The Ozempic Shockwave: How Is One Drug Impacting Global Food and Insurance Systems?

The worldwide rise of semaglutide—a marketed formulation under different names, most notably Ozempic—is occurring rapidly and in various ways. Since its initial approval for type 2 diabetes, Semaglutide has quickly adapted to drive changes in personal health behaviours, market dynamics, and healthcare policy priorities. The drug operates through a complex mechanism that alters the body’s appetite and metabolism, leading to the transformation. As a result, there is a widening divergence between its regulatory objective and a growing use as a weight loss tool.

The disconnect is not just clinical but a systemic coming together of prevalent cultural norms, insurance structures, pharmaceutical supply chains and global consumer trends. The increasing use of Semaglutide across different social classes and countries gives rise to important political economy challenges regarding the price of the therapy, access to it and the sustainability of national health systems.

This analysis examines semaglutide’s disruptive evolution from a drug invention to a global public health tool. The analysis focuses on the situation in the United States (U.S.), but it also examines future possibilities where affordability and scale could make the drug essential in combating obesity and metabolic disease.

The economics and social dynamics surrounding this medicine cannot be understood apart from the pharmacological architecture that facilitated its repositioning into a platform drug. Being a GLP-1 receptor agonist, semaglutide works on multiple systems, including the pancreatic, neural, gastrointestinal, and hepatic systems, to regulate glucose and appetite. Due to this multi-system interaction, the therapeutic uses have gone well beyond the initial indication. Although the original  U.S. Food and Drug Administration (FDA) approvals were limited to type 2 diabetes and cardiovascular risk mitigation in patients with high-risk diabetes, this is still relevant.

Novo Nordisk’s branding strategy institutionalised this functional diversity through product segmentation. For instance, Ozempic was made into a once-weekly injection for glycemic control. Secondly, Wegovy is used in higher doses to manage obesity. Thirdly, Rybelsus as the first oral GLP-1 agonist for diabetes. Nonetheless, inconsistency in insurance coverage within the U.S. has blurred these regulatory boundaries. Ozempic is seeing off-label prescription for weight management as the medication is reimbursed widely for diabetes (as was the case for the congestive heart failure medication, Entresto). The pathway to prescription of Wegovy is stricter than that of Ozempic. The gap between pricing and access has fuelled a surge in demand that is disconnected from the drug’s original intended use.

Clinical trial data prove the drug’s disruptive effect. In a randomised trial involving non-diabetic adult participants over 68 weeks, those receiving 2.4 mg of Semaglutide weekly lost 14.9% of their body weight, compared to 2.4% in the placebo group. Individuals with diabetes showed sustained reductions of HbA1c and declines in cardiovascular events and mortality in the SUSTAIN program.

However, some trade-offs come with this efficacy profile. More than 15% of patients had gastrointestinal side effects, mainly nausea.  The FDA announced a boxed warning for patients at high risk for pancreatitis, gallbladder disease, renal failure, and association with thyroid c-cell tumours, which are serious but rare events.. Besides, stopping studies indicate a quick weight regain in 12 months, demonstrating that the drug is not a healing intervention but a tool for long-term management within larger structural dependencies.

The rapid adoption of GLP-1 receptor agonists, especially Semaglutide, is creating a unique blend of medicine and economics. A diabetes treatment that emerged a few years ago has evolved into a multi-trillion-dollar industry encompassing food systems, insurance, retail, and farm policy. Like a 10% uptake of GLP-1 drugs amongst overweight adults and a 20% uptake amongst obese individuals in the U.S., consumption patterns would shift, leading to a 20 billion kilocalorie a day reduction in aggregate caloric demand, affecting a $1.2 billion drop in weekly food and beverage spending.

These projections have already begun materialising. According to Walmart’s top executive, 2023 data showed grocery sales were down for shoppers using Ozempic or Wegovy. Meanwhile, volume sales of snacks, desserts, and soda – high in sugar and fat, are suffering the most significant drop. More and more consumers want protein-rich, low-carb, nutrient-dense, or otherwise fortified food and drink products.  EY-Parthenon estimates that the U.S. snack food industry will shed $12 billion by 2027 because of this trend alone, assuming it persists.

The food industry has responded remarkably quickly. Nestlé rolled out a drink line designed to kill hunger, while Conagra started labelling Healthy Choice meals as “GLP-1 Friendly.” Chains such as Smoothie King have launched menus to support GLP-1. The U.S. Department of Agriculture (USDA) Agricultural Outlook Forum 2024 initiated discussions on potential shifts in American agriculture, from calorie-yield optimisation to nutrient-density optimisation.

GLP-1 drugs have become the focus of structural tension in healthcare financing, balancing short-term budgetary pressure with long-term cost avoidance. Evidence from clinical trials suggests that these drugs reduce the risk of developing expensive chronic diseases in the future. For example, cardiovascular events and renal failure will affect fewer people. Nevertheless, their list prices are hefty. Without insurance, the drugs cost between $936 and $1,349 a month.

According to Medicare, between 2018 and 2022, spending on three GLP-1 drugs (Ozempic, Rybelsus, and Mounjaro) increased from $57 million to more than $5.7 billion. This is a jump of over 9,800%. In 2022, Ozempic was credited with $4.6 billion in costs, making it the sixth-most costly drug under Medicare Part D.

The boom has brought critical access gaps in insurance. Most commercial insurance plans will cover Ozempic to treat diabetes. Nevertheless, Wegovy — which is FDA-approved for weight management — is often not covered. Federal law prohibits Medicare from covering weight-loss drugs altogether, leaving millions of patients without clinical coverage. Consequently, several people use off-label prescriptions or turn to the grey and black markets.

There are considerable differences in prices across countries. A one-month supply of Ozempic costs approximately $936 in the U.S., compared to $93 in the UK, $83 in France, $147 in Canada, and $169 in Japan. In that case, Americans will be paying 10 times more than the average worldwide. This highlights the absence of a central drug price negotiation mechanism in the U.S. healthcare system, in contrast to pricing arrangements in Europe and other high-income countries. For this reason, America pays far more than its fair share of global innovation costs on pharmaceuticals. This puts excessive strain on public insurance systems and raises fundamental questions of price fairness, budgetary sustainability and allocative efficiency in the U.S. chronic disease model. The price difference is evident in the following figure.

This part will model a scenario in which the monthly price of this drug drops to $20, building on the previous analysis of Semaglutide’s macroeconomic impact at currently high price levels. If drugs are offered at this price, then it may cause a structural inflexion in the global health political economy. This would transform them from a premium therapeutic to a mass public health intervention in low- and middle-income countries. More than 890 million adults live with obesity among 2.5 billion adults who are overweight worldwide, as per the latest data from the WHO. Furthermore, the worldwide diabetes population exceeded 590 million in 2024. Moreover, this number is expected to reach 853 million by 2050, about 90% of which is type 2 diabetes due to obesity.

If Semaglutide were available for $20, it could go from being a fad to being a have-to-have drug. According to a report by Swiss Re, the widespread use of GLP-1 may reduce the overall mortality rate in the U.S. by 6.4% and in the UK by 5.1% if it is continued and behavioural changes are implemented. According to Goldman Sachs, the world economy is expected to rise by 0.6% by 2040, driven by an increase in labour supply, productivity gains, and a reduction in chronic disease spending.

Achieving this goal would require extensive biologics production, cold storage systems, and an aligned healthcare system. This is rarely found in the Global South. The rise of obesity drugs like Semaglutide may disrupt the traditional farming of calorie-dense foods. Further, it will increase demand for protein and fibre-rich grains. Consequently, this will impact land use, trade patterns and agricultural prices.

Semaglutide is not just a drug. This will entail a significant shift in the relationship between drug development, health equity, and economic stability. In today’s high-price regime, structural inequities in access are enhanced, unregulated parallel markets are driven, and unsustainable burdens are imposed on insurance systems. In a different light, Semaglutide becomes a scalable public health tool that could reduce deaths, increase productivity, and alter the global food supply in a low-cost, universal-access scenario.

Responding to this shift requires coordinated and anticipatory action. Food companies should shift to nutrient-based demand, insurers should adopt long-horizon health-return financing models, and governments should implement pricing and coverage frameworks that enhance regulatory oversight and delivery infrastructure. Manufacturers of medicines need to increase production and adopt a price-equity approach. The future of Semaglutide and its system impacts depends on the global system’s capability to expand access sustainably, potentially reconfiguring structural dynamics of the global political economy.

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