purposes only. It is not intended to be used as medical advice and should not be relied on as a substitute for independent professional advice about your personal health or a medical condition from your doctor or other qualified health professional.
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