Slim Chance: Drugs Will Reshape the Weight Loss Industry, But Habit Change Might Be Elusive

Year after year, millions of people make a new year’s resolution to lose weight. But because success traditionally depends on making major lifestyle changes, like eating healthier and exercising more, many people fall short of their fitness goals.

Yet in 2024, more people will likely gravitate to what may at first blush appear to be an easier fix: new drugs such as Ozempic, Wegovy, and Mounjaro, says Harvard Business School Professor Regina E. Herzlinger, who has studied the American health care system for decades. Wegovy has been approved by the Federal Drug Administration to treat obesity, while Ozempic and Mounjaro have been approved to treat diabetes, but are sometimes used to lose weight.

These medications are likely to profoundly alter the $76 billion weight loss industry, largely, Herzlinger says, because people have seen mixed results using diet-management programs like Weight Watchers, Jenny Craig, the Atkins Diet, and Noom.

“The weight loss industry was not a terribly significant part of the health care system until we got two technological innovations: Bariatric surgery to the gastrointestinal system became popular, and in the past two to three years, various drugs to reduce appetite have become very popular.”

While Herzlinger is concerned about the potential side effects of weight loss drugs, she says a solution to morbid obesity is necessary. The rise of the drugs prompted Herzlinger to update a 2003 case study called “Fighting the Battle of the Bulge,” which she coauthored with John McDonough, a former MBA student at HBS. The case notes that morbidly obese Americans spend more on medical services and prescriptions, and they face a potentially wider range of health problems, including heart disease and cancer. Obesity also impacts the workplace, leading employees to miss more days of work.

Herzlinger, the Nancy R. McPherson Professor of Business Administration at HBS, recently spoke to HBS Working Knowledge about the challenges of treating morbid obesity, how diet-and-exercise plans compare to weight loss drugs, and the impact of Weight Watchers’ move in 2023 away from its signature group meetings and nutritional products to providing Wegovy prescriptions via telehealth. The interview has been lightly edited for length and clarity.

Lane Lambert: The Weight Watchers marketing change looks like a dramatic move away from its previous focus on eating healthy and limiting portion sizes with support groups often composed of Weight Watchers alums. How significant is this change?

Regina Herzlinger: It means there will be a huge shift to the drug-based model. But that does not mean the support-based model will not have adherents. Some people will be wary of the drugs and prefer the alternative models.

Lambert: So new drugs like Ozempic and Wegovy really are going to change the weight loss industry?

Herzlinger: Yes. They’re helpful, no question. But don’t get stars in your eyes. What’s wrong about them is that you’re not just losing fat; you’re also losing muscle. You do not want to lose muscle.

They’re not a cure. They work on the brain. They suppress the appetite. But 10 years later, what will happen to the brain and other body parts? They can’t predict that today.

Morbid obesity is a very serious problem, and there is no solution for it except [bariatric] surgery. On the other hand, I think the other shoe [of side effects from the drugs] will fall. It’s already evident that the drugs injure the stomach. None of these things are foolproof. Nevertheless, these are the best things we have to date.

Lambert: Overall, how significant a part of US health care is the consumer weight loss industry?

Herzlinger: First of all, the main problem is morbid obesity, not just being overweight. It’s the threat of death. Forty to 60 percent of illnesses—cardiovascular, diabetes, others—are caused because people are so heavy that it injures their health. It’s the cause of so many complications.

The weight loss industry was not a terribly significant part of the health care system until we got two technological innovations: Bariatric surgery to the gastrointestinal system became popular, and in the past two to three years, various drugs to reduce appetite have become very popular.

Lambert: Is this the American model for weight management: different programs for different needs and attitudes?

Herzlinger: Yes. Employers have tried to offer successful fitness plans, and it’s difficult. It is great that schools now offer wholesome foods, but the success is very minimal. People like french fries. A digital health system [like the Noom app] could work, if people didn’t quit using it after two or three years. And there are consumer programs. Weight Watchers filled an important need with group meetings, but it will not always help those with morbid obesity.

Lambert: Will there always be a place for the diet-exercise model?

Herzlinger: Diet and exercise is undoubtedly the best remedy. I’m not a fan of either surgery or drugs. I wish people would modify their lifestyle. But to be realistic, compared to quick fixes, such as surgery or drugs … it is not going to be widely taken up. Americans are very overworked. People are terribly stressed. How do they find the time for a diet like that?

Editor’s note: Regina Herzlinger doesn’t have a financial stake in any of the companies mentioned in the case study.

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