Novo Nordisk’s obesity drug faces fresh scrutiny as it heads back to the PBAC

The Pharmaceutical Benefits Advisory Committee (PBAC) will once again evaluate Novo Nordisk’s Wegovy (semaglutide), this time for patients with established cardiovascular disease and obesity, at its November 2025 meeting. Public consultation on the application is open until 24 September.

Behind the decision lies a broader funding storm. Around 90% of bariatric surgery occurs in the private system, with public access remaining severely constrained. Private health insurers are now reworking funding models for both bariatric surgery and glucagon-like peptide-1 (GLP-1) receptor agonists, drawing on overseas data and cost modelling.

The insurers’ positions are diverging. Bupa pays benefits for select weight loss medicines subject to eligibility and annual limits. Medibank and Newcastle Industrial Benefits (NIB) cover TGA-approved weight loss drugs under specific plans. By contrast, Hospital Benefit Fund (HBF) has announced it will slash rebates for GLP-1 RAs, warning that rising claims have made current arrangements unsustainable.

Policy pressure is mounting. Mark Butler MP, Minister for Health, Disability and Ageing, wrote to the PBAC Chair in March seeking advice on how best to manage public access to GLP-1 RAs via the Pharmaceutical Benefits Scheme (PBS). His letter pressed the committee on which patient groups are “most likely to benefit,” the “optimal duration of subsidisation” given long-term treatment requirements, and whether the medicines should be used standalone or alongside interventions such as bariatric surgery and structured care models.

The PBAC has already twice rejected Wegovy’s listing for obesity. In March 2022, the committee warned approval would demand an “extremely high investment with very uncertain implications for the PBS and broader health budget”. In November 2023, it concluded the resubmission “did not provide a strong clinical rationale for the proposed PBS population and did not identify patients most likely to experience relatively large reductions in weight or long-term benefits from weight loss”.

The stakes are high. Obesity costs the nation around $12 billion annually, compounded by comorbidities including diabetes and cardiovascular disease. On a private script, GLP-1 RAs currently cost between $4,000 and $5,000 a year – well beyond the reach of many Australians.

The rollout of GLP-1 receptor agonists for obesity could touch nearly one in three Australians. But the challenge lies in ensuring that access is equitable and sustainable, and guided by clinical governance and wraparound services so that patients receive the right therapy at the right time.

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