England subsidises drugs like Ozepmic for weight loss. Could Australia follow?
- Written by: Jonathan Karnon, Professor of Health Economics, Flinders University
People with a high body weight living in England can now access subsidised weight-loss drugs to treat their obesity. This includes Wegovy (the weight-loss dose of Ozempic, or semaglutide) and Mounjaro (one of the brand names for tirzepatide).
These drugs, known as GLP-1 agonists, can improve the health of people who are overweight or obese and are unable to lose weight and keep it off using other approaches.
In Australia, the government subsidises the cost of semaglutide (Ozempic) for people with diabetes.
But it is yet to subsidise semaglutide (Wegovy) on the Pharmaceutical Benefits Scheme (PBS) for weight loss.
This is despite Australia’s regulator approving GLP-1 agonists for people with obesity, and for overweight people with at least one weight-related condition.
This leaves Australians who use Wegovy for weight loss paying around A$450–500 out of pocket per month.
But could Australia follow the England’s lead and list drugs such as Wegovy or Mounjaro on the PBS for weight loss? Doing so could bring the price down to $31.60 ($7.70 concession).
Australia has already knocked back Wegovy for subsidies
The Pharmaceutical Benefits Advisory Committee (PBAC) reviews the submissions pharmaceutical companies make for their drug therapies to be subsidised through the PBS.
For every such recommendation, PBAC publishes a public document that summarises the evidence and the reasons for recommending that the drug should be added to the PBS – or not.
In November 2023, PBAC reviewed Novo Nordisk’s submission. It proposed including semaglutide on the PBS for adults with an initial BMI of 40 or above and a diagnosis of at least two weight-related conditions. At least one of these related conditions needed to be obstructive sleep apnoea, osteoarthritis of the knee, or pre-diabetes.
However, PBAC concluded semaglutide should not be subsidised through the PBS because it didn’t consider the drug cost-effective at the price proposed.
PBAC referred to evidence on the long-term benefits from weight loss for people at increased risk of developing heart disease, diabetes or having a stroke. However, it didn’t factor these effects into its calculations when estimating the cost-effectiveness of semaglutide.
The committee suggested a future submission could focus on patients with either pre-existing cardiovascular (heart) disease, type 2 diabetes, or at least two markers of “high cardiometabolic risk”. This could include hypertension (high blood pressure), high cholesterol, chronic kidney disease, fatty liver disease or pre-diabetes.
What did England decide?
The National Institute for Health and Care Excellence (NICE) has a similar role to the PBAC, informing decisions to subsidise medicines in England.
As a result of NICE’s recommendation, semaglutide is subsidised in England for adults with at least one weight-related condition and BMI of 30 or above. Patients must be treated by a specialist weight-management service and prescriptions are for a maximum of two years.
More recently, NICE approved another GLP-1 agonist, tirzepatide, for adults with at least one weight-related condition and a BMI of 35 or above.
This approval didn’t restrict prescriptions to those treated in a specialist weight-management service. However, only 220,000 of the 3.4 million who meet the eligibility criteria will receive tirzepatide in the next three years. It is not clear how the 220,000 patients will be selected.
The limits on tirzepatide will reduce the impact of GLP-1 agonists on the health budget. It is also intended to inform the broader roll-out to all eligible patients.
For both semaglutide and tirzepatide, NICE noted that clinicians should consider stopping the treatment if the patient loses less than 5% of their body weight after six months of use.
Why did they reach such different decisions?
NICE assessed the use of GLP-1 agonists for a broader population than PBAC: people with one weight-related condition and a BMI of 30 or above.
Another difference was that NICE’s cost-effectiveness analysis included estimates of the longer-term benefits of these drugs in reducing the risk of diabetes, cardiovascular (heart) disease, stroke, knee replacement and bariatric surgery.
The proposed prices of the GLP-1 agonists in England and Australia are not reported. We can only observe the estimated health benefits. These are represented as the additional number of “quality-adjusted life years” (QALYs) associated with using the drugs. One QALY is the equivalent of one additional year of life in best imaginable health.
Committees estimate the amount of additional health spending required to gain QALYs, to see if it’s worth the public investment. Looking at the committees’ estimates of weight-loss drugs (without a two-year maximum):
NICE reported a gain of 0.7 QALYs per patient receiving semaglutide for a target population with a BMI of 30 or more
PBAC reported a gain of 0.3 QALYs, but for a population with a BMI of 40 and above.
Part of the explanation for the difference in estimated QALY gains is that PBAC did not consider the reduced risk of future weight-related conditions, only the impact on existing conditions.
In contrast, NICE referred to substantial cost offsets due to reduced weight-related conditions, in particular because some patients would avoid developing diabetes.
Time to rethink PBAC’s focus?
Both NICE and PBAC are clearly concerned about the impact of GLP-1 agonists on the health budget.
PBAC is trying to restrict access to a limited pool of people at highest risk. It is also being more conservative than NICE in estimating the expected benefits of GLP-1 agonists. This would require manufacturers to reduce their price in order for PBAC to consider these drugs cost-effective.
Maybe this approach will work and the Australian government will pay less for these drugs the next time it considers publicly funding them.
However, GLP-1 agonists are not on the agenda for the forthcoming PBAC meetings, so there is no timeline for when GLP-1 agonists might be funded in Australia for weight loss.
Authors: Jonathan Karnon, Professor of Health Economics, Flinders University
