Countries race to cover obesity drugs as prices fall — Korea lags behind

Major economies are moving aggressively on two fronts — price controls and public coverage — as GLP-1 (glucagon-like peptide-1) obesity and diabetes treatments continue to reshape the global pharmaceutical and biotech landscape.

With the United States and France bringing obesity drugs into their public health insurance systems and Japan cutting prices by 25% to rein in surging costs, calls are growing for South Korea to accelerate its own national health insurance coverage debate — a country where patients still pay the full cost out of pocket.

According to the Korea Biotechnology Industry Organization's Bio-Economy Research Center, the US Centers for Medicare and Medicaid Services will launch a pilot program called "Medicare GLP-1 Bridge" on July 1, offering certain GLP-1 medications to Medicare Part D (outpatient prescription drug) beneficiaries for $50 a month. The US government plans to fold the program into a permanent Medicare framework called the BALANCE Model starting in 2028, after the pilot concludes at the end of 2027.

Europe has also seen a landmark public coverage move. The French government published two administrative decrees in its official gazette on May 28, adding Wegovy and Mounjaro — treatments for obesity and diabetes — to the national health insurance reimbursement list for patients with severe obesity. The measure takes effect June 15, making France the first EU member state to provide insurance coverage for obesity drugs.

France's reimbursement rate is set at 65%. Coverage is limited to patients with a body mass index of 40 kg/m² or above, or those with a BMI of 35 kg/m² or above who have at least one comorbidity such as diabetes, hypertension or sleep apnea — and only if they showed less than 5% weight loss after six months of first-line nutritional treatment. Health authorities estimate between 1 million and 2.1 million people will be eligible.

Prescribing access is tightly controlled. Initial prescriptions may only be issued by physicians at specialized obesity centers, university hospitals or rehabilitation facilities. The nationally negotiated price is approximately 300 euros ($349) per month; after the 65% reimbursement, patients pay roughly 105 euros out of pocket each month. Patients with long-term serious conditions, however, qualify for up to 100% coverage — a category that encompasses the majority of eligible patients. Anticipating higher prescription volumes, the French government estimates the policy could cost more than 100 million euros ($116 million) annually in national health insurance spending and has put safeguards in place to prevent misuse and fiscal strain.

Japan has taken a different approach, wielding aggressive price cuts to protect the sustainability of its public health insurance finances. The Central Social Insurance Medical Council, an advisory body to Japan's Ministry of Health, Labour and Welfare, voted to apply a "sustainability special price adjustment" to Eli Lilly's diabetes and obesity drug Mounjaro (マンジャロ) subcutaneous injection, cutting prices across all dosage strengths starting Aug. 1.

The reduction amounts to 25% across the board. The 2.5 mg formulation will drop from 1,924 yen ($12) to 1,443 yen, while the highest dose — 15 mg — will fall from 11,544 yen to 8,658 yen.

Japanese health authorities moved so swiftly because Mounjaro's annual sales surpassed 100 billion yen (about 950 billion won, or roughly $690 million), far exceeding initial projections and triggering rapid market expansion. Japan operates a system that allows drug prices to be recalculated and reduced up to four times a year even for new drugs listed within the past decade, once annual sales exceed a set threshold. The latest cut is an unavoidable response to protect the long-term viability of the national health insurance system.

While major economies move to control prices or bring obesity drugs under public coverage, South Korea's policy debate has barely advanced. Domestically, obesity treatments remain entirely outside national health insurance coverage — even when prescribed to severely obese patients with urgent medical needs. As a result, patients bear the full cost, which can run to hundreds of thousands of won per month, while the market is plagued by supply shortages and the spread of informal distribution channels.

President Lee Jae-myung directed the Ministry of Health and Welfare to review insurance coverage for obesity drugs during a ministry briefing in December last year, and the ministry has said it will conduct a comprehensive review weighing medical necessity, policy intent and the fiscal impact on national health insurance.

The biggest obstacle remains the financial burden. Under current national health insurance criteria, obesity is still classified as a cosmetic condition — a "non-medical improvement of physical appearance that does not interfere with daily life" — rather than a disease requiring treatment. There are also concerns that extending coverage could rapidly drain an already strained insurance fund. Academics have urged the government to reclassify obesity as a disease and introduce coverage in stages.

By Choi Eun-ji