How Asian pharmaceutical suppliers make money from copies of Ozempic

Andrew Silver

SHANGHAI (Reuters) – Just over a year ago, New Zealand customs officials began intercepting shipments of injectable drugs branded Fitaro and Orsema, developed by little-known Bangladeshi drugmaker Incepta Pharmaceuticals.

The injection pens, 14 of which were seized at the border, contained semaglutide, a patented substance that helps control blood sugar and appetite and is a key ingredient in Novo Nordisk blockbusters Ozempic and Vegovi, according to New Zealand’s medicines regulator Medsafe. , Reuters review.

Incepta’s drugs are part of an Asian supply chain producing and exporting cheaper copies of Ozempic around the world as global demand for the drug soars, Reuters found.

Ozempic was developed to treat type 2 diabetes, but its active ingredient semaglutide is effective for weight loss. The market for such weight-loss products, which Novo Nordisk is targeting with obesity treatment Wegovy, is projected to reach $150 billion by the early 2030s.

At least 106,000 packages of the semaglutide drug produced in Asia by Incepta were shipped to 12 overseas markets, including countries such as the United States and Britain, where Ozempic is protected by patents, according to a Reuters review.

Incepta did not respond to multiple requests for comment on Fitaro and Orsema, which are approved for sale in Bangladesh, according to publicly available data and information provided by the local regulator. An official from Bangladesh’s General Drug Control Authority, who declined to be named as he was not authorized to speak to the media, said Bangladesh regulators had given Incepta permission to export Fitaro or Orsema, but only on the condition that it gets approval host countries. The injection pens, which are not approved for use in New Zealand, were handed over to Medsafe between August 2023 and May 2024 and destroyed, the regulator said.

Medsafe told Reuters that the batches of Fitaro and Orsema that were destroyed were apparently intended for personal use, but did not comment on whether the drugs posed any health risks.

“Medicines imported from abroad have not been assessed and approved by Medsafe and therefore carry significant risk as there is no guarantee that they have been manufactured to an acceptable level of quality,” the regulator added in response to a Reuters query about the import of semaglutide-based drugs .

Reuters previously reported that semaglutide drugs from Bangladesh were sold on the Indian online trading platform IndiaMART. Recent reports indicate that the international distribution of semaglutide drugs not produced by Novo Nordisk is much wider.

The data reviewed by Reuters came from pharmaceutical regulators in Australia, Brazil, New Zealand and the United States; information from a commercial customs data provider for Kenya, Uzbekistan, Venezuela, Hong Kong and the United Arab Emirates; and records of drug intercepts from the UK, Switzerland and Ireland.

In addition, interviews with an exhibitor, analysis of data from a commercial customs data provider and the Brazilian Ministry of Justice revealed that six little-known companies, four of which are based in Asia, produce semaglutide-based drugs and that their products are shipped abroad.

At least three of these firms imported a key ingredient from China, and at least one of their products was advertised online and in person outside the country of origin, according to a commercial customs data provider, according to an interview with an employee at Chinese supplier Nanjing Hanxin. Pharmaceutical Technology and website and social media app reviewed by Reuters.

These players are taking advantage of global patent exceptions allowed for less developed countries, as well as cases of lax patent enforcement in countries including China, a Reuters review shows.

Novo Nordisk told Reuters it is the only approved manufacturer of semaglutide in the world and cannot vouch for the safety or effectiveness of products claimed to contain semaglutide made by other manufacturers.

Although Novo Nordisk’s semaglutide is protected by international licenses, countries such as Bangladesh and Laos, classified as least developed countries by the United Nations, enjoy exceptions to industry patent rules.

The Danish firm, which has quickly become Europe’s most valuable company with a market capitalization of about $400 billion, says on its website that it does not enforce patents in less developed countries. Given the frantic demand for Ozempic, the financial impact of possible patent infringement on Novo Nordisk is currently limited. “Today, illegal versions of drugs are not cannibalizing Novo’s sales because they are selling every dose they can produce,” said Nicholas Anderson, a portfolio manager and managing director at global asset manager Thornburg Investment Management, which owns Novo Nordisk shares.

However, such copies cause health problems. Drug regulators in at least six countries, including the U.S., U.K. and Ireland, have rejected, destroyed or seized some of Incepta’s semaglutide drugs, according to drug regulator reports and regulatory responses to Reuters queries. In one case, unapproved semaglutide was recalled in South Africa in December due to potential health risks, according to a public notice issued in January by the local drug regulator. The department told Reuters the ingredient was obtained from a supplier in China not authorized to produce the ingredient at Ozempic, without providing further details.

“The semaglutide claimed to be contained in this unauthorized substance may contain unexpected impurities or degradation products that may have unknown effects on patients,” the notice states.

Reuters found no evidence the products would cause any harm to patients, but their proliferation could heighten public health concerns about the sector, which is also threatened by counterfeit Ozempic.

PARALLEL POWER CIRCUIT

A spokesman for Bangladesh’s General Drug Control Authority said Orsema is approved in Bangladesh and is considered safe. Fitaro has also been approved for sale, public records show.

A clinic in the capital Dhaka prescribed Incepta’s Fitaro injection pens to about 20 patients, all foreigners living in Bangladesh, according to a manager who declined to be named or identify the clinic due to the sensitivity surrounding the treatment. “When patients learned that Fitaro was available in Bangladesh at a maximum monthly price of about $60 per month (versus $650 in the US (for Wegovy), they did not seem to think much about who the manufacturer was,” the manager said. In Laos, semaglutide drugs can only be legally produced and distributed for national use, Davone Duangdani, director of the drug and medical device control department at the Lao health ministry, told Reuters. But some Chinese companies are promoting Laotian-made semaglutide tablets in China, where the drug expires. Novo Nordisk’s patent expires in 2026, or sooner if the company loses the lawsuit. At an industry trade show in Shanghai in June attended by Reuters, ingredient maker Nanjing Hanxin Pharmaceutical Technology displayed boxes of Semagcare semaglutide tablets made by Laotian company Boten Elemento Pharma.

Abdou Zogbi, director of business development at Nanjing Hanxin, told Reuters his company supplies semaglutide to the Laotian drugmaker.

“We don’t know which countries Semagcare is selling to, but we are doing a promotion because as soon as they sell more, we sell them more API (active pharmaceutical ingredient),” he told Reuters when asked why the company was showing drug at the exhibition.

Boten Elemento Pharma’s Semagcare tablets have appeared for sale on a Chinese-language website as well as a Chinese social media app, according to a Reuters review. The Chinese company’s sale of semaglutide could amount to an infringement of Novo Nordisk’s Chinese patent, Frank Yang, a senior fellow at intellectual property agency Marks & Clerk, said in response to a Reuters query about possible license violations.

A Novo Nordisk spokeswoman said the company does not produce the ingredient in China.

China’s National Intellectual Property Administration invalidated the Danish drugmaker’s patent in September 2022. However, Novo Nordisk successfully appealed this decision.

Novo Nordisk told Reuters it was now awaiting a court decision on a subsequent appeal.

“We hope to see a continued trend towards supporting and protecting innovation during patent invalidation proceedings,” a Novo Nordisk spokesperson said when asked whether the company is securing its patent in China.

The Chinese medicine regulator, contacted by Reuters by fax, did not respond to questions about quality control at Chinese firms making semaglutide.

A second Chinese firm, Shanghai Longtide Biotechnology, which describes itself as a biotech company, also displayed a box of Semagcare tablets at its stand at a separate exhibition in Shenzhen, which was also attended by Reuters. Reuters contacted Boten Elemento Pharma through its website, but the company did not respond. The company, registered as Shanghai Longtide Biotechnology, did not respond to requests for comment.

Bending boundaries A third Chinese biotech firm, Zhejiang Peptites Biotech, is among Incepta’s semaglutide suppliers, data from a commercial customs data provider showed. The Bangladeshi drugmaker imported at least 892 grams of semaglutide, worth about $805,000, between 2020 and 2024 from mainland China and Hong Kong, according to Reuters calculations based on data from a customs shipping data provider for Zhejiang Peptites Biotech and other suppliers. Zhejiang Peptites Biotech also supplied at least 25.6 kg of semaglutide, worth about $2.8 million, to Russian drugmaker Geropharm in 2023 and 2024, according to Reuters calculations based on data from a customs data provider.

Geropharm can use inventions protected by Russian patents to provide the local population with semaglutide-based drugs without Novo’s consent until the end of December, according to a Russian government decree issued in December 2023.

The Russian company said that supplies of semaglutide by Zhejiang Peptites Biotech are carried out in accordance with the contract and it does not export the finished drug Semavik abroad.

But Semavich was trafficked from Russia to the breakaway Georgian region of Abkhazia several times, information from a commercial customs data provider reviewed by Reuters showed.

Zhejiang Peptites Biotech did not respond to a request for comment on its supplies of semaglutide to Incepta and Geropharm.

Customs data showed that it was not just Chinese firms supplying semaglutide: Incepta imported the ingredient from Swiss generic drug maker Bachem. A Bachem spokesman said the company produces semaglutide for pharmaceutical companies for research and development purposes only and declined to comment on its relationship with Incepta. Drugs regulator Swissmedic told Reuters that Bachem had permission to export semaglutide, but added that Swissmedic “does not control the patents”.

(Reporting by Andrew Silver; Additional reporting by Gleb Stolyarov in Tbilisi, Ruma Paul in Dhaka, Fara Master in Hong Kong, Fabio Teixeira in Rio de Janeiro, Daniela Desantis in Asunción, Rishiki Sadama in New Delhi; Vivian Sekera in Caracas; Editing by Miyoung Kim and Lisa Jucca)