In a speech to the AFR Healthcare Summit, Mark Butler signalled a ‘slow and managed rollout’ to manage equity concerns.
Federal health minister Mark Butler has signalled he favours a cautious, but ultimately open pathway to subsidising the blockbuster GLP-1 obesity drugs on the Pharmaceutical Benefits Scheme.
Speaking at the Australian Financial ReviewHealthcare Summit this morning, Mr Butler framed GLP-1s as both a transformative health intervention and a major fiscal risk that would require a tightly managed rollout on the PBS.
Mr Butler made it clear the government sees drugs such as Ozempic, Wegovy and Mounjaro as potentially “reshaping” Australia’s approach to chronic disease – but stopped short of committing to broad PBS access in the near term.
Instead, he outlined a strategy built on incremental access, strict targeted prioritisation of high-need cohorts and further evidence gathering, suggesting policymakers are still assessing how to reconcile the drugs’ clinical promise with their potentially enormous budget impact.
“The PBS was built on the principle of equitable access,” Mr Butler said, adding that new therapies like GLP-1s must be introduced in a way that “strengthens the PBS rather than overwhelms it”.
Walk before we run
Mr Butler made it clear that he prefers to use the existing PBS listing process — via the Pharmaceutical Benefits Advisory Committee — rather than fast-tracking a bespoke funding model for GLP-1s.
A current PBAC recommendation for Wegovy, targeting patients with a body mass index over 35 and established cardiovascular disease, is already under consideration. That signals the likely starting point for further access decisions: narrow, high-risk populations rather than broad obesity coverage.
“We’re still really trying to see the first listing … let’s walk before we run,” Mr Butler said today.
He also acknowledged that stakeholders – including the PBAC itself – have raised concerns the traditional framework may not be sufficient for drugs of this scale and complexity. If that proves the case, the government is leaving the door open to alternative funding models.
Massive demand, massive cost
Underlying the government’s caution is the sheer scale of potential demand.
Mr Butler pointed to modelling suggesting GLP-1 uptake could eventually mirror that for statins, used by around 2.5 million Australians.
At current patented prices, for GLP-1s that would translate into a multibillion-dollar annual cost.
“It is a lot of money,” Butler acknowledged.
At the same time, he framed GLP-1s as an economic investment rather than just a cost. Obesity is estimated to cost Australia around $40 billion annually – roughly 2% of GDP – and could reach $250 billion by 2060 without intervention.
GLP-1 therapies, Mr Butler argued, have the potential to reduce that burden by improving long-term health outcomes, workforce participation and productivity.
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Evidence still missing
Mr Butler repeatedly emphasised the lack of real-world evidence on long-term cost savings – particularly in the Australian context.
He pointed to the UK’s £40 million NHS pilot, which is testing whether prescribing semaglutide to high-risk patients reduces surgeries and waiting lists.
“That could provide exactly the kind of real-world evidence that is currently not available in Australia,” he said.
Broader PBS access may depend not just on clinical effectiveness – already well established – but on demonstrated system-wide savings.
Equity as a central concern
Mr Butler told the AFR room that obesity rates are significantly higher in lower socioeconomic communities, yet patients in those areas are less likely to receive GLP-1 prescriptions, saying that was a key policy challenge.
PBAC advice emphasises that high-need groups should be prioritised in any rollout.
Importantly, he also ruled out tying PBS access to mandatory lifestyle programs such as diet and exercise, warning this would create barriers and worsen inequity.
Managed rollout likely
Mr Butler said the PBAC had advised him that “one rollout – a slow and managed rollout” model that would limit early access to clearly defined patient groups while the government gathers more data on long-term outcomes, safety and system impacts, was the best bet.
Such an approach would also help manage supply constraints, which remain a global issue, and reduce the risk of widespread off-label use.
Mr Butler’s message was clear: GLP-1 drugs will come to the PBS – but not quickly, and not for everyone.
Other news
Over the weekend Mr Butler announced the expansion of access to immunotherapy treatment pembrolizumab (Keytruda) for three new indications:
- High-risk, locally advanced cervical cancer, which has spread beyond the cervix, but not to the distant organs. Over 950 Australian women in 2021 were diagnosed with cervical cancer.
- Renal cell carcinoma in patients at intermediate-high or high risk of recurrence following surgery. Even after surgery, some patients face a high risk of the cancer returning or spreading. Renal cell carcinoma is the most common type of kidney cancer with over 3,900 diagnosed in 2021.
- Locally advanced head and neck squamous cell carcinoma (LA-HNSCC) affecting more than 2,100 patients in 2021. The advanced form of carcinoma encompasses a range of malignancies, including in the oral cavity, larynx, oropharynx, and hypopharynx.
It is expected that more than 10,000 patients could benefit from this listing. Without the PBS subsidy, patients could pay more than $15,400 per script.
The expanded PBS listing means eligible patients will pay a maximum of $25 per script, or just $7.70 with a concession card.
