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News & Trends - Pharmaceuticals

The debate over reimbursement for weight loss drugs: Expert insights

Health Industry Hub | May 27, 2024 |

Pharma News: With the rising prevalence of obesity and its associated health risks, the question of whether the Australian government should subsidise weight loss medicines has become increasingly relevant. Experts are divided on the future of affordability and accessibility in this context.

Novo Nordisk’s Ozempic, a lower dose of semaglutide, is approved in Australia for diabetes treatment and is listed on the Pharmaceutical Benefits Schedule (PBS). This listing allows diabetes patients to access a three-week supply for A$31.60 ($7.70 for concession card holders) instead of the full price of A$133.80. Conversely, Wegovy, another form of semaglutide approved for obesity treatment, is not listed on the PBS.

The key question remains: Should the government subsidise Wegovy for obesity treatment?

Associate Professor Priya Sumithran, an endocrinologist and clinician researcher at Monash University, argues for government reimbursement. She emphasised the need to distinguish between the misuse of these medications by celebrities and their legitimate clinical use to improve health.

“Obesity is a complex, chronic disease that can seriously impair health and wellbeing. Several effective, evidence-based medications are approved, and recommended in Australian (and international) guidelines, for obesity management. But, since none are listed on the PBS, only people who can afford to pay hundreds of dollars per month can use them,” said A/Professor Sumithran.

“Making access to these medications more equitable via PBS listing will not be simple,” she acknowledged. “Their high cost is a major barrier because of the large number of people who are eligible to be prescribed them (more than one-third of Australian adults, although not all will want or need medications). Finding a fair, sustainable solution will require prioritisation and compromise from pharmaceutical companies, regulators, prescribers and patients,” she added.

On the other hand, Associate Professor Nial Wheate, MPharm Director at the University of Sydney, opposed reimbursement.

“The biggest factor in whether a drug gets onto the PBS is whether it provides a public good that is bigger than the financial cost,” A/Professor Wheate stated. “That is, the reduction in weight for patients from taking Wegovy results in a significant reduction in other weight-related conditions, such as reducing the chance of heart disease or having a stroke.”

A/Professor Wheate pointed out that Wegovy is not subsidised in the United Kingdom, New Zealand, or Canada.

“In 2022, the Canadian government rejected an application for the subsidy of Wegovy,” he noted. “It concluded that even though patients treated with Wegovy lost body weight, there was no evidence to show this weight-loss translated to a reduced chance of weight-related health conditions such as heart disease or stroke, or conditions such as arthritis or sleep apnoea.”

Professor Jonathan Karnon, Professor of Health Economics at Flinders University, supported reimbursement under specific conditions. He emphasised the importance of obtaining these drugs at a reasonable price.

“A reasonable price reflects opportunity costs, unmet need, equity effects, and budget impact,” Professor Karnon explained. He argued that the opportunity costs, or the health benefits foregone by funding weight-loss drugs instead of other healthcare forms, must be carefully considered.

“To address opportunity costs, we have estimated an additional one year of life in perfect health should be generated for every $28,000 of net spending on a new drug,” he said. “New approaches to managing obesity are clearly needed, a factor that can increase the ‘reasonable price’. Similarly, social determinants of health are strongly associated with inequalities in obesity. And health inequity will increase if the government does not fund weight-loss drugs.”

However, he also noted the significant budget impact, estimating a cost of more than $400 million per year to the Commonwealth government, which would reduce the ‘reasonable price’.

Professor Karnon suggested that once supplies stabilise, the government might benefit from negotiating a total price for access to drugs like Ozempic for weight loss, similar to the deal struck for new hepatitis C medicines.

The debate over government reimbursement for weight loss drugs like Ozempic and Wegovy is complex and multifaceted. It involves weighing the high costs and potential public health benefits, considering equity and accessibility, and addressing significant budget impacts.

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