The 7 Most Obese U.S. Stateshttp://www.fool.com/investing/general/2013/05/26/the-7-most-obese-us-states.aspx Sean Williams
May 26, 2013
Obesity in the U.S. is a growing problem in more ways than one.
The U.S., which ranks as the most obese nation in the world according to the Organization for Economic Cooperation and Development, has seen a relatively steady increase over the past couple of decades in obesity rates which brings with it the potential for added health complications like cardiovascular disease, diabetes, and even cancer. More so, the amount of resources being devoted to treating obesity and obesity-related complications is soaring. Based on figures from a study from Cornell University in the Journal of Health Economics published last year, obesity costs accounted for 21% of all health expenditures in the United States.
The scope of this problem is particularly evident in the nation's most obese states. In a recent Gallup poll conducted in collaboration with Healthways, the following seven states were determined to have the highest obesity rates:
More of the same
Here, we also have a mixture of culture -- a reliance on deep-fried foods and food high in fat content -- and socioeconomic status making up the bulk of the reasoning behind the belt-widening status of these states. According to data from the U.S. Census Bureau averaged over a three-year period, Mississippi, Arkansas, and Tennessee (all among the most obese states) were the first, second, and third lowest in terms of median household income. With fewer nutritious food choices available to the typical family in these states, fast-food restaurants have thrived.
As a compassionate group of people, we'd all love to see these figures beginning to reverse, because it would result in lower cumulative health-care costs, less strain on the health-care system, and an overall healthier population. For pharmaceutical and biotech companies, however, the opportunity to manage obesity and its related complications is poised to be undeniably profitable for decades to come.
The battle over obesity
VIVUS's Qsymia has been available since September, but sales haven't exactly shot out of the gate. Partly to blame was that insurers have been slow to latch onto covering these chronic weight-management drugs, and few users are willing to pay for the medication out of pocket. From a clinical standpoint, Qsymia delivered better results with regard to weight loss relative to Belviq, but Belviq presented the more favorable safety profile of the two. This could be a case where it takes years to determine which drug is better. But that may not matter in the end, as the patient pool is certainly big enough to accommodate both drugs.
Complications matter, too!
J&J's Invokana, for example, got FDA approval in March after delivering lower A1C levels in trials and improving glycemic balance. Bristol-Myers and AstraZeneca weren't nearly as lucky in the U.S., getting a complete response letter in January 2012 because of concerns over elevated cancer risks, but they did get their SGLT2 inhibitor known as Forxiga approved in Europe. It could just be a matter of time, though, before Forxiga finds itself back in front of the FDA looking for another approval.
A scary risk factor
Think about the dozens of cancer medications already on the market and being developed that will see sales soar if obesity trends continue to climb. One potential beneficiary here is Pfizer's (NYSE: PFE) Sutent, which is approved to treat kidney cancer, pancreatic neuroendocrine tumors, and gastrointestinal stromal tumors. Sutent is already a blockbuster, with sales totaling $1.24 billion in 2012 and 10% growth witnessed in the United States. If obesity rates track higher, it's likely to see a steady increase in sales.