A Current Insight Into the Weight Loss Drug Market

UCL Law for All Society
Oct 31
3 min read

By Emma Wrenn

As obesity rates increase worldwide, sales of weight loss drugs have increased by approximately ten-fold in the last four years. Currently, Novo Nordisk and Eli Lilly are the biggest players in this market. Novo Nordisk’s Wegovy was approved for weight loss by the US Food and Drug Administration (FDA) in 2021, and sold worldwide shortly after. Eli Lilly launched their weight loss drugs Mounjaro and Zepbound in 2022 and 2023. However, legal concerns including global policy changes and patent expirations could change the landscape of the weight loss drug market.

Novo Nordisk’s patent for semaglutide, the active ingredient in their Type II Diabetes drug Ozempic and weight loss drug Wegovy, is set to expire in 2026 in many countries, including Brazil, China, India and Turkey. This would enable other companies to manufacture similar weight loss drugs, increasing the variety of products available for consumers. In China, biotech company Hangzhou Jiuyuan Gene Engineering has already announced their weight loss drug Jiyoutai, containing an active ingredient highly similar to semaglutide. Jiyoutai will likely be available for sale in China following the semaglutide patent expiration.

Novo Nordisk’s patent protecting liraglutide, a compound which acts similarly to semaglutide, has already expired. Since then, Glenmark Pharmaceuticals in Mumbai, India launched their Type II Diabetes medication Lirafit, which cost 70% less than other liraglutide drugs. Through their Production-Linked Incentive scheme, the Indian government aims to increase domestic production of GLP-1 drugs, which includes semaglutide medications. Thus, it is likely that new, cheaper semaglutide drugs will soon become commercially available, as was seen following the liraglutide patent expiration.

Both Eli Lilly and Novo Nordisk saw their stock prices fall after Donald Trump signed the Most Favored Nation executive order, which aims to decrease the prices of medications such as weight loss drugs for American consumers. This could cause large pharmaceutical companies to increase the prices of their drugs sold in Europe, perhaps creating a far more attractive environment for other companies to enter with newer, cheaper products. Both Novo Nordisk and Eli Lilly have reportedly held negotiations with the White House concerning changes to their drug prices, though the outcomes of these discussions are still unknown. Whilst the US is currently the biggest market for weight loss drugs, the widened scope for innovation in other countries after semaglutide patent expirations could increase the weight loss drug market internationally.

Presently, both Novo Nordisk and Eli Lilly have successfully managed to avoid Donald Trump’s tariffs. Although in late September the President threatened a 100% levy on all branded or patented pharmaceutical products, companies which either had production or planned to build production in the US were exempt. This includes Novo Nordisk, whose parent corporation Novo Holdings acquired New Jersey based pharmaceutical company Catalent in December 2024 and Eli Lilly, which plans to build four US manufacturing facilities. Furthermore, Trump’s tariffs on pharmaceutical products have not yet come into effect, despite his proposed date of 1st October.

Despite these unpredictabilities, Eli Lilly’s future in the weight loss drug market looks particularly promising. Eli Lilly plans to submit Orforgilpron, a pill version of their injectable weight loss drugs for FDA approval by the end of 2025. Unusually for oral GLP-1 drugs, clinical trials have found similar weight loss results for patients taking Orforgilpron when compared to injectable semaglutides; a clinical trial funded by Eli Lilly likewise found Orforgilpron to be more effective for weight loss than oral semaglutides. Eli Lilly hopes to make the drug commercially available in the first quarter of 2026. Orforgilpron is easier to administer than an injectable drug, and its production costs are lower. Additionally, patents protecting Orforgilpron will not expire until the 2030s.

Novo Nordisk, on the other hand, has faced several internal challenges recently. Under a new CEO, the company cut around 9000 jobs. Seven members of its board of directors, including the chairman, have stepped down. Though the company achieved some recent success, specifically recent FDA approval of Novo Nordisk’s oral semaglutide drug Rybelsus for the prevention of cardiovascular complications, as well as Type II Diabetes treatment, their head-start in the weight loss drug market may no longer be enough to out compete Eli Lilly.

Sources:

Edited by Artyom Timofeev

Image source: https://www.npr.org/sections/planet-money/2024/07/26/g-s1-13534/ozempic-biggest-side-effect-denmark-pharmastate

A Current Insight Into the Weight Loss Drug Market

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