China has 60 drugs under trial to rival Ozempic in US$150 billion weight-loss market
Over 60 novel drug candidates are in late-stage clinical trials in China, and these will potentially compete directly with US drugmakers
When Hong Kong office worker W.K. Chang began putting on weight as a teenager, her doctor said it was due to hormonal imbalances that slowed her metabolism. She reached a peak weight of 100kg about a year ago, but has since lost 25kg.
The secret to losing a quarter of her weight? Chang, who asked not to be identified by her full name, was one of the city’s first 200 chronic obesity patients to receive access to a new weight-loss drug, originally developed for diabetes. At a cost of HK$2,700 (US$344) each month, it was not cheap.
“I’m lucky since my family pays for my drug bills, but my friends who want it can’t afford it,” she said. “My doctor said I can reduce the dosage and the costs provided I keep up with my low-sugar diet and do cardiovascular exercises to maintain my weight.”
Chang’s friends and others with similar health problems may soon have better and more affordable access to the drugs that treat both diabetes and obesity, analysts said.
That is because the patent on semaglutide – the drug that mimics the naturally-produced hormone glucagon-like peptide-1 (GLP-1) that regulates blood sugar, appetite and digestion – expires in China next year. In other markets, the patent will expire in 2031 or 2032. Semaglutide is sold by Novo Nordisk as Ozempic.
Analysts said cheaper generic versions of the drug could then be launched by rivals, bringing down prices. Up to 20 generic drug players in China will vie for market share and exert downward pressure on prices, according to a report published in May by Boston-based L.E.K. Consulting.
In addition, over 60 novel GLP-1 drug candidates were undergoing late-stage clinical trials in China, and these would potentially compete directly with semaglutide and rival product tirzepatide developed by US-based Eli Lilly, the report added. The two products dominate the global weight-loss drug market.
In April, Beijing launched a nationwide weight-management campaign to address what it said was “a major public health threat”.
According to a study commissioned by the National Health Commission, some 34.3 per cent of adults were overweight, while another 16.4 per cent were obese in 2018 – up from 22.8 per cent and 7.1 per cent in 2002, respectively.
Just over 70 per cent of the population would be overweight or obese by 2030, and if the problem was not addressed effectively, it would consume 22 per cent of the nation’s total healthcare budget, according to the commission.
The US Food and Drug Administration approved semaglutide for type 2 diabetes in 2017 and extended approval for obesity and related diseases in 2021.
Pharmaceutical firms jumped in, encouraged by an untapped market unhindered by high prices, and the proven efficacy of GLP-1 drugs that could reduce a patient’s weight by 12 to 20 per cent within 50 weeks, while claiming a relatively safe profile with the most common side effects limited to gastrointestinal discomfort, said Chen Ziyi, head of Asia healthcare research at Goldman Sachs.
Semaglutide was the world’s second bestselling drug last year, generating US$20.8 billion in sales from two formulations for diabetes and US$8.4 billion from a formulation for chronic weight management, after Merck’s cancer drug Keytruda that raked in US$29.5 billion, according to the pharmaceutical publication Drug Discovery & Development.
Eli Lilly’s tirzepatide recorded sales of US$11.5 billion from diabetes prescriptions and US$4.9 billion from weight loss use.
“GLP-1 obesity drugs will help drive record overall prescription drug sales growth and catapult Novo Nordisk and Eli Lilly to the top of the company rankings by the end of the decade,” London-based consultancy Evaluate wrote in a report a year ago.
Eli Lilly and Novo Nordisk were No 9 and No 11, respectively, in terms of global pharmaceutical revenues last year, according to Drug Discovery & Development.
Industry estimates for the global anti-obesity drugs market range from US$100 billion to US$150 billion by 2035. Sales last year were around US$30 billion, according to US healthcare data provider IQVIA.
In comparison, the global PD-1/PD-L1 immunotherapies market – the biggest oncology drugs category by sales – is projected to grow 11.9 per cent annually to reach US$110 billion by 2031, up from US$50 billion last year, according to research firm iHealthcareAnalyst.
“Even the largest category of oncology drugs may be smaller than anti-obesity medications in terms of sales potential, mainly because the prevalence of obesity is much higher than that of other chronic diseases,” Goldman Sachs’ Chen said.
In mainland China, semaglutide was approved for diabetes in 2021 and as an anti-obesity medication last year, while tirzepatide was given the marketing greenlight for both uses last year.
China’s weight loss drugs market could grow to 40 billion yuan (US$5.6 billion) in 2035 from a low base, according to Chen. Sales are primarily driven by Novo Nordisk, which reported US$285 million in GLP-1 drug sales for diabetes in China in the first quarter, and US$11 million in sales for weight loss applications.
Chen said his projection accounted for “hard core” medical demand from obese patients who tend to have other health issues like cardiovascular and kidney diseases, and need longer-term usage of the drugs, as well as demand from overweight users who may need it for only three to four months.
“Weight loss drug demand will depend on the duration of usage, their pricing and companies’ marketing strategies,” Chen said. “Even at 40 billion yuan, the market is big enough to attract many domestic and international firms to invest in its research and development.”
New entrants with novel products would compete with the incumbents on the depth, speed and permanence of weight loss achievable, as well as price and usage convenience, he noted. The ability to claim less severe side effects, such as nausea and muscle loss, would also give newcomers an advantage.
Five Chinese firms have applied for marketing approval for generic versions of semaglutide, according to Goldman Sachs.
On June 27, eastern Jiangsu province-based Innovent Biologics said it received Chinese regulatory approval for mazdutide, which it claimed was the world’s first to mimic the natural hormones of GLP-1 and glucagon, the latter of which plays a crucial role in regulating blood glucose levels.
Listed in Hong Kong, Innovent licensed the China development and marketing rights for mazdutide from Eli Lilly in 2019. It has also applied for approval to use the drug for treating diabetes in China.
Using the once-weekly injected drug, some 610 overweight or obese participants in its clinical trial achieved an average weight loss of 14.8 per cent by week 48, and an 80 per cent reduction in liver fat content, Innovent said.
In January, industry media Fierce Pharma ranked mazdutide No 7 out of the top 10 most anticipated drugs to be launched this year, with projected sales of US$1.3 billion in 2030.
Innovent – which did not respond to queries about its market launch date, sales channels and pricing – could generate over 600 million yuan of revenue from mazdutide this year and reach peak sales of 3.5 billion yuan in 2029, according to a July 1 report by Zheng Yurou, an equity analyst at investment research firm Morningstar.
However, the future remains uncertain, according to Chen of Goldman Sachs. “No one has a crystal ball to see what the landscape will be like in 2027,” he said. “It is too complicated, given this will also be the first time a major blockbuster not covered by the Chinese government’s national health insurance drug reimbursement scheme faces the onslaught of generics.”
Sales channels and pricing tactics would determine the growth of various market segments, which would include demand from moderately overweight people who might use the drugs on an “off-label” basis, Chen noted. This refers to usage and prescriptions for conditions and in dosages not yet approved by drug regulators.
“It is going to be a hybrid market with decent percentages of sales from each of the accessible channels – hospitals, retail outlets, online channels,” Chen said. “Besides medical demand, you also have people who will use it for two months to fit into a tight dress for a wedding.”
The current retail prices of GLP-1 drugs in China range from 2,700 yuan to 4,800 yuan per month, but could be lower for off-label use, much lower than in the US, he noted.
Many users were likely to pivot to cheaper options if the efficacy profiles were similar or slightly less superior, as long as they were within a few percentage points, said Morningstar’s Zheng, adding that the longer-term race lies in next-generation products, especially orally administered ones.
Nomura’s head of China healthcare research, Zhang Jialin, expected price competition to intensify from 2027, adding that Innovent would likely invest in the development of non-traditional sales channels of retail and online pharmacies where the incumbents had yet to establish a strong presence.
While GLP-1 drugs could effectively signal to the brain to eat less and slow down the pace at which food was digested, they needed to be taken as an adjunct to a healthy diet and exercise, said Francis Chow Chun-chung, founding president of the Hong Kong Association for the Study of Obesity.
Chang, the Hong Kong office worker, took that advice. “My weight loss was more pronounced than many others on the drug since I heeded my doctor’s advice to supplement the weekly injection with moderate exercise,” she said.
“I had a bit of a rebirth moment after the treatment. I gained confidence in myself and now have more choices when shopping for clothes,” she added.