47 comment further on the significance of the outcomes given the trial had yet to be published in a peer-reviewed journal.
ausdoc. com. au 18 JULY 2025
47 comment further on the significance of the outcomes given the trial had yet to be published in a peer-reviewed journal.
Perhaps it should have waited. A few days later, it appeared in The New England Journal of Medicine.
Trusting the models
Professor Jonathan Karnon, a health economist at Flinders University in Adelaide, said the main difference between the NICE and the PBAC approaches was that NICE accepted the claim that there would be an impact on conditions related to obesity, such as heart disease, stroke and joint replacements.
“ In Australia, the PBAC did not accept those claims, and so the only benefit considered was the direct benefit on people’ s quality of life of losing weight.”
He said, for the PBAC, the clinical trials were not long enough to show the benefit, and unlike NICE, it did not accept modelling in the absence of those trials to predict the long-term benefits. Was he surprised?“ I guess a little. The approach of extrapolating benefits over a longer time period is common in cost-benefit analysis of medications and other health interventions,” Professor Karnon said.
“ But the PBAC was also concerned about the maintenance of the weight loss. That would be the key uncertainty on the actual long-term benefits of the drugs.
“ However, it is going to take a much longer follow-up of the trials to generate the data that may reassure the PBAC.
“ Tracking the actual impact on cardiovascular disease and joint replacements could take up to 10 years— 10 years to get a significant outcome like that.”
Healthcare lotto
But he stressed that the core problem facing funders of GLPs for obesity does not evaporate even if the evidence showing long-term impact is persuasive.
“ Even if the costs per QALY would come down because the largest benefits are recognised, even if, for instance, the drug company cuts the price, you could still find yourself in a situation where you would not be able to afford to fund it.”
Australian Doctor had a suggestion: what about selecting patients from your targeted cohort by lotto?
Professor Karnon laughs, then adds that the lotto fix for healthcare funding dilemmas is not unknown.
“ In Oregon, in the US, they had a lottery for publicly funded health insurance.
“ They essentially calculated how many people for whom they could afford to provide insurance, and then it was literally a lucky dip.”
This happened back in 2008, when the state opened an additional 10,000 slots in its medical assistance program, known as the Oregon Health Plan.
More than 85,000 people put their names down.
Between March and October, 35,000 people were randomly selected from the list, allowing them to apply for insurance coverage for all members of their household. The NHS did not go that route. With its decision to fund semaglutide two years ago, it limited cost by restricting treatment to two years and demanding that patients be referred to specialist weight-loss clinics, whose limited capacity would severely limit supply.
With Mounjaro, although 3.4 million British patients meet the criteria for free treatment, the government has said it will only fund the treatment for 220,000 people over the next three years. In this case, it is relying on GPs to assess and then prioritise those with the highest clinical needs.
For critics, it is likely to result in another case study proving the inverse care law.
A few weeks ago, the NHS formalised the approach, issuing guidance saying GPs should only prescribe Mounjaro for patients with a BMI of 40kg / m 2 or more with four or more comorbidities in the first year.
In the second year, those with BMIs between 35kg / m 2 and 39.9kg / m 2 will be able to access the drug but, once again, only if they have four or more comorbidities.
And in the third year, patients with a BMI of 40kg / m 2 or more with three or more comorbidities will be eligible.
The value proposition
There are two other options to improve the economic proposition of funding expensive treatments.
The dark one would be to ditch the QALY currency and shift to something like, say, a QAWY— a quality-adjusted working year— where healthcare interventions are measured by the number of active working years they produce in a population.
It is an ethical minefield likely to be socially regressive, underpinned with a form of age-related triage that is usually considered a moral no-no in healthcare. But it would be an approach based on the view held by some that the individual can only justify his or her existence through their apparent economic utility to the nation state.
And that is why it is of interest that the UK Government, given its references to weight-loss drugs helping the jobless, has announced a five-year real-world trial in Greater Manchester, not only looking at whether the drug prevents diabetes and obesity-related complications, but also how it affects the employment status of a patient, as well as the number of sick days they take.
‘ It is brinkmanship around whether the company is going to accept a price.’
Is economics truly the‘ dismal’ science?
Professor Jonathan Karnon.
ECONOMICS often gets a bad name, not least when it comes to healthcare, where a price is literally put on a person’ s life. Yes, the person in theory is an abstraction for the purposes of the calculations. But the results do have real-world impacts on real-world people in terms of who gets treatment and who does not.
A few years before his death, Australian Doctor interviewed Professor John Deeble, one of Australia’ s greatest health economists and architect of Medicare, where we mentioned the constant references to the“ dismal” science.
He pointed out that it was coined by 19th-century intellectual Thomas Carlyle( pictured). The irony was that Carlyle was attempting to disparage economics in his opposition to the abolition of slavery in the West Indies. You can read his argument in his notoriously racist tract Occasional Discourse on the Negro Question.
“ Given the actual source, I’ m not that offended by the description of economics as the dismal science,” Professor Deeble said.
Mounjaro’ s maker, Eli Lilly, is helping to fund the trial as part of a £ 279 million($ 582 million) plan to work with the UK Government to address public health challenges like obesity.
Lower the price?
The other option to deal with the budgetary issues: the drug makers simply lower the cost of their drugs.
When you look through the PBAC assessment of semaglutide( Wegovy), there are a lot of numbers about clinical outcomes and QALYs, but the ones about dollars are often blacked out as commercial-in-confidence.
So we do not know the precise cost per QALY-gained figure. The PBAC documents indicate only that it is between $ 25,000 and $ 45,000.
Professor Karnon said the PBAC assessments are ultimately part of a business negotiation, not simply a cold and rational analysis of a drug’ s value based on the QALY.
“ There is a benefit to these drugs, and the companies know that the health minister wants to fund them for obesity.
“ I think, in most of these cases, it is brinkmanship or negotiation around whether the government or the company is going to accept a price.
“ If it is just about the price, the company will try to negotiate. But then if a price cannot be found, then the company will look for additional evidence, so it might wait until it has got more evidence from the clinical trial to demonstrate the benefit.” The business negotiations go on. Australian Doctor understands that, following the PBAC rejection letter in 2023, Novo Nordisk will be putting together fresh submissions for a PBS listing for Wegovy later this year.
In light of its success in the UK, Australian Doctor has also been told that Eli Lilly will also make a PBAC submission for Mounjaro.
But the clock is ticking for the drug makers. The generics are looming.
Generally, the patents last 20 years in the US, but some of the initial patents for certain formulations of the drugs will begin to run out from the beginning of next year.
Novo Nordisk has already been involved in settling patent litigation with numerous prospective generics by Mylan, Dr Reddy’ s, Apotex and Sun Pharmaceuticals.
“ There is a horizon to all this,” Professor Karnon says.
“ Maybe in 10 years these drugs will become available on a widespread basis.“ Certainly, the price will decline pretty quickly at that point.”