Eli Lilly has refused to list its type 2 diabetes drug tirzepatide (Mounjaro) on the PBS, calling the government’s price offer “unrealistic and unviable” and lower than any comparable healthcare system globally, including China’s.
The decision denied subsidised access to the drug for around 450,000 Australians with type 2 diabetes and raised fresh doubts about a future PBS listing for obesity.
The PBAC had recommended tirzepatide for listing for adults with inadequately controlled type 2 diabetes at its March 2026 meeting, after rejecting three earlier applications in July 2023, November 2024 and July 2025.
But Lilly general manager for Australia and New Zealand, Manny Simons, said the price conditions on offer made listing impossible.
“The price that the Australian Government is willing to pay for Mounjaro is significantly lower than any other reimbursed price globally, including comparable healthcare systems like the UK and countries with lower GDP per capita, such as China,” the company said in a statement.
Lilly also argued the drug’s value had been benchmarked against a 20-year-old medicine no longer available in Australia that requires 14 times as many injections.
Mr Simons said the decision was “independent of global pricing dynamics influenced by the US Administration’s Most-Favoured-Nation policy.”
Lilly warned the outcome had implications beyond type 2 diabetes. “Based on today’s outcome, it is difficult to see how a PBS listing for Mounjaro could be secured for Australians living with obesity or obesity-related disease,” Mr Simons said.
The company also warned that without “wholesale changes to the PBS, Australia will further entrench a two-tier system where medicines access depends on a person’s ability to pay.”
The federal government is currently weighing how to broaden subsidised access to GLP-1 receptor agonists. Late last year, the PBAC advised health minister Mark Butler on five priority groups for access but warned that fast-tracking listings risked locking in higher prices, given the wave of new therapies and generics expected over coming years.
The cost burden of unlisted medications has also attracted scrutiny recently. A McKell Institute report published this month found patients were declining to fill scripts, skipping doses and stretching medications because of cost. Scripts for unlisted obesity management drugs were among the three most common non-PBS script types.
Medicines Australia chief executive Liz de Somer said the Lilly decision highlighted the need for urgent action on implementing recommendations from the Health Technology Assessment review.
“It’s now a time to act, and we’re ready and waiting,” she told ABC News.