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Flat White

Are the new weight loss drugs headed for listing on the PBS?

5 June 2024

2:45 AM

5 June 2024

2:45 AM

Ever since Covid, I’ve avoided making reference to the World Health Organisation (WHO) given how wrong it seemed to be on everything, yet its tentacles are everywhere when you research a public health subject like weight loss.

Two events led me to look into what’s happening with it…

The first involved me observing over some months the dramatic slimming down of a former state premier.

The second was at a recent snooker night playoff. The typical Sydney snooker man is characterised as grey and a bit heavy. An old university mate of mine is the mainstay of the Sydney snooker scene and when I saw him the other week, he told me he could now fit back into his high school trousers.

For both, I learned the secret sauce is the chemical semaglutide, which is the active ingredient in the commercial diabetes drug Ozempic. It successfully suppresses appetite and is now being widely used for weight loss; Elon Musk and Oprah are reportedly on it.

Because of huge world demand, there is a shortage of Ozempic and the other rival drug, Mounjaro. The shortage means the active ingredients in the weight loss drug can be legally produced locally by ‘compounding’ chemists under an exemption to the Therapeutics Goods Act requirement that medicinal drugs have to be approved for domestic use.

The exemption has spawned a mini-industry with an estimated 20,000 Australians now regularly injecting themselves with bespoke weight loss drugs produced by our chemists.

But the whole enterprise is being closed down by the Federal Health Minister, Mark Butler. He’s responding to ‘community concerns’ and some instances of shoddy backyard drug-lab type production, but you also sense he and the medical establishment bodies don’t like losing control and want consumer demand satisfied on their terms.

As such, the Minister has banned compounding a class of substances formally called ‘glucagon-like peptide-1 receptor agonists (GLP-1RA)’. This knocks out Ozempic and Mounjaro copy-cat drugs.

This was a pretty gutsy move by the Minister, banning something important to 20,000 people is politically not trivial. But where it gets ominous is when you consider two things. First, these new drugs appear to be very effective in weight loss. And, second, the potential market for these drugs is enormous.


A standard means of assessing weight is the Body Mass Index (BMI). This is where my reference to WHO comes in because it is the WHO that has defined thresholds for what is considered overweight and obese. By dividing your weight in kilograms with the square of your height (measured in metres), a BMI score is derived.

Here is the calculation for someone I know well: 83kgs divided by 1.83m squared is equal to a BMI of 24.7.

The WHO says if your BMI rating is below 18.5, then you are underweight. Normal weight is a score between 18.5 and less than 25. Overweight is 25 to less than 30. Over 30 is defined as ‘obese’.

In 2022, according to the ABS, 65.8 per cent of Australian adults were overweight or obese. That’s a pretty big chuck on voters.

Only 1.6 per cent of us are underweight; 31.6 per cent are in the healthy range; 34.0 per cent are overweight; 31.7 per cent obese. The prevalence has risen since 2011-12.

A commonly used alternative broad measure of weight as a health risk factor is that of waist circumference. The guidelines for these come from the National Health and Medical Research Council (NHMRC). For Caucasian men, the NHMRC says a waist circumference more than 94cm increases risk of chronic disease. If more than 102cm, there is a ‘substantially’ higher risk. For Caucasian and Asian women, the respective numbers are 80cm and 88cm.

Similar to BMI, the ABS data estimates 67.9 per cent of adults have waist sizes that put them at increased risk of disease, up from 62.9 per cent in 2011–12.

Breaking down the national aggregate figures, you can see some powerful political constituencies recording high waist circumferences.

73.7 per cent of those living in regional and remote Australia have a measured waist exceeding the risk threshold.

68.6 per cent of those defined as most socially disadvantaged record higher health risk waist circumferences, compared to 64.4 per cent for more advantaged groups.

It is surprising given the vast numbers of people struggling with weight, that a more coordinated and cohesive lobby group hasn’t emerged. Probably one constraint has also been relatively ineffective drugs preceding Ozempic.

These factors help explains why it is that pre-Ozempic weight loss drugs are not subsidised on the Pharmaceutical Benefits Scheme (PBS).

While Ozempic is actually on the PBS, it is so because of its use in treating diabetes, not as a weight loss remedy.

A three-week supply of Ozempic retails for $133.80. The PBS subsidy lowers that price to $31.60 and, if you have a concession card, you can get it for $7.70.

The big question is whether the semaglutide, and other weight loss substances in this category, are inevitably going to be listed on the PBS. In my opinion, they should not, but I suspect it is inevitable that they will.

A political flashpoint is likely when another drug known as Wegovy is eventually approved for use in Australia. While its active ingredient is the same as Ozempic, the dosage of semaglutide in it is much higher.

With so many Australians struggling with weight and a step change in the effectiveness of appetite suppressant drugs, it seems inevitable that sheer numbers of voters wanting these drugs will force a PBS subsidy, even though eating too much is essentially an issue of personal responsibility, and not something taxpayers should be on the hook for.

It is just a matter of time. And adding fuel to debate is the old equity flame; can politicians stand by and watch the wealthy, celebrities and well-connect slim down, while everyone else struggles to walk past that chocolate brownie?

My guess is, no they cannot. Even if they should.


Nick Hossack is a public policy consultant. He is former policy director at the Australian Bankers’ Association and former adviser to Prime Minister John Howard.

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