Australia’s Obesity Crisis: $90B Bill & Calls for Ozempic Subsidies
Australia faces a potential $90 billion annual economic burden by 2032 due to obesity, according to a novel report commissioned by Novo Nordisk, the manufacturer of Ozempic and Wegovy. The report, produced jointly by the McKell Institute and the Menzies Research Centre, calls for increased government investment in preventative health measures and a phased subsidy program for GLP-1 drugs like Ozempic.
Currently, obesity costs the nation approximately $39 billion each year, representing two per cent of Australia’s GDP. The projected rise to $90 billion reflects increasing rates of overweight and obesity, with 67 per cent of Australian adults now classified as overweight or obese – a significant increase from 56 per cent in 1995. The report highlights that one in four Australian children are overweight or obese, and a concerning 80 per cent of those children will become obese adults.
The report advocates for a “all of the above” policy response, beginning with targeted subsidies for GLP-1 drugs, prioritizing high-risk groups and disadvantaged populations. These drugs are already covered by the Pharmaceutical Benefits Scheme (PBS) for the treatment of type 2 diabetes, and the federal health minister is reportedly considering expanding access to the medications for broader weight management purposes. Eli Lilly’s Mounjaro overtook Ozempic as Australia’s highest-selling prescription medication in 2023, according to a report from the Sydney Morning Herald, indicating growing demand for weight-loss treatments.
Beyond pharmaceutical interventions, the report stresses the importance of comprehensive support services, including nutrition guidance, exercise programs, and behavioural therapy for individuals eligible for subsidized medications. It also recommends increasing preventative health spending to between three and four per cent of the total health budget, aligning Australia with OECD averages.
The report supports Australia’s recent move towards mandatory health star ratings on food packaging, a measure intended to empower consumers to make informed dietary choices. Novo Nordisk has long focused on the role of gut hormones in regulating appetite, investing over 30 years in research exploring the connection between the gut and the brain, as detailed on the company’s Australian website.
The economic impact of obesity extends beyond direct healthcare costs, with two-thirds of the projected $90 billion burden attributed to lost productivity through days off work and premature mortality. The report also notes that obesity disproportionately affects lower-income groups and those residing in regional and remote areas, exacerbating existing health inequalities.
Novo Nordisk’s share price recently experienced a significant decline after forecasting a 13 per cent decrease in sales this year, attributed to increasing competition in the obesity drug market, as reported by the Sydney Morning Herald. The company’s CEO, Mike Doustdar, acknowledged in a statement that Novo Nordisk will face “pricing headwinds in an increasingly competitive market” in 2026.
Concerns have been raised regarding the marketing practices of pharmaceutical companies like Novo Nordisk and Eli Lilly, with accusations of attempting to “undermine” Australian advertising laws, according to an ABC News report. The companies maintain their campaigns are aimed at raising awareness of obesity as a serious health issue.