Medications primarily intended for the treatment of diabetes have been a big hit in the pharmaceutical market for several years now, after it was discovered that they achieve excellent results in weight loss. The most well-known among them, Ozempic, is so successful that its sales determine whether the Danish economy will grow or fall into crisis. The potential of this drug, or its active substance semaglutide, is much broader and could even treat Parkinson’s disease in the future. The general public is unaware that the patents for these so-called GLP-1 drugs will soon expire. This means that other pharmaceutical companies will soon be able to produce them. A recent analysis by the Boston Consulting Group (BCG) published last autumn showed the opportunities that are opening up for the domestic pharmaceutical industry. On this occasion, we spoke with the principal of BCG’s Zagreb office, Sanya Eduarda Kužet. Originally from Zadar, she obtained her doctorate in molecular biology in France after studying in Zagreb. She has been with BCG for the past six years.
Patents for some obesity treatment drugs will soon expire. Which drugs are those, and is the most well-known, Ozempic, among them?
– Yes, in that group are Ozempic and Mounjaro as the main drugs that hold the entire obesity treatment market, at least so far. They are also direct competitors: Ozempic is produced by Novo Nordisk, while Mounjaro is produced by the American company Eli Lilly. Their patent rights are expected to expire as early as 2026 in Canada, while in the United States and Europe, the patent expiration is expected in 2031.
What will this mean for the global pharmaceutical industry?
– The expiration of patent rights is an extremely important moment, but what is happening in the market at this moment is also important. Every pharmaceutical company wants a piece of that pie because by 2030, the obesity treatment market could be worth around a hundred billion dollars, according to estimates. Everyone wants at least two to three percent of that market, which is why many are preparing to enter that race. If you look at the smaller acquisitions happening in the market, all the major players have started to take positions. Roche has had two important acquisitions in the last two years, and Pfizer won the battle with Novo Nordisk for the acquisition of Metsera worth ten billion dollars. Other major pharmaceutical players are also considering entering that market. Therefore, we expect significant market fragmentation, but the question is whether all these players will get their share. When we talk about the expiration of patent rights, opportunities open up for other companies, such as Teva and other large generic manufacturers. They will certainly want to take a part of that market, which will reduce the prices of these drugs and increase their availability. By 2040, such generics could hold up to 40 percent of the market, which is a very large share, especially if such drugs are taken orally, unlike the current ones that are injected, which is not the most pleasant solution for some patients.
What drives such demand for Ozempic, Mounjaro, and similar drugs?
– There are three key factors influencing the increasing demand for obesity medications. The first is patient interest, who are increasingly obtaining medications through private channels where they are not covered by insurance. This is most often the case in countries where obesity is not recognized as a chronic disease. For example, in Germany, it is still classified as a lifestyle issue. However, the views of health authorities are changing, and at BCG, we expect that therapy coverage will expand to patients with a high body mass index or comorbidities related to obesity by 2030. Recently, we have seen a significant shift in the U.S. and an agreement between the U.S. government and Novo Nordisk and Eli Lilly – they will reduce prices, but in return, they will gain access to a larger number of patients through regulatory changes.
The second key factor is the innovation of the pharmaceutical industry. Already, GLP-1 therapy allows for a weight loss of between 15 and 25 percent, which is close to the results of bariatric surgery, and their effectiveness for an expanding range of conditions and the prevention of chronic diseases is already being researched. The third key factor is the industry’s focus on increasing accessibility, availability, and economies of scale in production, and one of the most important steps in that direction is the imminent arrival of generic versions of GLP-1 drugs. This will pressure manufacturers to deliver high-quality drugs in large quantities, but also put pressure on the entire value chain, from regulatory approvals to production and distribution.
How much is the domestic or regional market for such drugs worth, what do estimates say?
– The question is how aware people are that they can access this medication and, if they are, do they know how many tests need to be done beforehand to be prescribed such a drug for use in treating obesity if they do not suffer from diabetes. There are no reliable data on the value of the domestic market, but it is interesting that Novo Nordisk reported that there is a 40 percent shortage of Ozempic in the German market, even though the produced and marketed quantities should be sufficient according to the number of diabetics. This means that people are taking the medication on their own. Therefore, the question is how many Croatian citizens are using Ozempic and similar drugs without prior medical tests. The Boston Consulting Group conducted an analysis showing that in the U.S., where doctors are generally quite generous in prescribing medications to patients, 15 percent of the entire market is accounted for by off-label drugs. This raises the question of how pharmaceutical products will be used in the future. For example, Botox was initially not used for wrinkles; it is a neurotoxin used as a treatment for certain diseases – today it can be obtained practically at a dentist’s office. Therefore, it is possible that in the future, Ozempic and similar drugs will be used in the beauty industry rather than primarily in medicine. It will be interesting to see how regulations will develop worldwide, although this region will likely lag behind in that.
You mentioned that all pharmacists are trying to grab that piece of the pie. How much can Croatian pharmaceutical companies grab?
– It depends on how willing they are to invest because, let’s be honest, there is currently no capacity in the region to produce such drugs. This is not even similar to antibiotics like Sumamed; we are talking about much more complex medications. The process of producing GLP-1 drugs is much more complex compared to conventional small molecules. We are dealing with synthetic peptides, for which the requirements in synthesis, purification, characterization, and aseptic final filling are much stricter. Regulators have already issued peptide-specific guidelines and expect extensive analytical and comparable packages, which raises both capital requirements and necessary expertise. In short: larger facilities, stricter processes, stronger CMC teams. It is important to emphasize that there is generally a lack of capacity in the global pharmaceutical industry. If Croatian pharmaceutical companies invest in such capabilities, they do not have to develop their own obesity drug; they can produce it as contract manufacturers for other larger global manufacturers. In this context, this could be a scenario for the Slovenian Lek, which is part of the Sandoz group.
