Only Ozempic undergoes DREC review for reimb, not Mounjaro

Expected to be reviewed together, but Mounjaro’s reimbursement application was not presented for review at the October DREC meeting

Lilly Korea had shown the will to set a reimb price through pharmacoeconomic evaluation… will the drug’s innovation be recognized

The reimbursement journey for the two diabetes drugs that have recently gained attention as obesity treatments is taking different paths, drawing industry interest.

 

On October 2, the Health Insurance Review and Assessment Service (HIRA)’s Drug Reimbursement Evaluation Committee reviewed Novo Nordisk Korea’s Ozempic (semaglutide) but did not review Eli Lilly Korea’s Mounjaro (tirzepatide)—which had been widely expected to be reviewed simultaneously.

 

Ozempic received a positive evaluation for reimbursement adequacy and passed the committee.

 

The product had already accepted the “setting a price below the assessed value” condition when it first submitted the application in 2023, but the company had withdrawn the application due to supply issues during price negotiations with the National Health Insurance Service.

 

Given that, many predicted its second review would pass smoothly under the same terms.

 

The interesting part is the non-review of Mounjaro.

 

Typically, when multiple drugs of similar classes apply for reimbursement listing for the same indication, the government conducts reimbursement evaluations for the drugs simultaneously to gain leverage in negotiations.

 

This raises questions about the background and implications of this outcome.

 

Since receiving domestic approval in 2023, Lilly has been under negotiations with the Health Insurance Review and Assessment Service (HIRA) for Mounjaro for a considerable period since early 2024.

 

Throughout this process, Lilly has demonstrated confidence that it can prove the cost-effectiveness of Mounjaro by conducting a pharmacoeconomic evaluation based on the efficacy confirmed in the type 2 diabetes field, which was not conducted for Ozempic.

 

Normally, new drugs establish cost-effectiveness through PE analysis and then negotiate prices based on the results.

 

However, in markets like diabetes, where existing drugs have a solid presence and market entry speed is critical, pharmaceutical companies sometimes choose to accept the weighted average price of substitute drugs to hasten the process.

 

But Lilly chose a different path.

 

In the pivotal SURPASS clinical trial, which became the basis for approval, Mounjaro demonstrated statistically superior reductions in HbA1c and body weight compared to all control arms, including semaglutide (1 mg, brand name Ozempic), insulin degludec, and insulin glargine—showing potential for diabetes remission and underlining Lilly’s confidence.

 

Furthermore, at the European Association for the Study of Diabetes (EASD) conference held last September, Lilly presented results from the SURPASS-CVOT Phase III clinical trial, which directly compared its GLP-1 receptor agonist Trulicity.

 

This reinforced the data on cardiovascular prevention effects and overall survival improvement.

 

Based on such circumstances, the Health Insurance Review and Assessment Service's (HIRA) decision to submit only Ozempic to the October Drug Reimbursement Evaluation Committee, rather than both drugs simultaneously, may not necessarily be a negative signal for Mounjaro.

 

For Mounjaro, which has already undergone pharmacoeconomic evaluation, being assessed under different criteria than Ozempic could be advantageous.

 

However, Mounjaro's future is not entirely bright.

 

Korea’s reimbursement framework rarely applies a flexible ICER (Incremental Cost-Effectiveness Ratio) threshold for chronic disease indications, making it difficult for even innovative drugs to gain higher valuation.

 

When Minister Eun Kyeong Jeong, who was appointed as the new Minister of Health and Welfare in the Lee Jae-myung administration last July, agreed to her National Assembly confirmation hearing on the need for policy changes to recognize the innovation of new drugs.

 

She specifically mentioned Trodelvy as the first case of flexibly applying the ICER threshold.

 

It remains to be seen whether the government's policy direction for innovative new drugs and the treatment of new drugs for chronic diseases, such as Mounjaro, will change.

 

A Lilly representative stated, “Mounjaro offers differentiated clinical value compared to existing oral agents, insulins, and GLP-1 receptor agonists.

 

We will continue to collaborate closely with health authorities and stakeholders to ensure that Mounjaro’s innovation can promptly benefit more Korean patients with diabetes.”