When the pharmaceutical industry meets agriculture: GLP-1 adoption and implications for 1 farmers, trade, and environment

Rui Liu, Emiliano Lopez Barrera, Dominic Vieira and Brian Roe

No 404673, 2026 Annual Meeting, July 26 - 28, 2026, Kansas City, Missouri from Agricultural and Applied Economics Association

Abstract: Differences in pharmaceutical regulatory frameworks, including patent protection, approval 26 timelines, pricing policies, and market access conditions, shape the pace and scale of adoption of 27 anti-obesity medications such as glucagon-like peptide-1 (GLP-1) receptor agonists across 28 countries. Although these medicines are primarily discussed in health contexts, regulatory-driven 29 variation in adoption can induce large-scale dietary shifts that propagate through agri-food 30 systems. Here, we examine how heterogeneous regulatory environments influence GLP-1 31 diffusion and how the resulting behavioral changes translate into economy-wide adjustments in 32 U.S. agriculture, trade, welfare, factor markets, and environmental outcomes. We combine a Bass 33 diffusion model of pharmaceutical adoption with the GTAP-RD recursive dynamic computable 34 general equilibrium framework to simulate alternative adoption scenarios across North America through 2030, distinguishing between current clinical coverage and expanded weight-36 management access. Preliminary results suggest that asynchronous adoption across trading 37 partners alters relative demand conditions and shifts sectoral comparative advantages, generating 38 trade-mediated reallocation of U.S. production and export patterns. Within the United States, 39 agricultural land markets emerge as the primary adjustment margin, with land rents declining 40 substantially relative to baseline levels, while labor and capital markets remain comparatively 41 stable. Reduced output in emission-intensive sectors generates systematic declines in U.S. 42 production-side greenhouse gas and CO2 emissions, highlighting a tension between 43 environmental gains and pressures on agricultural land values. Overall, these findings suggest 44 that pharmaceutical regulation can act as an indirect driver of food-system transformation, 45 underscoring the importance of cross-sector policy perspectives when evaluating how emerging 46 health technologies reshape sustainability outcomes, trade relationships, and producer 47 livelihoods.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 25
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea26:404673

DOI: 10.22004/ag.econ.404673

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