The Economics of GLP-1: Impact on Food & Pharma

GLP-1 drugs are no longer just medicines. They are economic forces. When 12.4% of U.S. adults are taking semaglutide or tirzepatide, the effects ripple far beyond clinic walls — into grocery stores, restaurants, food manufacturing, pharma revenue models, and healthcare budgets. This article tracks the money: who is losing it, who is making it, and what the data actually shows.

Table of Contents

The Scale of the Shift
How GLP-1 Users Spend Differently on Food
The Snacking Collapse
Restaurants Feel the Squeeze
Alcohol at a 90-Year Low
Where the Money Goes Instead
What Happens When People Stop
Food Industry Response
The Pharma Revenue Explosion
The Pricing Earthquake
Healthcare Cost Math
The Oral GLP-1 Market Opens
FAQ
The Bottom Line
References

The Scale of the Shift

The numbers on adoption are moving fast. The share of U.S. households with at least one GLP-1 user rose from about 11% in late 2023 to more than 16% by mid-2024. A Gallup survey found that the percentage of U.S. adults taking drugs like Ozempic, Wegovy, Mounjaro, and Zepbound more than doubled to 12.4%. And 19.5% of survey participants who have not tried a GLP-1 said they are considering starting one in the next year.

Meanwhile, the U.S. obesity rate fell from nearly 40% in 2022 to 37% in 2025. That three-percentage-point decline, if sustained, represents millions of people changing their metabolic trajectory — and their spending patterns.

A PwC analysis frames this as a transformation "on par with major technological breakthroughs," one that begins with biology and is now cascading across food, wellness, beauty, retail, and travel. That framing might be ambitious, but the spending data backs up the direction.

How GLP-1 Users Spend Differently on Food

A December 2025 study from Cornell University, published in collaboration with economists Jura Liaukonyte and Sylvia Hristakeva, tracked actual household purchase data — not surveys, not self-reported behavior. Their findings:

Households with at least one GLP-1 user reduced grocery spending by 5.3% within six months of starting the medication.
Higher-income households cut spending by 8.2%, suggesting the effect scales with discretionary purchasing power.
Across 100 product categories including groceries, quick-service restaurants, and tobacco, GLP-1 users reduced spending by 10% over a year, according to data company Numerator.

These are not trivial numbers. Extrapolated across 20-25 million current users (a figure Lilly CEO David Ricks cited in early 2026), a 5-10% grocery spending reduction translates to billions in lost revenue for the food industry.

One analysis estimated that if GLP-1 usage reaches 10% among overweight adults and 20% among obese adults, total U.S. caloric demand could drop by 3% — roughly 20 billion fewer calories consumed per day.

The Snacking Collapse

The category hit hardest is the one most tied to cravings. Ultra-processed, calorie-dense foods saw the steepest spending declines among GLP-1 users:

Savory snacks: down ~10%
Sweets and candy: comparable decline
Baked goods and cookies: similar drops
Bread, meat, eggs: also declined, though less sharply

Morgan Stanley forecast a 4% decline in soft drink, alcohol, and salty snack consumption over the next decade — a projection that is now looking conservative given the pace of GLP-1 adoption.

What went up? Yogurt led the gainers, followed by fresh fruit, nutrition bars, and meat snacks (jerky, protein-forward options). The pattern is consistent: users are not just eating less, they are shifting toward nutrient-dense, protein-forward foods.

For food manufacturers, this is a structural problem, not a blip. Companies heavily reliant on volume-based snack sales — the Frito-Lays, the Mondelez brands — face long-term demand risk. Package sizes, product formulations, and marketing strategies all need rethinking.

Restaurants Feel the Squeeze

The Cornell study found an 8.0% decline in spending at fast-food chains, coffee shops, and limited-service restaurants among GLP-1 households.

The mechanism is straightforward: people who are less hungry eat out less, order less when they do go out, and gravitate toward meals they can control nutritionally. Quick-service restaurants — built on large portions, high-calorie combos, and impulse purchases — are structurally exposed.

The anecdotes match the data. The owner of Dallas wine bar Trova Wine and Market cited Ozempic as one factor behind its January 2025 closure. While any single business closure has multiple causes, the broader spending data supports the claim that food service is feeling the effect.

The restaurant industry is responding. Smoothie King has added a "GLP-1 Support Menu." The hospitality industry has identified "indulgence with intention" as a defining theme for 2026 — smaller appetites driving portion-flexible menus and slower-paced dining experiences. Restaurants like Otto's in London now offer small-appetite menus, and new openings are building portion flexibility into their core concepts.

Alcohol at a 90-Year Low

A 2025 Gallup survey found that U.S. alcohol consumption fell to its lowest level since records began in 1939. GLP-1 drugs are being cited as a contributing factor, though they are one force among several (the broader "sober curious" movement, generational shifts in drinking habits).

The drinks industry is paying attention. "We're beginning to see signs that Ozempic and similar medications are reshaping drinking habits in the UK," said Tom Bell, founder of DrinkWell. Morgan Stanley's forecast of a 4% decline in alcohol consumption over the next decade puts the trend in financial terms.

The biological basis is real. GLP-1 receptors exist in brain reward circuits, and patients on these drugs commonly report reduced interest in alcohol alongside reduced appetite. This is not just about consuming fewer calories — it appears to be about a dampened reward response to substances that once produced pleasure.

Where the Money Goes Instead

The spending that disappears from food and alcohol does not vanish entirely. It migrates. Early data from 2025 shows:

Formal-wear sales surged 80% in the first six months of 2025 compared to the same period the prior year
Sporting goods jumped 24% in the same timeframe
Gym memberships and fitness spending are trending upward among GLP-1 users

This makes intuitive sense. People who lose 15-25% of their body weight need new clothes. They feel more capable of physical activity. They invest in health and appearance categories that were previously less relevant to them.

For retailers, this creates a redistribution of consumer spending: away from food volume and toward what analysts call "post-obesity lifestyle categories" — fashion, fitness, travel, and wellness.

What Happens When People Stop

About one-third of users in the Cornell study stopped taking their GLP-1 medication during the observation period. What happened next is instructive:

Their food spending reverted to pre-adoption levels. Their grocery baskets actually became slightly less healthy than before they started, driven by increased spending on categories like candy and chocolate. This "rebound effect" suggests the appetite suppression is medication-dependent, and that stopping the drug does not leave behind durable dietary habits for many users.

This finding has implications for every projection about GLP-1's long-term economic impact. If a significant percentage of users cycle on and off the medication, the sustained effect on food spending will be smaller than what cross-sectional data at any single point suggests.

Food Industry Response

Consumer packaged goods (CPG) companies that can adapt quickly have an advantage. The emerging playbook includes:

Reformulating existing products into 100-150 calorie portions
Emphasizing protein and fiber on packaging and marketing
Marketing satiety benefits — "fills you up" messaging rather than "low calorie"
Single-serve fortified meal formats targeting users who eat less frequently
Premium, quality-over-quantity positioning that aligns with reduced-volume consumption

Investors are starting to evaluate portfolio exposure to "appetite-sensitive" categories. Firms dependent on high-volume snack sales face higher long-term risk. Companies pivoting toward nutrient-dense, protein-forward products — or luxury dining experiences where the appeal is quality, not quantity — are positioned better.

The grocery category winners offer a roadmap. Greek yogurt, protein bars, fresh berries, and high-protein snacks like jerky and roasted chickpeas are all growing among GLP-1 households. Brands like Chobani, Kind, and RXBar are naturally aligned with the shift. Meanwhile, legacy snack brands face a choice: reformulate and reposition, or accept gradual volume erosion as adoption rates climb.

Some companies are already making moves. Nestle launched a line of micronutrient-fortified small meals explicitly marketed toward GLP-1 users. PepsiCo has expanded its protein snack portfolio. General Mills increased investment in its high-fiber and whole-grain product lines. The companies that treat this as a temporary fad rather than a structural shift are the ones most exposed.

The Broader Economic Ripple

The GLP-1 effect extends beyond food and pharma. Several adjacent industries are feeling the impact:

Insurance and employers: Employer cost per member per month for GLP-1s surged from $4.34 in 2022 to $27.23 in Q1 2025. Large self-insured employers are restructuring their pharmacy benefits to accommodate GLP-1 coverage while managing budget impact. Some companies, including JPMorgan Chase and Costco, began covering these drugs for weight loss specifically because they expect long-term savings on diabetes, cardiovascular, and orthopedic claims.

Agriculture: If U.S. caloric demand drops 3%, that translates to reduced demand for commodity crops — corn, soy, wheat, and sugar. The farmdoc daily analysis from the University of Illinois found that consumers expect GLP-1 drugs to negatively impact food system players, with the strongest expected impact on fast-food restaurants and processed food companies, and moderate expected impact on farmers and commodity markets.

Medical devices and procedures: Bariatric surgery volumes, which had been growing steadily, face a potential decline as pharmacological weight loss becomes more accessible and effective. Orthopedic joint replacement — heavily driven by obesity — may see reduced demand over the next decade. Conversely, body contouring and plastic surgery procedures are surging as patients who lose 50+ pounds seek to address excess skin.

Wellness and fitness: Gym memberships, personal training, athletic apparel, and fitness technology are all capturing redirected consumer spending. Peloton, which struggled post-pandemic, has cited GLP-1 users as a growing segment of its subscriber base.

The Pharma Revenue Explosion

The GLP-1 market has become the largest drug category in history. By the end of 2024, GLP-1 products had generated $71 billion in cumulative U.S. revenue. From 2025 to 2030, they are forecast to generate an additional $400 billion, reaching a staggering $470 billion in cumulative revenue by the end of the decade.

Eli Lilly: The Market Leader

Lilly posted 45% revenue growth in 2025 and guided 2026 revenue to $80-83 billion — beating Wall Street consensus of $77.6 billion. Leerink Partners projects Lilly could hit $94.3 billion in annual revenue by 2027, a 109% jump from 2024's $45 billion.

The specifics tell the story:

Zepbound (tirzepatide for obesity): $2.3 billion in Q1 2025, up 345% year-over-year
Mounjaro (tirzepatide for diabetes): $3.8 billion in Q1 2025, up 111% year-over-year
GLP-1 market share: 57% as of Q2 2025

Analysts from Truist Securities project that orforglipron combined with Mounjaro and Zepbound could one day reach $101 billion in peak annual sales — from a single company.

Novo Nordisk: Scale but Pressure

Novo Nordisk remains a GLP-1 giant by revenue but faces mounting headwinds:

Wegovy: $2.6 billion in Q1 2025 (up ~85% YoY, but down ~13% from Q4 2024)
Ozempic: nearly $5 billion in Q1 2025 (up 19% YoY, but down ~3% from Q4 2024)
The company cut its full-year forecast three times in 2025 as growth rates decelerated
The semaglutide franchise could reach roughly $36 billion in 2026, up from about $33 billion in 2025

The divergence between the two companies reflects Lilly's broader pipeline (retatrutide, orforglipron) versus Novo's reliance on the semaglutide platform. For a deeper look at this competitive dynamic, see our analysis of the Novo Nordisk vs. Eli Lilly GLP-1 market war.

Manufacturing as a Moat

Both companies are investing aggressively in production capacity:

Novo Nordisk: $10 billion in additional U.S. manufacturing investment
Eli Lilly: at least $27 billion in new U.S. manufacturing investments

These numbers reflect both demand projections and the geopolitical reality that domestic manufacturing is becoming a regulatory and political asset.

The Pricing Earthquake

The economics of GLP-1s changed dramatically in late 2025. President Trump announced agreements with both Eli Lilly and Novo Nordisk for historic price reductions:

Medicare prices for Ozempic, Wegovy, Mounjaro, and Zepbound: $245 per month
Beneficiary copay: $50 per month
Oral GLP-1 options (when approved): initial dose at $150 per month
This represents a 60-70% reduction from prior list prices

The deal enables Medicare to cover Wegovy and Zepbound for obesity patients for the first time. State Medicaid programs also get access at the $245 price point.

For pharma, the math is: lower price per unit, much higher volume. Lilly's guidance of $80-83 billion in 2026 revenue suggests the company is betting volume growth will more than offset per-unit price compression. Novo Nordisk's situation is more uncertain — Drug Discovery & Development estimates that despite a 70% price cut, semaglutide revenue could hold steady or grow in 2026 because of expanded access.

Medicare and Medicaid Coverage

CMS will roll out a Medicare GLP-1 payment demonstration in July 2026 as a short-term bridge. State Medicaid agencies can join in May 2026. Part D plans can join in January 2027.

Coverage remains uneven. As of January 2026, only 13 state Medicaid programs cover GLP-1s for obesity. Four states (California, New Hampshire, Pennsylvania, and South Carolina) have actually eliminated coverage, reflecting budget pressures. Almost four in ten adults and a quarter of children with Medicaid have obesity, meaning coverage expansion could affect millions.

Healthcare Cost Math

The fiscal picture is complicated. A 10-year study estimated $18.2 billion in healthcare savings from expanded Medicare GLP-1 coverage — from reduced downstream costs of obesity-related diseases like diabetes, heart disease, and joint replacement. But those savings are dwarfed by the drug costs: $47.7 billion in net increased Medicare spending over the same period.

On the employer side, cost per member per month for GLP-1s increased from $4.34 in 2022 to $27.23 in Q1 2025. Even with the TrumpRx pricing deal, the budget impact is substantial when 12-20% of a workforce could potentially be on these medications.

The long-term bet — and it is a bet — is that treating obesity pharmaceutically now will prevent expensive chronic diseases later. The evidence for cardiovascular risk reduction is strong (the SELECT trial showed semaglutide reduced major cardiovascular events by 20%). The evidence for net cost savings is still emerging.

The Oral GLP-1 Market Opens

The FDA approved Novo Nordisk's oral Wegovy (semaglutide 25 mg) in December 2025 — the first oral GLP-1 for obesity. It hit 50,000 weekly prescriptions in under three weeks after launch, starting at $149 per month.

Eli Lilly's orforglipron is next, with an FDA decision expected in early-to-mid 2026. Oral options are projected to capture around 20% of the $80 billion obesity GLP-1 market by the end of the decade.

The shift from injection to pill changes the economics in several ways:

Lower barriers to initiation: Many patients who resist starting an injectable will try a pill
Wider prescriber base: Primary care physicians are more comfortable prescribing oral medications
Reduced administration costs: No needles, no refrigeration, no injection training
Potential for further price competition: Small-molecule oral drugs (like orforglipron) are cheaper to manufacture than peptide injectables

For a complete look at next-generation GLP-1 drugs in development, see our pipeline coverage.

FAQ

How much does the average GLP-1 user reduce their food spending?

According to Cornell University research tracking actual household purchase data, GLP-1 users reduce grocery spending by 5.3% within six months. Higher-income households cut spending by 8.2%. When fast food and limited-service restaurants are included, total food spending drops by approximately 8-10%.

Which food categories are most affected by GLP-1 adoption?

Savory snacks, sweets, baked goods, and cookies saw the steepest declines — roughly 10% drops among GLP-1 users. Alcohol also declined. The categories that gained were yogurt, fresh fruit, nutrition bars, and protein-forward snacks.

How much revenue do GLP-1 drugs generate?

GLP-1 products generated $71 billion in cumulative U.S. revenue through 2024. From 2025-2030, they are projected to add $400 billion more, reaching $470 billion in cumulative U.S. revenue by 2030. Eli Lilly alone is guiding for $80-83 billion in total company revenue for 2026, with GLP-1 drugs representing the majority of growth.

Will food prices change because of GLP-1 drugs?

Possibly, over time. If aggregate caloric demand drops by 3% (the scenario assuming 10-20% usage rates among overweight and obese adults), food producers may face pricing pressure on high-calorie, high-volume categories. However, premium, nutrient-dense foods may see price increases as demand shifts toward them.

Are GLP-1 drugs saving the healthcare system money?

Not yet, in net terms. A 10-year projection estimated $18.2 billion in downstream healthcare savings from reduced obesity-related disease, but $47.7 billion in additional net Medicare spending on the drugs themselves. The long-term hypothesis — that treating obesity now prevents expensive chronic diseases later — is plausible but unproven at the system level.

How much do GLP-1 drugs cost now after the pricing deal?

Under the TrumpRx agreement, Medicare prices for Ozempic, Wegovy, Mounjaro, and Zepbound dropped to $245 per month with a $50 copay for beneficiaries. Oral formulations, when approved through the program, will start at $150 per month. These represent 60-70% reductions from prior list prices.

The Bottom Line

GLP-1 drugs are reshaping two of the largest sectors in the economy simultaneously. The food industry faces a structural demand shift — fewer calories consumed, less snacking, less fast food, less alcohol — driven by a drug class that is still in its early growth phase. The pharma industry is experiencing a revenue surge unprecedented in the history of the category, even as pricing pressure from government deals compresses per-unit margins.

The unknowns are real. How many users will stay on these drugs long-term? How quickly will oral options expand the addressable market? Will healthcare cost savings from obesity reduction eventually offset drug spending? The answers will unfold over years, not months.

What is already clear: the "Ozempic economy" is not a media narrative. It is a measurable shift in how tens of millions of people eat, spend, and live. Every company exposed to food consumption patterns or healthcare spending needs a GLP-1 strategy.

References

Liaukonyte J, Hristakeva S, Feler L. "The No-Hunger Games: How GLP-1 Medication Adoption is Changing Consumer Food Demand." SSRN Working Paper, 2025.
Cornell Chronicle. "Ozempic is changing the foods Americans buy." December 2025.
Food Business News. "GLP-1 users cut food spending by 5.3%." 2025.
CNBC. "Eli Lilly's GLP-1 growth is only getting started as Novo Nordisk braces for a decline in 2026." February 2026.
BioSpace. "Lilly's Path to $94B in Revenue Rests on Oral Obesity Market." 2026.
The White House. "Fact Sheet: President Donald J. Trump Announces Major Developments in Bringing Most-Favored-Nation Pricing to American Patients." November 2025.
KFF. "Medicaid Coverage of and Spending on GLP-1s." 2026.
PMC. "Fiscal Impact of Expanded Medicare Coverage for GLP-1 Receptor Agonists to Treat Obesity." PMC12032556.
Harvard Business Review. "How GLP-1 Medications Are Changing Consumer Behavior." October 2025.
ScienceDaily. "How Ozempic and Wegovy are quietly cutting America's food bills." January 2026.
Drug Discovery & Development. "Novo cuts GLP-1 prices 70%, but semaglutide revenue could grow in 2026." 2026.
Mercer. "GLP-1 considerations for 2026: Your questions answered." 2026.