From "Miracle Drug" to "Red Sea"? Semaglutide's "Patent Wall" Crumbles as Dozens of Enterprises Prepare to "Snatch Food from the Tiger's Mouth" | Industry Observation

How Will the Market Reshape with the Launch of Generic Simaglutide?

Cailian Press, March 23 (Reporter Lu Afeng) On March 20, the patent for core compounds of simaglutide in China expired.

This blockbuster drug, often called the “King of Drugs” 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 supply landscape in China begins to loosen, with generic and biosimilar companies rushing into the market.

“We are the first to file for production and the first to receive acceptance. We are still under review and have not yet obtained approval,” said Jiuyuan Gene (02566.HK) in a call with Cailian Press as an investor; Federal Pharmaceutical (03933.HK) also stated that their product is “waiting for the final review and approval from the national regulatory authority, and capacity can be absolutely assured”; Lizhu Group (000513.SZ) said, “We have already submitted the listing application, and it is still under review. The production line is ready.” An insider from CSPC Pharmaceutical (01093.HK) also revealed that approval is expected in the first half of 2026, and long-acting formulations of simaglutide are being developed simultaneously.

To date, 10 companies’ applications for simaglutide generics/biosimilars have been accepted, with some products entering the “awaiting approval” stage, and they are expected to be launched and sold gradually within the year.

Meanwhile, before these generics/biosimilars are officially launched, terminal prices have already begun to soften, and channel competition has intensified early. Many industry insiders believe that from supply expectations to price system restructuring, the GLP-1 track is entering a window of opportunity triggered by patent expiration.

Multiple Companies Compete for the First Approvals

Globally, simaglutide has become 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 in 2024 have exceeded $25 billion, making it a core revenue source and ranking among the world’s best-selling drugs in 2024, following Ozempic, earning it the title of “Global Drug King.”

In China, due to patent protections, supply has long been dominated by original manufacturers, with relatively stable pricing and channel structures.

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

According to data from the National Medical Products Administration’s Center for Drug Evaluation, companies represented by Huadong Medicine’s Jiuyuan Gene, Lizhu Group, and Federal Pharmaceutical have completed or are nearing the late review stage, approaching the first batch approval window; Qilu Pharmaceutical, Huisheng Biological, CSPC, Chengdu Beite, Fosun Wanbang, China Biopharmaceutical (01177.HK) subsidiary Chia Tai Tianqing, and others are still in the review process; additionally, companies like CR Double-Crane and Han Yu Pharmaceutical are in clinical or registration preparation stages, aiming to catch up during subsequent windows.

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

From corporate statements, “securing the first approvals” has become the current key goal.

Jiuyuan Gene told Cailian Press that “we are the first to file 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 first-mover market advantage during the initial approval window.

Regarding production readiness, Jiuyuan 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,” adding that if approved, “capacity can cover sales for 1 to 2 years after launch.”

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

In terms of competition, more than 10 domestic companies are expected to file for simaglutide. CSPC is in the leading tier, using chemical synthesis technology, and its weight-loss indication is among the first to be filed domestically.

As multiple companies push for approval, the market may gradually develop parallel pathways: biosimilar (biological method) and chemical (generic). Biosimilars are consistent with the original drug, while chemical generics aim to match efficacy through process innovation and may have advantages in impurity control.

Additionally, CSPC’s long-acting simaglutide is also progressing. The company has announced clinical trials for this “monthly formulation,” which could further improve dosing frequency and patient compliance.

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

In contrast, Lizhu Group is still in the approval waiting stage. They told Cailian Press that “the listing application has been submitted and is under review,” with no approval yet, but emphasized that “the production line is complete and capacity is sufficient,” having completed capacity expansion earlier.

This “pre-production, post-approval” strategy reflects companies’ early bets on future volume growth. However, despite 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 the more critical factor is “the increase in potential participants,” not “immediate supply release.”

“Simaglutide 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, while those using fermentation similar to the original drug must follow biosimilar registration procedures, facing higher clinical and review hurdles.

Peptide drugs are much more difficult to industrialize than small molecules. Latitude Health founder Zhao Heng told Cailian Press that the complexity of peptides means they cannot quickly enter full competition after patent expiry like small molecules. “In the short term, only a few companies will lead the volume increase gradually, rather than a full-scale rollout,” he said.

Off-Label Market Shows Signs of “Halving”

Unlike the orderly queue on the supply side, price competition has already begun in earnest.

Cailian Press tracked that over the past six months, the price center in the off-label market for simaglutide has shown clear signs of loosening, with phased and channel-specific price reductions.

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

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

Liu Yuqi explained that current price adjustments are part of “market value redistribution and pattern reshaping,” driven mainly by the gradual erosion of monopoly profits and expectations that generics will penetrate based on cost advantages.

Structurally, this price adjustment shows clear stratification. Simaglutide in China covers both diabetes and weight loss markets. The diabetes indication is included in the insurance reimbursement system, with stable prices constrained by payment policies. The weight-loss indication is not covered by insurance and relies on out-of-pocket payments, making its price more sensitive to supply-demand dynamics and competitive expectations, thus becoming the core area of price reduction.

Wang Heng, General Manager of Beijing Baisi Li Marketing Planning Co., Ltd., said that before patent expiry, original manufacturers actively adjusted prices through promotions to “lock in users and increase patient stickiness,” also influenced by sales rhythm and market competition expectations. “Basically, the market is pre-pricing future competition, not just temporary promotions.”

However, current 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 companies’ generics/biosimilars ramp up, their prices are likely to stay within 70-80% of the original product, rather than rapidly dropping into low-price competition. This suggests that before supply is fully released, the price system will more likely show an “orderly decline” rather than a “chaotic collapse.”

From “Who Can Get Approved” to “Who Can Stay in the Game”

As the first batch of generics/biosimilars approaches market realization within the year, industry focus is shifting from “who can get approval” to “who can achieve scale and stay long-term.”

This shift is driven by the inherent competitive logic of GLP-1 drugs—unlike traditional specialty drugs, they have chronic disease management features combined with the consumer medical demand for weight loss. Once prices become accessible, demand elasticity will be quickly released, raising higher requirements for supply capacity.

Liu Yuqi believes that after the first approvals, the market will not immediately enter full competition but will have a “limited competition window.” This window is due to the limited number of first-approved companies and the pace of market entry.

“Original drugs have established strong physician recognition and patient loyalty. It takes time for new entrants to penetrate hospitals, educate doctors, and build channels, so complete substitution won’t happen overnight,” he said.

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

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

“The future competition will not be about a single factor but about a comprehensive capability system,” Liu emphasized. This system is based on cost but also includes capacity, quality, and compliance.

In terms of capacity, competition for GLP-1 drugs is fundamentally “scale competition.” On one hand, the rapid growth in weight-loss demand means that volume expansion for a single product is much faster than for traditional chronic disease drugs; on the other hand, supply must ensure consistent quality at large scale.

Channel capabilities are also becoming a key variable affecting volume growth efficiency.

Currently, the market structure for GLP-1 products features a “dual-drive” model: hospital channels dominate for diabetes indications, while weight-loss markets rely more on retail pharmacies, DTP channels, and online medical platforms. Different channels have distinct pricing, patient demographics, and promotional models, adding operational complexity for companies.

In this context, the market is beginning to stratify. Zhao Heng predicts that in the short term, the original manufacturer, Novo Nordisk, will continue to dominate, with generics/biosimilars gradually supplementing the market. Original drugs benefit from long-term clinical data, brand recognition, and established channels, maintaining an advantage in the mid-to-high-end market. Generics/biosimilars are more likely to first break through price-sensitive segments.

“Generics and biosimilars will mainly enter the mid-to-low price markets, serving more price-sensitive patients,” Zhao said. A future layered competition structure may emerge, with “original + generics/biosimilars” coexisting.

Regarding price trends, Wang Heng believes that as more companies increase 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.

(Reported by Lu Afeng, Cailian Press)