Mounjaro Reimbursement Deal Falls Apart Over Pricing Concerns

Lilly’s Mounjaro product / Photo = Eli Lilly Korea

Price negotiations for Mounjaro, a diabetes treatment, reportedly broke down despite efforts to apply a flexible pricing contract during the reimbursement listing process. Industry observers say the outcome may have been affected by the drug’s same-brand structure, as Mounjaro is used in both the reimbursed diabetes market and the non-reimbursed obesity market.

According to industry sources on May 12, Eli Lilly Korea recently held negotiations with the National Health Insurance Service to apply a flexible pricing scheme for Mounjaro’s diabetes indication, but the two sides reportedly failed to reach a final agreement.

The flexible pricing contract system allows a drug’s listed price and actual transaction price to differ. The government introduced the system to improve access to innovative new drugs, and medical institutions calculate drug costs based on a separately agreed ceiling price when filing reimbursement claims.

The key issue is that Mounjaro uses the same brand for both diabetes and obesity indications. The drug is currently sold as a non-reimbursed obesity treatment, with market prices formed at around $201.

If Mounjaro enters the reimbursement system as a diabetes treatment, medical claims and patients’ out-of-pocket costs would be calculated based on the separately agreed price. In the wholesale distribution process, transaction prices would also likely be formed around that price, making it difficult to protect pricing in the non-reimbursed obesity market, analysts said.

Mounjaro differs from previous cases such as Saxenda and Victoza, or Ozempic and Wegovy, where separate brands were used for obesity and diabetes indications. In contrast, Mounjaro uses the same ingredient and brand across both markets.

“Even under a flexible pricing contract, actual distribution and claims are based on the separately agreed price, so it would inevitably affect pricing in the non-reimbursed obesity market,” an industry official said. “From Lilly’s perspective, there must have been a major concern between expanding reimbursement for diabetes and maintaining prices in the obesity market.”

Another pharmaceutical industry official said, “I understand that various options were proposed as the negotiations were extended. In the end, the company likely found it difficult to accept the level of the separately agreed price.”