Tirzepatide provides marginally better health outcomes than semaglutide for type 2 diabetes in China but at costs far exceeding the willingness-to-pay threshold, making it not cost-effective from the healthcare system's perspective.
$445,125 per QALY gainedTirzepatide 5 mg costs this much per additional quality-adjusted life year versus semaglutide 1 mg in China — 15 times above the willingness-to-pay threshold of $29,600.
What the researchers found
Tirzepatide 5 mg and 10 mg produced incremental QALYs of 0.05 and 0.09 compared to semaglutide 1 mg. However, the incremental cost-utility ratios were $445,125/QALY and $543,829/QALY respectively — both far exceeding China's willingness-to-pay threshold of $29,600/QALY. Adding tirzepatide to the national health insurance would cost an additional $80-490 million over 5 years, but overall healthcare expenditures could decrease due to reduced out-of-pocket costs for patients.
Why it matters
As GLP-1-based therapies become the standard of care for type 2 diabetes globally, understanding their cost-effectiveness in different healthcare systems is critical for drug formulary decisions. This study shows that even when a newer peptide drug offers clinical advantages, the price premium may not justify the incremental benefit — an important consideration for the world's largest diabetes population.
How the study worked
Cost-utility analysis using clinical efficacy data from the SURPASS-2 trial and the UK Prospective Diabetes Study Outcomes Model Version 2.2. The analysis took the perspective of Chinese healthcare providers, incorporating direct medical costs and quality-adjusted life years over a long-term simulation horizon. Sensitivity analyses tested the robustness of findings. A separate budget impact analysis estimated 5-year financial consequences for China's national health insurance system.
What this study cannot tell us
The model relies on clinical data from the SURPASS-2 trial, which may not perfectly represent real-world Chinese patient populations. The UKPDS Outcomes Model was developed from Western populations and may not fully capture disease progression patterns in Chinese patients. Drug prices in China are subject to negotiation and may change significantly. The analysis uses a healthcare provider perspective and may undervalue broader societal benefits. Long-term simulation introduces compounding uncertainty.
How to read the evidence
This is a model-based pharmacoeconomic analysis using clinical trial data (SURPASS-2) and an established outcomes model (UKPDS v2.2). While the methodology is standard for health technology assessment, all models involve assumptions and the results are only as reliable as the input data and model structure.
When this study was published
Published in 2025, this analysis uses current pricing and the latest clinical data to inform timely policy decisions about tirzepatide coverage in China's health insurance system.
The bigger picture
The global market for GLP-1 and dual-agonist peptide drugs is growing rapidly, but affordability and access remain major challenges — particularly in middle-income countries with large diabetes burdens. This type of pharmacoeconomic analysis will increasingly shape which peptide therapies become widely available and to whom, as healthcare systems worldwide grapple with the costs of these transformative but expensive medications.
Questions still open
- At what price point would tirzepatide become cost-effective compared to semaglutide in the Chinese healthcare system?
- How would the cost-effectiveness calculation change if tirzepatide's cardiovascular and weight loss benefits were more fully captured in the model?
- Will price reductions through national insurance negotiations make tirzepatide cost-effective in China in the near future?
Common questions
Is tirzepatide worth the extra cost over semaglutide for diabetes?
Could tirzepatide still reduce overall healthcare costs?
Read the original research
The cost-utility and budget impact analyses of Tirzepatide versus once-weekly Semaglutide as add-on therapy to metformin in patients with type 2 diabetes mellitus in China.
Diabetes, obesity & metabolism, 27(9), 5269-5279
Citation
Wang, Sihua; Fan, Duncong; Yao, Qinhong; Sun, Xiaojie. (2025). The cost-utility and budget impact analyses of Tirzepatide versus once-weekly Semaglutide as add-on therapy to metformin in patients with type 2 diabetes mellitus in China.. Diabetes, obesity & metabolism, 27(9), 5269-5279. https://doi.org/10.1111/dom.16580