Sept 7 (Reuters) - Eli Lilly's drug Mounjaro has won the backing of Britain's drug cost-effectiveness watchdog as a diabetes treatment, Bloomberg News reported on Thursday.

Mounjaro is expected to become a blockbuster treatment if it is also approved to treat obesity and a U.S. decision on its use for weight loss is expected later this year.

Bloomberg News quoted Helen Knight, director of medicines evaluation at the National Institute for Health and Care Excellence (NICE) as saying that Mounjaro has the potential to "provide an effective and good value treatment option" for people with type 2 diabetes that isn't well controlled by other drugs.

NICE and Lilly did not immediately respond to a Reuters request for comment.

Earlier in July, NICE did not recommend Mounjaro, also known as tirzepatide, saying more evidence was needed before it could be used by the National Health Service. NICE asked Lilly for more data on whether the drug resulted in better weight loss than other drugs belonging to the same class of treatments. (Reporting by Lavanya Ahire in Bengaluru; Editing by Edwina Gibbs)