Why There's More Money in Maintaining the Obesity Crisis Than Ending It

Last Updated Aug 10, 2011 9:52 PM EDT

Ending the obesity epidemic is turning out to be a bust for the drug business. The FDA has nixed all recent attempts to launch three new weight-loss pills and removed an existing drug, Meridia, from the market. Three companies -- GlaxoSmithKline (GSK), Medicis (MRX) and Allergan (AGN) -- are either trying to exit the market or are seeing declining sales of their already marginal obesity products.

It's a far cry from just two years ago, when analysts forecast a gold rush in the obesity market, with products estimated to make up to $10 billion a year in revenues. But there's still money to be made from obesity, as long as most people don't actually lose weight.

Here's the recent history:

As America gets fatter, many in the health business assumed there would be huge sums to be made trying to get people to lose weight. Counter-intuitively, though, the only companies making serious money in the obesity business aren't treating obesity -- they're treating the symptoms and side effects of obesity. Novo Nordisk (NVO), for instance, is devoted almost entirely to selling drugs for diabetes. Its sales of diabetes products increased 10 percent in the first half of the year to $4.6 billion. You could add in the billions made on cholesterol and high blood pressure drugs, by dozens of companies, too.

There is much more money to be made in keeping America fat than there is in reducing its weight, a notion that ought to tantalize conspiracy theorists everywhere.


Image by Ed Yourdon, CC.