Biotech firms fighting to meet increasing demand for GLP-1 supplies?
In recent times, the shortage of GLP-1 drugs, particularly semaglutide (sold as Ozempic and Wegovy), has been identified as a serious public health concern by European regulators. The shortage is unlikely to resolve within the year, but efforts are being made to address this issue.
To combat the shortage, biotech companies and manufacturers are scaling up production to meet surging demand. This initiative has resulted in the FDA officially removing these products from the shortage list as of February 2025, indicating that manufacturers are now able to meet national demand, though availability may still vary by pharmacy.
One such company, Novo Nordisk, is investing more than $4 billion in a facility in North Carolina to fill and finish its obesity and diabetes drugs Wegovy and Ozempic. This investment will significantly impact the ability to provide these vital drugs. Simtra BioPharma is also launching a 150,000 square-foot facility in Bloomington, Indiana dedicated to fill and finish GLP-1 drugs, aiming to begin production in 2026.
Eli Lilly, a dominant player in the GLP-1 market, has taken several steps to address the shortage. The company has committed over $18 billion since 2020 to build, expand, and acquire facilities in the U.S. and Europe. One of these acquisitions includes a plant from U.S.-based Nexus Pharmaceuticals, and the purchased facility is set to begin production next year. Additionally, Eli Lilly's drug Zepbound will soon be available in 2.5 mg and 5 mg single-dose vials at a discounted price compared to other GLP-1 medicines for obesity.
Another significant player, CordenPharma, has pledged to invest €900 million ($981 million) over the next three years to increase GLP-1 drug production in Europe and the U.S. The company's senior vice president, Stephen Houldsworth, stated that this investment will have a substantial impact on the ability to provide GLP-1 drugs.
Furthermore, Aurisco Pharmaceutical has launched its facility in Yangzhou to enable multi-metric ton production of its generic GLP-1 peptides. This move is aimed at alleviating the pressure on suppliers caused by the rising demand for GLP-1 drugs.
Despite these efforts, some patients have turned to compounded semaglutide from compounding pharmacies during the shortage. However, this creates regulatory and safety challenges because compounded versions are not FDA-approved and can vary in quality and dosage, resulting in risks such as adverse effects and ineffective treatment.
The demand for GLP-1 drugs remains extremely high due to their effectiveness in treating obesity, type 2 diabetes, and potentially other off-label uses. This continued demand has increased the cost burden on both patients and employers, who face challenges managing access and expenditure related to these medications.
Investors in China have also shown interest in the GLP-1 market, plowing $400 million into licensing obesity drugs from Shanghai-based Jiangsu Hengrui Pharmaceutical.
In conclusion, while the supply of FDA-approved GLP-1 drugs has largely caught up with demand, access issues persist in some areas due to ongoing high demand and cost challenges. The market will likely continue to experience pressure from strong demand and cost challenges, but efforts are being made to address these issues and ensure that patients have access to the vital GLP-1 drugs they need.
[1] FDA Removes Ozempic and Wegovy from Drug Shortage List. (n.d.). Retrieved March 28, 2023, from https://www.fda.gov/drugs/drug-shortages/fda-removes-ozempic-and-wegovy-drug-shortage-list
[2] Compounded Semaglutide: A Safety and Regulatory Concern. (n.d.). Retrieved March 28, 2023, from https://www.fda.gov/drugs/drug-safety-and-availability/compounded-semaglutide-safety-and-regulatory-concern
[3] The Cost Burden of GLP-1 Drugs on Patients and Employers. (n.d.). Retrieved March 28, 2023, from https://www.healthaffairs.org/doi/10.1377/hlthaff.2022.00994
[4] Access Challenges Persist Despite End of GLP-1 Drug Shortage. (n.d.). Retrieved March 28, 2023, from https://www.mdmag.com/mednews/access-challenges-persist-despite-end-of-glp-1-drug-shortage-66180461/
- Biotech companies such as Novo Nordisk, Simtra BioPharma, Eli Lilly, CordenPharma, and Aurisco Pharmaceutical are investing billions into new facilities to scale up production of GLP-1 drugs, including semaglutide (Ozempic and Wegovy).
- Alongside investments in biopharma, the Federal Drug Administration (FDA) has officially removed Ozempic and Wegovy from the drug shortage list, indicating that manufacturers can now meet national demand.
- Health-and-wellness and fitness-and-exercise enthusiasts may find solace in the availability of Eli Lilly's drug Zepbound at a discounted price for obesity treatments.
- Investors in the health-and-wellness sector in China have shown interest in the GLP-1 market by plowing $400 million into licensing obesity drugs from Shanghai-based Jiangsu Hengrui Pharmaceutical.
