GLP-1 Drugs and Demand for Ultra-processed food

• In Event: Food and Fitness

Abstract

This paper examines the causal impact of GLP-1 receptor agonist adoption on household food purchasing behavior in the United States. GLP-1 medications, originally developed for type 2 diabetes and more recently approved for weight management, have rapidly expanded in use and are increasingly central to policy discussions on obesity treatment and healthcare spending. At the same time, ultra-processed foods account for a large share of caloric intake in the United States and are strongly linked to obesity and related chronic conditions. Understanding how GLP-1 medications affect both the level and composition of food consumption is therefore important for evaluating their broader policy implications.

We use household-level scanner data from Circana covering the period 2019 to 2023, which we link to prescription records to identify the timing of GLP-1 adoption. The treatment group consists of households initiating a GLP-1 prescription, while the comparison group includes households initiating non-GLP-1 diabetes medications, and households before starting a GLP-1 prescription. Monthly food-at-home expenditures are aggregated by NOVA processing categories, which classify foods into four groups ranging from minimally processed to ultra-processed. Product classification is constructed using a combination of best-practice category mapping, ingredient-level data from the USDA Branded Foods Database, and a supervised machine learning approach based on product descriptions and ingredient lists.

To estimate causal effects, we implement a staggered difference-in-differences framework following Callaway and Sant’Anna, incorporating generalized propensity scores and household-level controls. We find that GLP-1 adoption reduces total household food-at-home spending by approximately $56 per month. In addition to this overall reduction, we observe significant changes in dietary composition. Spending on minimally processed foods increases by 3%, while the budget share allocated to ultra-processed foods declines by 2%. These results indicate that GLP-1 medications not only reduce consumption but also induce substitution toward higher-quality foods. The decline in ultra-processed food share remains robust to alternative anticipation windows.We further examine heterogeneity across three classes of GLP-1 medications that differ in their effects on appetite and weight loss. The results suggest that reductions in ultra-processed food consumption are driven primarily by higher efficacy drugs, while increases in minimally processed food consumption are more pronounced for lower efficacy medications.

These findings have important implications for public policy. Expanding access to GLP-1 medications may generate nutritional spillovers beyond weight loss by improving diet quality. This suggests that pharmaceutical interventions and food policy may operate as complements in addressing obesity and diet-related health disparities.

Author

• Koroles Awad, American University
  Presenting Author