From "Pharma King" to "Red Sea"? Semaglutide's "Patent Wall" Crumbles, Over a Dozen Enterprises Ready to "Seize the Opportunity"

On March 20th, the core compound patent for Semaglutide in China expired.

This blockbuster drug, often called the “King of Medicine” by the market, has rapidly expanded in recent years due to its dual indications for blood sugar reduction and weight loss, driving the GLP-1 sector to become one of the most closely watched areas in the global pharmaceutical industry. As the patent protection period ends, the domestic supply landscape begins to loosen, with generic and biosimilar companies entering the market in clusters.

“We are the first to report production and the first to receive acceptance. We are still under review and have not yet obtained approval,” a representative from Jiyuan Genetics (02566.HK) told Caixin, speaking as an investor; Federal Pharmaceutical (03933.HK) also stated that their product “is awaiting the final review and approval from the national regulatory authority, and capacity can be absolutely assured”; Livzon Group (000513.SZ) said, “We have already submitted the listing application, which is still under review, and the production line is already built”; an insider from CSPC Pharmaceutical Group (01093.HK) also revealed that approval is expected in the first half of 2026, and long-acting formulations of Semaglutide are being developed simultaneously.

As of now, ten companies have had their applications for generic or biosimilar Semaglutide approved for acceptance, with some products entering the “awaiting approval” stage, and they are expected to gradually launch on the market within the year.

Meanwhile, before the generic/biosimilar versions of Semaglutide are officially launched, terminal prices have already begun to soften, and channel competition has intensified early. According to multiple interviewees, from expectations of increased supply to the restructuring of the price system, the GLP-1 track is entering a reshaping window triggered by patent expiration.

Multiple listed companies compete for the first batch approval

Globally, Semaglutide has rapidly grown into one of the fastest-growing and most commercially valuable innovative drugs in recent years, thanks to its dual indications for blood sugar control and weight loss. According to Novo Nordisk’s financial report, combined sales of related products are expected to exceed $25 billion in 2024, making it an absolute core revenue source for the company and ranking among the world’s best-selling drugs in 2024, following Ozempic as the “Global King of Medicine.”

In the Chinese market, due to patent protection, supply has long been dominated by the original research company, with relatively stable pricing and channel structures.

However, as the core compound patent expires, this “single supply” structure begins to loosen, with domestic companies accelerating their entry. Unlike traditional chemical drugs, the supply release of Semaglutide is not synchronized but shows a clear tiered progression.

According to data from the National Medical Products Administration’s Center for Drug Evaluation, companies represented by Huadong Medicine’s Jiyuan Genetics, Livzon Group, and Federal Pharmaceutical have completed technical review or are in the late review stage, approaching the first batch approval window; Qilu Pharmaceutical, Huisheng Biological, CSPC, Chengdu Betta, Fosun Wanbang, China Biological Pharmaceutical (01177.HK) and others are still in the review process; additionally, companies like China Resources Double-Crane and Han Yu Pharmaceutical are in clinical or registration preparation stages, aiming to catch up in subsequent windows.

This tiered structure is not the result of short-term concentrated applications after patent expiry but the outcome of companies planning years in advance around the patent cycle.

From the companies’ statements, “securing the first batch approval” has become the current core goal.

Jiyuan Genetics told Caixin that “we are the first to report production and the first to receive acceptance,” and that “we are still under review and have not yet obtained approval.” Industry experts believe that this “time advantage” will translate into a market first-mover benefit during the initial approval window.

Regarding production readiness, Jiyuan Genetics further stated, “We already have a production line, and we previously produced liraglutide for Huadong, so the line is usable; only some upgrades are needed.” They added that if approved, “capacity can cover sales for 1 to 2 years after market launch.”

Public information shows that CSPC is accelerating its GLP-1 layout. An insider revealed that their developed Semaglutide injection is expected to be approved in the first half of 2026, leveraging existing capacity systems with full production capabilities from R&D to industrialization.

In terms of competition, over ten domestic companies are expected to submit applications for Semaglutide. CSPC is in the first tier, using chemical synthesis technology, with weight loss as one of the first projects to apply for approval domestically.

As multiple companies push for market entry, the market may gradually develop parallel pathways: biological methods (biosimilars) that are consistent with the original, and chemical methods (generics) that achieve comparable efficacy through process innovation, with certain advantages in impurity control.

Additionally, CSPC’s long-acting Semaglutide is also progressing. Public announcements indicate that the company has initiated related clinical trials. This product, a “monthly formulation,” is among the first in China to reach clinical stage, potentially expanding dosing frequency and adherence benefits.

Federal Pharmaceutical signals industry capacity confidence. Its securities department told Caixin that the product is “waiting for the final review and approval from the national authority,” with some administrative procedures still underway, but emphasized that “capacity can be absolutely assured,” citing their experience in fermenting and large-scale production of insulin and liraglutide.

In contrast, Livzon Group is still in the approval waiting stage. They told Caixin that “we have submitted the listing application, which is still under review,” and have not yet received approval. They also emphasized that “the production line is already built, and capacity is sufficient,” having completed expansion preparations earlier.

This “pre-capacity, post-approval” strategy reflects companies’ early bets on future volume growth. However, despite thorough preparations, actual supply release remains constrained by multiple factors.

Liu Yuqi, Director of CIC Zhaoshi Consulting, said that patent expiry indeed lowers entry barriers, but more importantly, “the number of potential participants is increasing,” rather than “immediate effective supply release.”

“Semaglutide is a complex peptide, and its manufacturing involves process pathway choices. Different pathways can even affect registration classification and clinical requirements,” Liu explained. For example, companies using chemical synthesis can shorten the time to market to some extent; those using fermentation similar to the original research may need to follow biosimilar registration routes, facing higher clinical and review thresholds.

Moreover, peptide drugs are much more difficult to industrialize than traditional small molecules. Zhao Heng, founder of Latitude Health, a healthcare strategy consulting firm, also told Caixin that the complexity of peptide drugs means they cannot quickly enter full competition like small molecules after patent expiry. “In the short term, only a few companies will lead the market, gradually increasing volume, rather than full-scale entry.”

Off-market signals of “halving”

Unlike the orderly queue on the supply side, price competition has already effectively “started.”

Caixin’s ongoing tracking shows that in the past six months, the price center of Semaglutide in the off-market channel has shown clear signs of loosening, with a phased and channel-specific downward trend.

The earliest cracks appeared in online medical and e-commerce channels. Since Q4 last year, major platforms have used subsidies and prescription transfers to test price limits. The terminal transaction price of Semaglutide, which previously traded at a premium close to a thousand yuan, has gradually fallen back to the core range of 500 to 600 yuan. In Q1 this year, as patent expiry approached, some platforms even launched limited-time promotions with prices nearly halving.

Industry experts believe this price shift is essentially an early market reaction to the “patent cliff.”

Liu Yuqi from CIC said that current price adjustments can be understood as a process of “market value redistribution and pattern reshaping,” driven mainly by the gradual disappearance of monopoly profits and market expectations of generic penetration based on cost advantages.

Structurally, this round of price adjustments shows clear layering. Semaglutide in China covers both diabetes and weight loss markets. The diabetes indication is included in the insurance system, with prices constrained by payment policies, remaining relatively stable; the weight loss indication is not covered by insurance, relying mainly on out-of-pocket payments, and its price is more directly affected by supply-demand and competition expectations, making it the core area of price reduction.

Wang Heng, General Manager of Beijing Baisili Marketing Planning, said that before patent expiry, original research companies actively adjusted prices through promotions to “lock in patient groups and increase patient stickiness,” also related to sales rhythm and market competition expectations. “Essentially, the market is pre-pricing future competitive patterns, not just temporary promotions.”

However, current conditions suggest that price reductions still have a “bottom line.”

Zhao Heng predicts that in the next one to two years, the main price of weight-loss drugs will remain above 200 yuan, reflecting both production costs and the fact that competition has not fully unleashed.

Wang Heng also believes that even as more generic and biosimilar Semaglutide products enter the market, their prices are likely to stay within 70-80% of the original product, rather than rapidly dropping into low-price competition. This indicates that before full supply release, the price system is more likely to show an “orderly downward” rather than a “chaotic collapse.”

From “who can get approved” to “who can stay at the table”

As the first batch of generics and biosimilars are about to enter the market within the year, industry focus is shifting from “who can get approval” to “who can truly achieve scaled volume and stay at the table long-term.”

This shift is driven by the inherent competitive logic of GLP-1 drugs—unlike traditional specialty drugs, they combine the chronic nature of long-term disease management with the consumer medical attributes of weight loss. Once prices reach an accessible level, demand elasticity will be rapidly released, demanding higher supply capabilities.

Liu Yuqi believes that after the first batch of generics and biosimilars are launched, the market will not immediately enter full competition but will have a “limited competition window.” This window is due to the limited number of approved companies and the market access pace.

“Original research drugs have established strong physician recognition and patient loyalty, and it takes time for related products to penetrate hospitals, educate doctors, and build channels. Complete substitution cannot happen overnight,” he explained.

However, this “buffer period” will not alter the trend of accelerated competition convergence.

From the industry chain perspective, peptide drugs like Semaglutide are not solely determined by raw material costs but also by process pathways, scale production capacity, and supply chain efficiency. Industry consensus suggests that as scale increases, costs will decline significantly, allowing leading companies to quickly widen the cost gap once they ramp up production.

“Future competition will not be based on a single factor but on a comprehensive capability system,” Liu said. This system is built on cost, but also includes capacity, quality, and compliance capabilities.

In terms of capacity, the competition for GLP-1 drugs is fundamentally a “scale competition.” On one hand, the demand for weight loss is rapidly expanding, with volume growth far exceeding traditional chronic disease drugs; on the other hand, supply must ensure large-scale, stable production while maintaining consistent quality.

At the same time, channel capabilities are becoming a key variable affecting volume expansion efficiency.

Currently, the market structure for GLP-1 products has formed a “hospital + off-site” dual-drive pattern. Diabetes indications mainly rely on hospital channels, while weight loss depends more on retail pharmacies, DTP channels, and online medical platforms. Significant differences in pricing, patient demographics, and promotion models across channels make commercialization more complex.

In this context, the market pattern is beginning to show stratification. Zhao Heng predicts that in the short term, the structure dominated by original research companies like Novo Nordisk, supplemented gradually by generics and biosimilars, will persist. Original research companies, with their long-term clinical data, brand recognition, and channel networks, will maintain advantages in the mid-to-high-end market, while generics and biosimilars are more likely to break through in price-sensitive segments first.

“Generics and biosimilars will mainly enter the mid- and low-price markets, serving price-sensitive patient groups,” Zhao said. Future competition may feature a layered structure of “original research + generics/biosimilars.”

Regarding price evolution, Wang Heng believes that as more companies ramp up capacity and enter the market, price competition will likely accelerate in the medium term, “not remaining mild for long,” though the pace will depend on supply release and channel penetration.

(Article source: Caixin)