Whether you realize it, obesity, which was officially classified as a disease earlier this year by the American Medical Association, is a complex problem that's threatening the health and well-being of a significant portion of this country.
According to the American Medical Association, 35.7% of U.S. adults are considered obese, with roughly two-thirds of adults considered overweight or obese. You might be under the impression that obesity is just a personal problem that has no bearing on you or your family, but I'd contend that you'd be wrong.
Source: Centers for Disease Control and Prevention.
Obesity-related health problems cost an additional $190 billion each year because of the complications that arise from being overweight. Compared to a person of average weight, obese patients' medical costs averaged out to be 50% higher. Higher medical costs mean higher health insurance premiums for everyone, as well as a stressed medical system that may soon not have enough doctors to treat patients in need of care.
We're going the wrong way
In response to this growing need to stem obesity trends, the CDC has done its best to boost educational awareness of the disease, most restaurants and grocery stores have boosted the number of healthier food offerings they carry, and First Lady Michelle Obama even launched an initiative known as "Let's Move" to teach children about healthier eating habits and keep them exercising.
We would like to think these initiatives are working, but according to the latest poll from Gallup they aren't.
Since the beginning of the year, Gallup has interviewed some 150,600 people across the U.S. (a relatively strong sample) and asked them whether they "ate healthfully all day yesterday." Gallup has conducted this poll each month since January 2008, and within the past year we've seen a dramatic decline in healthier eating habits as you can see below:
Source: Gallup.
Why are we eating so poorly?
In each and every month this year, we've seen a statistically lower number of respondents admitting to eating healthy during the day compared to 2012. The way I see it, there are a number of reasons we could be seeing this trend of unhealthier eating habits taking hold.
First, the rollback of the payroll tax holiday as of Dec. 31, 2012, means that all taxpayers are now ponying up an additional 2% of their income toward taxes each paycheck. Less disposable income means a potentially smaller food and grocery budget, which can result in a smaller selection of food and poor eating habits.
On a similar accord, the passing of the Patient Protection and Affordable Care Act, which you may recognize better as Obamacare, could be another factor reducing disposable income. The actionable part of the PPACA, known as the individual mandate, requires Americans to purchase health insurance starting Jan. 1 or face a penalty. This extra monthly allowance to pay for health insurance for those currently going without is another factor that could affect food budgets, and thus healthy eating habits.
Finally, I believe socioeconomic factors in general, including the potential for job advancement and wage growth, are also playing a role in deteriorating healthy eating habits. While we've witnessed the unemployment rate sink and weekly jobless claims drop on a somewhat regular basis, a significant number of jobs created this year have been part-time in nature. Part-time job creation is a start, don't get me wrong; but it's not going to allow most workers the ability to set aside enough money for more nutritious foods.
The end of result of the above factors is that we're turning toward high sodium and calorie but low nutritional content fast-food because of the perception that it's cheaper.
How this changes
There are really three factors that need to come together if we're going to battle the bulge and be successful.
The first factor is really up to each individual. An effort has to be made to exercise regularly; cut down on foods high in fat content, sodium, and cholesterol; and do those other intangibles that comprise healthy living. I'm in no way suggesting that diet and exercise is the end-all, cure-all for obesity as genetic makeup, medications being taken, socioeconomic status, and a number of other factors can influence a person's weight -- but it's a solid start.
The second factor needed to curb obesity is a conscientious move by fast-food and casual restaurants away from foods high in calorie content and toward more nutritious food products. We not only need these restaurants to offer a more balanced menu, but we need them offer these items at a comparable price point to currently popular belt-busting meals.
One company doing an exemplary job of this is Chipotle Mexican Grill (CMG +0.91%), whose Food With Integrity pledge is helping to revolutionize the casual dining industry. Chipotle has made deals with local farmers to supply fresh fruits and vegetables where possible while also using meats which are antibiotic and hormone-free. Although this can actually lead to slightly higher expenses, Chipotle has done a good job showing restraint in raising its prices. Instead, it's able to offer a comparably priced meal to what you'd find at numerous fast-food chains with considerably more nutritional value.
Another company worthy of a pat on the back is Panera Bread (PNRA +0.00%), which offers the convenience of drive-thru in some of its locations while also offering its patrons a variety of soups, salads, sandwiches, and pastas that are divvied out in reasonable calorie-based serving portions. Like Chipotle, Panera's products are priced comparably to that of fast-food restaurants, which should hopefully improve consumer awareness that healthier foods can often be had on a relatively tight budget. If anything, it's certainly improved Panera's customer traffic!
The final factor, when all else fails, is to allow weight control management medications to step in as an adjuvant therapy to diet and exercise.
Last year, we witnessed the approval of two new anti-obesity medications for the first time in more than a decade: Qsymia by VIVUS (VVUS +0.00%) and Belviq by Arena Pharmaceuticals (ARNA +0.00%). Neither drug has really impressed Wall Street since their launch, but it's still early, and some insurers have yet to latch onto covering these new drugs. In late-stage clinical trials, VIVUS' Qsymia offered the greater potential weight-loss of the two drugs, however Belviq delivered the more favorable safety profile of the two. A further differentiating factor is that VIVUS is marketing Qsymia entirely on its own while Arena partnered with global pharmaceutical giant Eisai to handle its marketing.
Both Qsymia and Belviq, though, may wind up taking a backseat to Orexigen Therapeutics' (NASDAQ: OREX) Contrave. Orexigen actually brought Contrave before the Food and Drug Administration in 2011 and was rejected due to cardiovascular safety concerns. Having now completed a 9,800 patient safety study, known as the Light Study, demonstrating that Contrave didn't increase heart attack risk or offer any additional side effects, Contrave could have a clear path for both a U.S. and an EU approval. That would certainly give Orexigen an edge in Europe since Qsymia (known in the EU as Qsiva) was denied approval and Belviq pulled its marketing authorization application after it was staring down a similar fate due to safety concerns.
