The development of generic versions of peptides such as Semaglutide, the drug substance inside Novo Nordisk’s blockbuster drugs like Ozempic®, Rybelsus® or Wegovy®, or Tirzepatide, the API in Eli Lilly’s Mounjaro®, has emerged as a significant area of interest and opportunity. However, generic companies face critical decisions regarding the choice between recombinant and synthetic semaglutide. The path chosen can significantly impact regulatory approval, safety considerations, and market competitiveness.
The Importance of Generic Competition
GLP-1 agonist drugs were developed to treat Type II Diabetes but became blockbusters after getting approved or prescribed off-label for weight loss. An analysis of electronic health records shared with CNN by Epic Records estimates that around 1.7% of all Americans have been prescribed a semaglutide medication in 2023 alone, reflecting a nearly 40-times increase over the past 5 years. In a Fierce Pharma article published in September 2023, J.P. Morgan’s market projection for GLP-1 drugs was $71 billion by 2032, with Novo and Eli Lilly each accounting for 45% of its sales. Pfizer’s CEO Albert Bourla, Ph.D., estimated that the market could reach $90 billion by 2031.
The demand for semaglutide is growing faster than Novo’s efforts to build up capacity, creating shortages in the supply chain and negatively impacting access to Type II Diabetes patients. As of May 2023, Ozempic® and Wegovy® are both listed on the FDA’s Drug Shortages list. To make it worse, the FDA issued a form 483 after inspecting Novo’s Clayton facility between July 6 and July 13, 2023, flagging manufacturing shortfalls at the Danish drugmaker’s production plant in North Carolina, where Semaglutide API is manufactured for Rybelsus®. In December 2023, the European Medicines Agency issued an announcement on the shortage of Ozempic explaining that “Increased demand for Ozempic coupled with capacity constraints at some of the manufacturing sites have led to shortages. Although the company is taking mitigating measures, the shortage is expected to worsen in December 2023 and continue throughout 2024. It is uncertain when supplies will be sufficient to fully meet current demand.” In January 2024, in the UK, the NHS England and the Department for Health and Social Care issued a National Patient Safety Alert to address supply issues with GLP-1 RA medication, stating that “The global shortage in supply is partly due to a surge in off-label prescriptions of the drug semaglutide being issued for weight loss, which is exceeding supply.”
Seven out of 10 adults and three out of 10 children in the United States are overweight or obese, according to the Centers for Disease Control and Prevention. Total annual medical costs for obese adults are an average of $1,861 higher than medical costs for people with healthy weight. That amount increases to $3,097 for a severely obese adult. By 2035, half of the world’s population – about four billion people – will meet the definitions of being overweight or obese, according to an estimate from the World Obesity Federation. While weight management and sustainable weight loss could drive significant health savings and improved health outcomes, quantifiable results will likely take time.
