Price cut by 70%! The "weight loss miracle drug" patent in Canada will expire next year, and generic drug giants are "eyeing" it, planning significant price reductions

The patent for the "weight loss miracle drug" semaglutide will expire in Canada next year. Generic drug giant Sandoz has sensed a huge business opportunity and plans to launch a generic version of the weight loss drug, which may be priced 70% lower than the original version. This move could reshape the landscape of the North American weight loss drug market.

The company's CEO Richard Saynor stated, "Although the final pricing for our generic semaglutide weight loss and diabetes drug has not yet been determined, it is expected to be reduced by 60% to 70% compared to the original drug, which will significantly lower treatment costs."

This initiative will not only expand accessibility in the Canadian market but may also trigger huge demand from the United States. The official price of similar drugs in the U.S. can reach up to $1,000 per month, far exceeding prices in Canada. Despite restrictions on cross-border drug purchases, American consumers have already been buying certain prescription drugs from Canada to seek price advantages.

Generic drugs will bring significant price advantages

Sandoz is one of the largest generic drug manufacturers in the world. Although its generic weight loss drug has not yet been approved, the application process has already begun. The patent for semaglutide will expire in Canada in January next year, clearing legal obstacles for the market entry of generic drugs.

"As more (generic versions) enter the market, prices may further decline," Sandoz told the media. "If sold at $40 or $50 per month, the market size could expand two to three times in terms of the number of patients."

Currently, Novo Nordisk's flagship products semaglutide Ozempic and Wegovy, as well as Eli Lilly's Mounjaro and Zepbound (with the active ingredient tirzepatide), have official prices in Canada ranging from CAD 200 to 400 per month.

Demand for cross-border drug purchases by American consumers may surge

Analysts believe that the significant drop in Canadian generic drug prices may trigger strong demand from American consumers.

Currently, the list price for brand-name weight loss and diabetes drugs in the U.S. is about $1,000 per month, and even if patients buy directly from the pharmaceutical companies, the price is around $500, which is much higher than the Canadian market.

Although there are regulations in the U.S. preventing this practice, Americans have already been purchasing some prescription drugs from Canada. Additionally, the U.S. Food and Drug Administration has allowed Florida to import certain drugs from Canada, and other states have applied for similar permissions.

The Canadian Pharmacists Association stated that with the surge in demand for Ozempic in 2023, up to 15% of prescriptions in British Columbia were distributed to Americans.

"While we hope that generic drugs can help improve the affordability and accessibility of diabetes and obesity management for Canadians, we also need to be prepared—taking appropriate monitoring and safeguarding measures—to prevent pressure on our drug supply and potential access issues," said Joelle Walker, Vice President of Public and Professional Affairs at the association.

Regulatory and intellectual property barriers still exist

The Canadian Ministry of Health stated that there are regulations preventing companies from exporting drugs from the domestic market if such exports would lead to or exacerbate drug shortages. The department added that it will monitor the supply of weight loss and diabetes drugs and take action if necessary Novo Nordisk stated that the company is "well-equipped" to respond to market changes following the expiration of patents in Canada. The company added that U.S. regulations mean that the import of generic semaglutide is not allowed until it is approved in the United States. The patent for semaglutide in the U.S. will not expire until 2032.

"We are working closely with all levels of government to ensure that Canadians can access and use our medicines, while restricting the sale of our medicines to non-Canadian residents," Novo Nordisk stated