The Prof G Pod with Scott Galloway: No Mercy / No Malice: Seconds

This episode is sponsored by BetterHelp Online Therapy.

Do you ever feel like your brain is getting in its own way?

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I'm Scott Galloway and this is No Mercy, No Malice.

The most disruptive innovation is not happening

inside a neural network or on your phone.

It's not GPT-4, but GLP-1,

an anti-craving miracle drug.

The economic and social second order effects

could be enormous.

Seconds, as read by George Hahn.

We received dozens of thoughtful emails

each week from people, mostly young men,

asking for advice.

They all deserve a response,

but the time-space continuum gets in the way.

So we've set out to leverage AI to develop a digital twin

capable of answering questions in my voice.

PropG.AI is an experiment we hope

will provide insight into AI

and someday help people make better decisions

regarding their offline lives.

Or not.

For more about how and why we made it,

check out our podcast announcement from earlier this week.

Disruptive innovation is often felt more

in second order effects,

clear of the original idea's blast zone.

The automobile was transformative,

not because of the cars,

but the suburban lifestyle they inspired.

Global power was increasingly shaped by the flow of energy,

and the manufacturing innovation required to wrap steel

around four wheels and an engine at scale

became central to the West's economy.

Today, the media, including this newsletter,

is obsessed with the changes wrought by artificial intelligence.

In my view, it's an obsession caused

by the collision of techno-narcissism

and the idolatry of innovators.

Our new gods, tech innovators,

posit that they are the fathers

of the singular point of leverage

that will save or destroy the world.

Quote,

now that my options have vested,

I want to profess that I am such a fucking genius

I'm now worried about my brilliance being unleashed.

I'm so awesome as to be dangerous,

accidentally, of course.

Unquote.

Jesus Christ, get over yourself.

I believe there is another innovation

that will also be transformative

as it's full impact and second order.

effects play out.

What GPT is to the media,

GLP-1 will be to the real economy.

GLP-1 is an agonist,

a hormone our bodies use for internal communication.

Among other things,

it triggers the pancreas to produce insulin,

which brought it to the attention of diabetes researchers

who developed a synthetic form of GLP-1

called semi-glutide.

In 2017,

Novo Nordisk brought semi-glutide to market

in the U.S. under the brand name Osempic.

Note, my use of the word agonist

in the previous paragraph was an attempt

to appear more intellectually svelte.

My use of the word svelte in the previous sentence

is an attempt to sound prim.

Using prim,

more British,

trying always trying,

desperate for other people's affirmation.

But I digress.

The scientists who developed semi-glutide

faced a problem when conducting their research.

If the dose was too high,

patients taking the drug lost their appetite.

Osempic was formulated at a low enough dose

to reduce this side effect.

However,

Novo Nordisk realized this was a feature,

not a bug,

and formulated a higher dose class

specifically for weight loss.

Wagovi, approved in 2021.

Semi-glutide will be followed by similar GLP-1 drugs,

including redotrutide and terzepotide,

both in trials from Eli Lilly.

Studies with overweight patients

show weight loss of 15% to 24% of body weight.

Both Wagovi and Osempic are weekly injectables,

which discourages some people,

but now there's a pill version.

Rebelsis.

Whatever the label on the box,

GLP-1 drugs make us feel fuller for longer

and suppress hunger cravings.

In some, the most effective weight loss drugs

to date.

The market for this product

and the potential for meaningful societal change

are massive.

In America,

70% of people are obese or overweight.

There isn't anything that over two-thirds of America is.

Only 30% of Americans watched

the last season premiere of Game of Thrones.

More than 42% of U.S. adults are obese,

up from 31% in 1991.

Globally, the prevalence of obesity

has tripled since 1975,

and 800 million people,

including 50 million children,

are now obese.

People with limited access to healthy food

or bad genetic luck with their body chemistry

are preyed upon by one of the most well-oiled

marketing and distribution engines ever built,

the Industrial Food Complex.

They'd like to teach the world to sing

in perfect harmony

with addiction and diabetes.

Obesity is not a form of personal expression

or finding one's truth.

It's a disease that invites illness and disability,

including coronary heart disease,

stroke, cancer, gallbladder disease,

and type 2 diabetes.

Globally, obesity is the fifth largest cause

of premature death.

Our healthcare system suffers from many problems,

and the chaser, to many or most of them,

is obesity.

According to the Milken Institute,

the direct and indirect costs of obesity

totaled $1.7 trillion,

or 7% of the U.S. GDP.

A 15% reduction in body weight

would move 43 million Americans

out of the obese column.

In the fourth quarter of 2022,

9 million prescriptions for GLP-1 drugs

were written in the U.S.

Over the past two years,

the share of healthcare patients in the U.S.

using semi-glutide has tripled to 1.7%.

That number will grow

and the estimated 93 million Americans

could benefit from the drug.

I believe even that understates

the economic opportunity for Novo Nordisk

and, eventually, are their GLP-1 drugmakers,

as the numbers understate the demand.

In the past 24 hours,

I have spoken to three people

whom I wouldn't describe as being overweight,

much less obese,

who are on ozempic to lose that last stubborn 15 pounds.

What happens when millions of people

start taking a drug with a limited track record?

The FDA and foreign approval processes are robust.

The average FDA approval involves

six different studies in four phases

over 10 to 15 years.

But they're not perfect.

Long-term and widespread use of a compound

can surface side effects invisible in trials.

The FDA approved a diabetes drug

with a different mechanism,

Rosaglitazone, branded as Vandia, in 1999,

but it has subsequently been associated

with an increased risk of heart failure

and many countries have pulled it from the market.

GLP-1 drugs are already associated

with severe stomach issues

in a small number of patients

and they may cause some people to lose lean muscle.

The obesity economy is the iceberg

below the surface of our $23 trillion consumer economy

and GLP-1 is the latest taste

to inspire salivation across Wall Street's greed glands.

Traders have been shorting restaurant stocks,

putting nearly $1 billion on the do not pass line

in just the last month.

One analyst told CNBC

that the revenue hit to the restaurant business

could be $25 billion by 2025.

The evidence?

Morgan Stanley surveyed 300 ozempic users

and 77% of them said they visit fast food restaurants

less often now that they're on the drug.

Walmart is already seeing a decline in food purchases

among people taking GLP-1 medications.

These effects likely aren't yet visible in firms' EPS

as these drugs are limited in supply

and a fraction of overweight people are taking them.

So far.

However, the stock market is a mechanism

for trying to see around the corner

and the decline in share values

across the obesity industrial complex

will front-run the impact.

Fast food gets hit first,

but fast casual is also under threat.

Look for snack foods, frozen meals, candy,

soda, and baked goods to all take a hit.

Among GLP-1 users,

58% report they ate four or more snacks

per day before taking the drug

and 90% say snacking decreased while they were on it.

In any category, profits are driven

by a minority of customers

and these products' best customers

are becoming Novo Nordisk's newest.

Food sales are an obvious target,

but the effects of lower obesity rates

will inspire other aftershocks,

some greater in magnitude

than that felt at the food epicenter.

One interesting knock-on effect,

it's estimated that United Airlines

would save $80 million a year in fuel costs

if its customers lost an average of 10 pounds.

Sports and fitness will be restructured.

Gyms, built on a consumer-based trying to lose weight,

will see lower revenue,

whereas sports for which fitness is a prerequisite,

skiing, mountain biking, climbing, stand to benefit.

Apparel likely sees a short-term bump

as people splurge on clothes to fit their remodeled bodies,

but the longer-term outlook is harder to predict.

Less yo-yo dieting means some people

won't need separate wardrobes

to accommodate different selves,

but formerly overweight people spending less money on food

might allocate that cash to clothing.

Where else could that extra food budget go?

Discretionary spending increases

will spread through every non-caloric category.

Could this help reverse trends around loneliness

and declining birth rates

as people feel better about themselves

and are increasingly ready to mingle?

If that's all these drugs did,

they'd still be a first ballot hall of fame medical breakthrough.

But this may be just the beginning.

The Washington Post reports, quote,

for some, these new weight-loss drugs

also seem to dampen the rewards of addictive substances,

whether that's nicotine, opioids, or alcohol, unquote.

Let that sink in.

It's possible GLP-1 drugs

are not weight-loss drugs,

but anti-craving drugs.

In lab tests, mice, on an earlier form of synthetic GLP-1,

receive a lower dopamine hit from alcohol.

Rats are less interested in cocaine.

Monkeys, with a demonstrated preference for booze,

drank less.

Anecdotal evidence from human users

includes reports of reduced nail biting,

shopping, and smoking.

If you scroll back through previous issues of this newsletter,

you'll find a recurring theme.

Societal ills resulting from cravings.

From meme stocks and Robinhood

to TikTok addiction and Twitter enragement

to obesity itself.

Human weakness, subjugated to our brain's reward circuitry,

is no less a threat to our well-being

than climate change, authoritarianism, or cancer.

According to Harvard's grant study on happiness,

the factor most commonly present in the least happy cohort

was alcohol.

It's that fundamental.

A drug that rewires these reward circuits

could be an epical step in human evolution.

And why not?

We've compensated for evolution in many other ways,

from the protection of clothing

to the assistance of eyeglasses

to the power of wheeled transport.

Perhaps we've reached the point where a salt-fat Dopa drive,

evolved on the savanna of scarcity,

can give way to a motivational superstructure

suited for our era of superabundance.

GLP-1 innovation may be scaffolding

for instincts in need of updating.

Large healthcare insurance companies and providers,

starting with the U.S. government,

could make delivering GLP-1 drugs a priority,

instead of pulling back

as the short-sighted insurance industry has done.

Globally, the WHO and national health organizations

could do the same.

You can get ozempic over the counter

in five Emirates in the Gulf.

And Americans are venturing to Mexico and Canada,

where cost is, spoiler alert,

a fraction of what it is in the U.S.

Government funding will test the fulcrum

between the obesity industrial complex,

food, pharmaceutical, and hospital networks,

and long-term economic thinking,

because these drugs will register

an enormous ROI for society

as healthcare costs decline

and mental health improves.

Depression rates among obese children

are double those of average-weight kids

and can haunt them in adulthood.

The 5% reduction in weight

can cut an obese person's medical costs

by $2,000 per year.

And it's estimated that a full transition

from obese to a healthy weight

saves nearly $30,000

in direct medical costs and productivity.

Fun fact, my digital twin,

profg.ai, believes, quote,

Obesity drugs, while important for public health,

are more of a niche solution, unquote.

It's obvious he disagrees with me

as he's jealous I got to go

to Chiltern Firehouse in person last night.

Anyway, the potential to calibrate the drug

for specific addictions is mind-blowing.

One can envision similar hormone-mimicking drugs

that could be engineered to address addictions to money.

Affirmation from strangers,

short-form videos of chiropractic care,

World War II documentaries,

Zocapa, edibles, smoked meats,

or reading random theories about the universe.

Because here's the thing.

I'm slim, but obese.

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Machine-generated transcript that may contain inaccuracies.