The United States is moving to discount obesity drugs - should Australia should follow suit?

Obesity is one of the major health challenges of our time. In Australia, around 32 % of adults live with obesity. The Guardian+2RACGP+2 Globally, nations are seeking ways to curb not only the burden of disease (type 2 diabetes, cardiovascular disease, sleep-apnoea, etc.) but also the associated health-system costs. One emerging strategy is the use of pharmacotherapy — especially the new generation of GLP-1 / GIP agonist drugs — as part of a broader public-health response.

In the U.S., we’re seeing moves to discount these medications to improve access. That prompts the question: Should Australia adopt a similar model? Let’s examine the U.S. developments, then consider the Australian context, and finally weigh the pros and cons.

U.S. Developments: What’s Happening?

Discounting and expanded access

• The U.S. government has announced a deal with manufacturers Eli Lilly and Novo Nordisk to reduce costs of certain obesity drugs (GLP-1 receptor agonists) for Medicare/Medicaid and uninsured/under-insured populations. AP News+1

• For example, under the deal: lower prices for uninsured individuals, and coverage expansion for people with obesity or related conditions. People.com+2ABC News+2

• Public opinion: A U.S. survey found that about 80 % of adults believe health insurance should cover prescription weight-loss medications for those diagnosed as overweight or obese. KFF

• Pricing pressures: The sheer scale of demand and public policy attention have begun to drive down list prices or create discount programmes. The Washington Post+1

Framing as public health

The U.S. approach signals a shift: these drugs are not just “lifestyle” aids, but tools in the fight against chronic disease — similar to how blood-pressure or cholesterol medications are considered part of broader cardiovascular risk mitigation. The focus on subsidy/discount for wider populations suggests an intention to treat obesity as a public-health priority.

Australia’s Current Situation

Obesity burden and therapeutic options

• According to the Australian Institute of Health and Welfare (AIHW), obesity is a major contributor to the disease burden and health-system cost in Australia. AIHW+1

• The medications for obesity management exist: for example, older pharmacotherapies (orlistat, liraglutide) are approved. RACGP

• Newer drugs: The drug Wegovy (semaglutide) has been approved in Australia for certain indications, including weight-loss and cardiovascular-risk reduction. Therapeutic Goods Administration (TGA)

• Access and subsidy issues: In Australia, the medications for obesity are not broadly subsidised by the Pharmaceutical Benefits Scheme (PBS) for weight-loss indications, meaning high out-of-pocket costs. The Guardian+1

• Professional bodies calling for action: For instance, the Royal Australian College of General Practitioners (RACGP) has called for PBS subsidies for obesity-management medication. RACGP

Should Australia Follow the U.S. Model?

There are several factors to consider before adopting a similar strategy. I’ll break these into arguments in favour, potential drawbacks / risks, and key design considerations.

Arguments in favour

1. High and growing burden of obesity: With ~⅓ of adults living with obesity and strong links to chronic conditions, reducing weight at population scale offers major health benefits. AIHW+1

2. Cost-effectiveness potential: If weight loss leads to fewer diabetes, fewer cardiovascular events and lower health-care costs, subsidising drugs may pay dividends in reduced long-term burden.

3. Equity: At present, high out-of-pocket cost means only those who can afford it gain access. A subsidy/discount model improves equitable access.

4. Complement existing prevention/treatment: These medications don’t replace lifestyle intervention but can be an adjunct. Australia already has frameworks for combination therapy. The Medical Journal of Australia

5. Global momentum: With major markets (like the U.S.) treating obesity drugs as public-health tools, Australia risks falling behind in access, innovation, and health outcomes.

Potential drawbacks / risks

1. Cost to the health system: Subsidising widely may become very expensive — especially if many people qualify, adherence is long term, and new drugs are high-cost.

2. Over-medicalisation / setting unrealistic expectations: If people expect drugs alone to fix obesity without lifestyle and environment change, the impact may be limited. The drugs are not magic bullets. The Guardian

3. Long-term effectiveness and safety: Though promising, new therapies may have unknown long-term effects and sustainability issues (e.g., weight-regain if drug stopped).

4. Behavioural / environment components: Subsidy alone won’t fix upstream drivers of obesity — food systems, built environments, socioeconomic determinants.

5. Budget opportunity cost: Funds used for subsidy might be diverted from preventive measures (education, environment change, community programs) with broader reach.

Key design considerations if Australia adopts such a policy

• Eligibility criteria: Define who qualifies (BMI thresholds, presence of comorbidities, prior interventions tried). Australia currently uses BMI ≥ 30 or BMI ≥ 27 plus comorbidity for some medications. Healthed

• Subsidy vs full coverage: Should it be fully subsidised, or cost-shared (co-pays) to manage cost and uptake?

• Complementary services: Ensure weight-loss medications are accompanied by lifestyle support (dietitians, exercise programs) to maximise efficacy. The commentary in Australia emphasises this. The Guardian

• Monitoring and evaluation: Track real-world outcomes, budget impact, safety, adherence, weight-maintenance.

• Access equity: Focus on disadvantaged groups, regional/remote populations, Indigenous communities where obesity burden is higher.

• Pharmaceutical pricing negotiation: Government may need to negotiate prices or manage volumes to achieve value for money.

• Integration with prevention strategies: The medications should be one pillar in a broader strategy including environment, moderation of ultra-processed foods, physical activity infrastructure, etc.

My View: Yes — But With Cautious Implementation

In my opinion, Australia should consider subsidising obesity-management medications (or providing strong discounts) as part of the public-health response, but not as a standalone solution. The reason: the evidence and logic both point to significant potential gains, but the risks and costs mean that the policy must be well-designed.

Key points:

• The burden of obesity is large and growing; ignoring the pharmacotherapy option would be a missed opportunity.

• The U.S. move to discount these drugs suggests a reframing from “cosmetic weight-loss” to “chronic-disease management”. Australia should follow that reframing.

• The subsidy must be conditioned on proper patient pathways, lifestyle support, monitoring, and defined eligibility — to avoid wastage, inequity, or perverse uptake.

• Budget impact modelling is essential: how many will qualify? How long will they stay on treatment? What health-system savings might be realised?

• Transparent negotiation with pharma manufacturers will be necessary to ensure value for money.

• Prevention must remain front and centre. The medications help individuals, but unless environment and societal drivers are addressed, we will still see high incidence of obesity.

Conclusion

The U.S. decision to treat obesity drugs as a public-health tool — by expanding access and reducing cost — represents a paradigm shift. Australia is presently somewhat behind in access and subsidy for these medications. Given the high burden of obesity, the potential health gains, and the equity imperative, Australia should follow a similar path. But it must do so thoughtfully — building a framework that ensures the medications are used effectively, safely, equitably, and as part of a broader strategy, rather than as a “quick fix”.