GLP-1 drugs could save Uncle Sam billions, and Congress should take that into account
The United States faces a growing public health and economic challenge: obesity. More than 40% of American adults suffer from obesity, which costs the health care system an estimated $173 billion annually. And this is just the tip of the iceberg. Beyond direct medical costs, obesity reduces workforce participation, puts pressure on public infrastructure, and slows economic growth.
As Congress works to address this challenge, it needs better tools to account for the far-reaching economic and social costs of obesity and efforts to mitigate them. To this end, the Congressional Budget Office must improve how it evaluates the long-term impact of obesity treatment. As Congress considers proposals to expand Medicare coverage of weight-loss drugs, the Congressional Budget Office must adopt scoring approaches that take into account the full economic and fiscal impacts of these treatments.
A new class of therapies—GLP-1 receptor agonists—are showing promise for altering the course of obesity and its associated burdens. GLP-1, like semaglutide (Wegovy, Ozempic) and tirzepatide (Mounjaro, Zepbound), was originally developed to treat diabetes and shows significant benefits for weight loss and reducing comorbidities such as type 2 diabetes and cardiovascular disease.
Clinical findings have begun to reshape medical practice. For example, the American College of Cardiology recently recommended GLP-1s as first-line treatment for obesity in patients at high risk for cardiovascular disease, citing their superior efficacy over lifestyle interventions and favorable safety profile compared with surgery. Clinical trials have shown an average weight loss of 15 percent, results that were previously only achievable through bariatric surgery. This level of effectiveness, coupled with high demand, represents a potential inflection point in how obesity is treated.
Until now, the Congressional Budget Office has relied on fixed enrollment to assess coverage of weight-loss drugs. This method estimates the direct impact of proposed policies on the budget over a 10-year period without taking into account broader economic changes, such as increased labor force participation, declines in deficit claims and gains in tax revenue.
The Congressional Budget Office uses a fixed scoring system because it is cautious about speculating on the effects of uncertain economic reactions, focusing instead on the direct impact of policies on the budget. However, this approach fails to understand the long-term, cross-sector indirect impacts of health innovations such as GLP-1s.
What the Congressional Budget Office misses is that obesity is not only a medical problem, but also a drag on the broader economy. Expanding access to effective treatments can reduce health care spending and boost productivity and economic growth across sectors.
The food and beverage industry is a great example: Early evidence suggests that the use of GLP-1 may shift consumer demand away from ultra-processed foods such as snacks, desserts, and baked goods. Although these shifts may disrupt certain product categories, they create space for innovation in healthy food products and supply chains.
The labor market is also expected to benefit from improved obesity outcomes. Obesity-related conditions lead to reduced workforce participation, increased disability claims, and reduced productivity. Absenteeism and “presenteeism” – when employees are absent from work or unable to perform to their full potential – are among the most persistent and costly challenges for employers.
In 2023 alone, absenteeism due to obesity cost US employers $82.3 billion, while presenteeism added another $160.3 billion in lost productivity. Broadly improving health outcomes can strengthen the workforce and boost tax revenues, but these macroeconomic impacts are not reflected in the Congressional Budget Office’s current scoring models – highlighting the need for tools capable of better accounting for the broader economic impact of obesity.
To better evaluate the economic impact of a particular treatment, dynamic scoring should be used. Unlike static models, dynamic scoring accounts for macroeconomic feedback effects—how policy can affect economic behavior, production, and other high-level indicators over time. The Congressional Budget Office has used the dynamic scoring system in selected cases of major legislation.
For example, in evaluating the Tax Cuts and Jobs Act of 2017, which lowered corporate and individual tax rates to stimulate growth, the Congressional Budget Office and the Joint Committee on Taxation estimated how changes in tax policy would affect GDP, employment, and federal revenues. Under current House rules, dynamic filing is required for bills with an expected fiscal impact of at least 0.25% of GDP (about $75 billion).
But this economic threshold should not be the only determining factor for the application of such models. Policies such as GLP-1 coverage may not meet such thresholds, although their broader impact may be much greater. For example, a bill to expand Medicare coverage of GLP-1s to treat obesity might seem expensive under fixed enrollment. But dynamic scoring can provide a more complete view – capturing future healthcare savings, productivity gains, and economic benefits across sectors.
Of course, dynamic scoring involves assumptions and uncertainty – but this is the case for all budget forecasts. The biggest risk is that broader economic impacts are completely omitted, which could lead to underinvestment in treatments that deliver significant social and economic returns.
Make no mistake, GLP-1 devices are not a silver bullet. Equitable access, clinical supervision, and integration with lifestyle support will remain essential. But when used strategically, GLP-1 offers a rare opportunity to address chronic diseases in a way that also promotes economic resilience.
It’s not just about reducing body weight, it’s about unlocking economic potential by reducing long-term health care expenses, strengthening the workforce, and relieving pressure on key public systems. The federal budget process must reflect this reality. If the United States is serious about tackling obesity, it must improve how it evaluates policies designed to do so.
Sandra Barboso, Ph.D., is Associate Director of the ITIF Center for Life Sciences Innovation, where she conducts research in the economics of science and innovation with a focus on emerging healthcare technologies. She is also an assistant professor at New York University’s Tandon School of Engineering.
