In a significant move, Eli Lilly, the U.S.-based pharmaceutical giant, is advocating for its weight-loss drug Mounjaro to be added to Australia’s Pharmaceutical Benefits Scheme (PBS), a policy that would see taxpayers subsidize the cost for individuals with severe obesity. The proposal, which seeks to expand access to GLP-1 class drugs, marks a crucial test for the Australian government in deciding whether to fund newer, high-demand obesity medications.
Mounjaro, which competes with Novo Nordisk’s Ozempic, has gained significant attention worldwide as a popular weight-loss solution. The push for its PBS inclusion comes after similar moves in other countries, including the United Kingdom, where Mounjaro is being made available through the National Health Service (NHS) for patients with obesity-related conditions.
Eli Lilly plans to submit an official request for PBS listing in mid-2025, with the focus on subsidizing the drug for individuals with obesity-related health risks, such as heart disease, diabetes, and stroke. While this move would not apply to general weight loss, the pharmaceutical giant is emphasizing the long-term economic benefits of wider access, arguing that reducing the prevalence of obesity could alleviate future strain on Australia’s healthcare system.
Currently, GLP-1 medications like Mounjaro and Ozempic, which are priced between $345 and $645 per month, are privately funded. If Mounjaro were to be included in the PBS, it would follow in the footsteps of Ozempic, which is already subsidized for diabetes treatment, but not for weight management.
The potential inclusion of weight-loss drugs in the PBS would represent a watershed moment for the burgeoning weight-loss drug market, which has seen millions of people worldwide paying out-of-pocket for weekly injections. Eli Lilly’s request also coincides with similar considerations in the U.S., where the Biden administration is evaluating the possibility of subsidizing anti-obesity medications.
Government’s Hesitation and Potential Limits
Eli Lilly’s proposal will test the resolve of the Australian government, particularly the Labor Party, in balancing the widespread popularity of these medications with the financial burden they could impose on the healthcare system. As demand for weight-loss drugs soars, there are concerns that an overextended PBS program could push public health funding to its limits. One possible solution could be the implementation of caps on the number of subsidized prescriptions, with pharmaceutical companies being asked to shoulder any additional costs.
So far, the Australian government has been reluctant to approve broad subsidies for GLP-1 drugs beyond their use for diabetes management. In late 2023, the Pharmaceutical Benefits Advisory Committee (PBAC), which oversees drug listings, rejected Novo Nordisk’s application for its weight-loss medication Wegovy. This rejection has fueled doubts about the likelihood of a similar outcome for Eli Lilly’s Mounjaro.
However, Eli Lilly remains optimistic, noting that there is growing awareness among Australian policymakers and healthcare professionals about the potential health benefits of these medications. Tori Brown, Eli Lilly’s General Manager for Australia and New Zealand, confirmed that the company intends to submit a funding application next year. Brown emphasized that the submission would target individuals with severe obesity and associated health risks, including diabetes and cardiovascular issues.
International Context: UK’s Progressive Stance
The debate over subsidizing weight-loss drugs is not unique to Australia. In December 2023, the UK’s National Institute for Health and Care Excellence (NICE) recommended that Mounjaro be made available to approximately 3.4 million individuals through the NHS, contingent upon adherence to a diet and exercise regimen. However, access to the drug will be limited to patients with a body mass index (BMI) of 35 or higher, and those suffering from at least one obesity-related condition. This phased implementation will take place over the next 12 years.
Meanwhile, the debate continues in Australia. Matt Vickers, clinical director of Eucalyptus, a Woolworths-backed telehealth provider that has earned over $100 million from weight-loss services across several countries, expressed concern that Australia was lagging behind the UK in adopting more progressive approaches to obesity treatment. Eucalyptus operates in Australia, Japan, the UK, and Germany, and Vickers believes Australia should adopt similar measures to improve access to life-changing medications.
“Australia is taking a more conservative approach, and unfortunately, it’s leaving people behind, especially those who can’t afford these treatments privately,” Vickers said. “In the UK, they are looking at a more scientific, progressive approach. Australia seems content with the current status, which doesn’t address the needs of the many Australians who struggle with obesity and can’t access these drugs due to cost.”
Scientific and Economic Challenges
Despite mounting demand and significant public interest, the debate over subsidizing weight-loss drugs in Australia has been complicated by a need for more real-world evidence. While the drugs are gaining popularity on social media and are celebrated by celebrities, regulators are pushing for further clinical trial data to prove their efficacy in treating obesity beyond just weight loss.
In a new study funded by Eli Lilly, Mounjaro was found to produce an average weight loss of 20.2% among participants, surpassing the 13.7% weight loss achieved by Novo Nordisk’s Wegovy. However, critics caution that industry-sponsored trials may be subject to bias, and regulators continue to demand more independent data before making a decision.
According to Eucalyptus, an estimated 11.8% of men and 13.4% of women in Australia have a BMI of 35 or higher, with 64% of the population classified as overweight. This is comparable to the UK, where 64.2% of adults are overweight. These statistics underscore the growing public health concern that could make weight-loss drugs like Mounjaro a key part of obesity management moving forward.
As the debate intensifies, stakeholders in the pharmaceutical industry are hopeful that the political landscape is shifting, making 2025 a potentially pivotal year for access to these medications. If Mounjaro and similar drugs are approved for PBS funding, it could signal the beginning of a new chapter in obesity treatment, with long-term benefits for both individuals and the Australian healthcare system.
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