Ozempic and Wegovy have the potential to change the landscape of American public health, but only if we let them. These drugs, which first gained public interest as new weight management tools for the ultra-rich, are much more than vanity tools. In August, clinical trials found that injections of semaglutide, the main chemical compound in Ozempic and Wegovy, reduced users’ risk of heart attacks by 20% and also prevented strokes and heart disease.
Although the effectiveness of these drugs has drawn almost universal praise, food and beverage megacorporations are not smiling. On October 6, after Walmart saw a drop in food sales linked to increased use of semaglutide, its stock price fell 1.68%. In response, shares of Coca-Cola and PepsiCo fell 4.8% and 5.2%, respectively. Once you dry the tears you’ll inevitably shed over the lowly beverage CEO’s declining dividends, this stock drop is pretty damning — the financial interests of the processed food giants are at odds with the well-being of the American people.
None of this is news. Researchers and nutrition experts have long understood that snacks and sodas are designed to be addictive. The chemical and nutritional qualities that cause this addiction contribute to conditions such as diabetes and cardiovascular disease. The astronomical revenues enjoyed by companies such as McDonald’s and Coca-Cola depend on the binge eating habits and frequent purchases of repeat customers. Both behaviors are moderated by the effects of Ozempic and Wegovy, which mimic hormones that make the brain less hungry.
The current costs of these drugs are in line with their effectiveness. As of September, a one-month supply of Ozempic costs $900; Wegovy fell lower at an unaffordable monthly price of $270. Still, the benefits of pharmaceuticals may still be worth subsidizing. Aside from the obvious improvement in quality of life that many recipients would enjoy, America’s obesity epidemic is an economic disaster. Medical costs imposed by obesity on patients cost between $147 billion and $210 billion annually, and the associated lost productivity is also costly. Whatever the exact calculation of the value of a public provision, the funds will have to come from somewhere.
To finance the supply of weight loss drugs, policymakers must turn to the sales that made them necessary in the first place. An excise tax on the sale of all sodas, processed snacks and other grossly unhealthy products would generate significant tax revenue with money taken from exploitative companies. Think of it as a tax on cigarettes. After all, junk food causes more deaths annually in the United States than cigarettes. Determining the exact tax rate and the exact products to be taxed should be done by experts, but the disincentive effect should be great.
High-society economists may oppose this proposal, but the current situation is a demonstration of the accidental pitfalls of the free market principles they espouse. Any potential outcome of the tax would benefit the consumer. If higher prices as a consequence of the tax cause fewer customers to buy junk food, the consumer’s health benefits in the long run; if demand continues, but tax revenue funds drug purchases, the consumer’s health also benefits. Opponents may cry that taxes on soda and chips hurt small business owners, a disingenuous argument. Walmart alone sells 25.2% of all groceries in the United States, and competitors like Target, Food Lion, Publix and others make up most of the rest of the pie. A reduction in food sales revenue would primarily hurt big business and level the economic playing field.
Whether such a tax is enacted at the municipal, state, or federal level is less important than whether it applies to a sufficiently large proportion of the population. Evanston is uniquely positioned to lead the charge as a city with a history of progressive and pioneering legislation.
The junk food tax may look a lot like the local cigarette tax: Evanston currently adds a tax of $0.50 to $6 on top of the Cook County and Illinois tax on each pack for sale within the city. Because state and county taxes on junk food do not yet exist, Evanston could start the policy with an additional tax of $1 for each 12-pack of soda or each bag of snack chips.
There are many questions about such a tax that need to be fleshed out in legislative sessions. States with more robust public health infrastructures, such as Massachusetts, may find it easier to enact such a tax. Increasing the effective price of the cheapest food available can be a burden for individuals and families with lower disposable income. All these considerations should be left to the politicians and therefore to their constituents.
However, the need for some variant of the tax is clear. The public will need cheap and affordable semaglutide, and no one should have to pay for it, before the junk food giants pull their weight.
Peter Ryan is Weinberg Jr. He can be contacted at [email protected]. If you would like to respond publicly to this post, please send a letter to the editor at [email protected]. The opinions expressed in this material do not necessarily reflect the views of all employees of The Daily Northwestern.