Why Mounjaro Costs More in the US Than Australia
Mounjaro (tirzepatide) is more expensive in the US than Australia primarily due to fundamental differences in pharmaceutical pricing systems: Australia's government-negotiated pricing through the Pharmaceutical Benefits Scheme (PBS) versus the US market-driven pricing model without centralized price negotiation.
Structural Differences in Drug Pricing Systems
Australia's Pharmaceutical Benefits Scheme (PBS)
The Australian government directly negotiates prices with pharmaceutical manufacturers through the PBS, creating downward pressure on medication costs that results in substantially lower prices compared to the US market 1.
Australia conducts periodic pricing reviews for medications, requesting confidential price offers from all market competitors and listing brands at their offered prices, with government subsidies covering up to the lowest-priced brand 2.
This centralized negotiation system has demonstrated effectiveness in reducing medication costs over time—for example, similar high-cost biologics showed annual price decreases of 11-18% in Australia compared to price increases or minimal decreases in the US 1.
US Market-Based Pricing
The US lacks centralized government price negotiation for most medications, allowing pharmaceutical manufacturers to set prices based on market dynamics, resulting in significantly higher costs 3.
Medicare and private insurers negotiate separately with manufacturers, creating fragmented pricing power that favors pharmaceutical companies over payers 3.
The average wholesale price for tirzepatide in the US is approximately $1,228-$1,283 per 30-day supply, with National Average Drug Acquisition Cost (NADAC) of $982-$1,030 4.
Cost-Effectiveness Analysis Context
Cost-effectiveness analyses demonstrate that newer diabetes medications like tirzepatide require substantial price reductions to achieve high value thresholds (<$50,000 per QALY gained), with threshold drug costs generally far lower than current wholesale acquisition costs 3.
The American College of Physicians found that large reductions in newer drug costs are key to improving type 2 diabetes care value, as all estimated costs per QALY gained are very sensitive to relative drug costs 3.
When tirzepatide was compared to other therapies as third-line treatment, cost-effectiveness varied substantially based on drug pricing assumptions, with uncertainty regarding its value compared to SGLT2 inhibitors or GLP-1 agonists 3.
Comparative Pricing Evidence
Research comparing ophthalmic medications showed that Australian prices decreased 11-18% annually while US prices increased or remained stable, demonstrating the impact of different pricing systems on medication costs 1.
Generic medication prices in Australia can sometimes exceed US prices due to lack of price competition in the PBS system, though brand-name medications like tirzepatide typically cost less in Australia 2.
Clinical Implications
The pricing disparity does not reflect differences in clinical efficacy—tirzepatide demonstrates superior weight loss (20.9% at 72 weeks) and glycemic control (HbA1c reduction of 1.87-2.59%) regardless of country 5, 6.
For US patients unable to afford tirzepatide, alternative strategies include switching to less expensive GLP-1 receptor agonists (semaglutide, dulaglutide, liraglutide) or SGLT2 inhibitors, which cost $400-$1,600 per month compared to tirzepatide's $1,200-$1,300 4.
Common Pitfalls
Do not assume that higher US prices reflect superior medication quality or formulation—the same tirzepatide product costs substantially less in Australia due solely to pricing system differences 1.
Avoid overlooking patient assistance programs and manufacturer coupons in the US, which may partially offset the price differential for eligible patients 4.
Do not discontinue tirzepatide abruptly without a transition plan, as sudden discontinuation results in regain of one-half to two-thirds of weight loss within one year 4.