*

Regulators have approved copies in Laos, Bangladesh,

Russia and

Paraguay

*

Proliferation of copies could lower prices in key markets,

erode

market share

*

At least seven new products containing Novo's semaglutide

approved this year

By Andrew Silver

SHANGHAI, Dec 20 (Reuters) - As Novo Nordisk and Eli

Lilly ( LLY ) expand sales of their popular diabetes and weight-loss

drugs, cheaper copies of their patented remedies are winning

approval from some regulators overseas, posing a threat to the

pharma giants' prices and market share.

Since Novo's blockbuster Ozempic diabetes treatment

was approved in the United States in 2017, regulators have

greenlighted 22 medicines containing its main ingredient in

Bangladesh, Laos, Russia and Paraguay as well as seven copies of

Lilly's rival drugs in Bangladesh, according to a

Reuters review.

Ozempic's patented semaglutide ingredient is also used in Novo's

wildly popular obesity treatment Wegovy and diabetes tablets

Rybelsus, while Lilly's tirzepatide is used in Mounjaro and

Zepbound.

This year, at least seven new products containing semaglutide

have been approved for sale in Laos and Russia, according to

public lists of licenced drugs, comments from a regulatory

official, details of two approved medicines in Paraguay obtained

via a freedom of information request, and information on the

websites of two drug manufacturers.

Asked for efficacy data on the licenced analogue versions,

regulators in Bangladesh, Paraguay and Russia did not respond.

Davone Duangdany, director of the drug and medical device

control division within the Laos health ministry, told Reuters

that such information was confidential.

Regulators in Bangladesh, Laos and Russia did not

immediately respond to Reuters' requests for comments on the

rigor of their systems to approve, develop, manufacture and

distribute drugs.

"What I can tell you on behalf of the institution is that

the highest and most demanding standards have been taken into

account for (the two Paraguay medicines) approval, as we would

do for any other product," Jorge Lliou, head of Paraguay's

National Directorate of Health Surveillance, told Reuters in

response to a query about the origin of the active ingredient in

the locally approved drugs.

The growing number of licenced copies could depress prices for

anti-obesity medicines and risk a spillover effect into

important markets such as India, where Novo's Rybelsus has

already been launched, three pharma experts said.

Anna Kemp-Casey, a medical policy specialist at the

University of South Australia, said prices for Novo's and

Lilly's weight-loss drugs would initially remain supported as

strong demand currently far outstrips supplies.

But "in the longer term it is likely that all this

competition will put downward price pressure" on Lilly and Novo

in India and other countries, she added.

Both drugmakers are racing to increase manufacturing capacity to

meet unprecedented demand. More than a billion people globally

are considered obese, a condition linked to various significant

health complications. BMO Capital Markets has estimated annual

weight-loss drug sales reaching $150 billion by 2033.

The proliferation of copies could ultimately undermine

revenue for Lilly and Novo, whose shares have soared on robust

demand for new weight-loss tablets and injector pens containing

substances that mimic the activity of a hormone that slows

digestion and helps people feel full for longer.

The Reuters review focused on countries where there is no

Novo patent on semaglutide, that enjoy patent exemptions from

World Trade Organisation (WTO) rules due to their status of

developing economies, or where, like in Russia, there are local

decrees that override such international regulations.

"The approval of generics by less-stringent regulatory

agencies provides a legal framework for local manufacturers to

produce these drugs for both domestic use and export," said

Enrique Seoane-Vazquez, a pharmaceutical policy specialist at

Chapman University in California.

Ozempic, which was developed to fight diabetes but reached

global popularity thanks to its weight-loss side effect, has

become a significant revenue driver for Novo, with sales

reaching 95.7 billion Danish crowns ($13.5 billion) in 2023.

Sales of Lilly's Mounjaro reached $5.1 billion last year.

Asked about the copies identified by Reuters, Eli Lilly ( LLY )

said tirzepatide was a complex macromolecule that required

rigorous testing.

"Any policies for approval of biosimilar products...present

significant patient safety concerns. Regulators should proceed

carefully, with patient safety at the forefront," Lilly said in

a written statement.

Approached by Reuters, a spokeswoman for Novo declined to

comment on potential risks of price competition from copies from

Bangladesh, Laos, Russia and Paraguay.

Asked whether Novo was planning to apply for a patent in

Paraguay, which does not enjoy an exemption because it does not

meet the WTO criteria, the spokeswoman said the Danish company

does not seek patent protection in every country worldwide.

Reuters has earlier reported that two copies of Novo's

weight- loss and diabetes drugs, Orsema and Fitaro, had been

approved in Bangladesh. Some of the injector pens were seized at

the border in a wealthier country where Ozempic's patent is

protected, the UK, the same report showed.

Novo's patent on semaglutide expires in 2031 in Japan and Europe

and in 2032 in the United States, but as early as 2026 in China

and India, according to the company's latest annual report and

industry experts. Lilly said in its annual report its

tirzepatide patent runs out in 2036 in the United States, and

later in other major economies.

RACE TO THE BOTTOM

The approved copies identified by the Reuters review tend to

be much cheaper than the originals.

In Russia, for example, a month's supply of Semavic, used

for diabetes and containing semaglutide, costs 4,420.20 Russian

rubles ($42.76), according to local manufacturer Geropharm. That

was 24% lower than the cost of a month's supply of Ozempic in

Russia, Geropharm told Reuters.

In Bangladesh, a pack of Incepta Pharmaceutical's Orsema is

priced at 350 or 600 Bangladesh taka ($3 or $5), according to

local online medicine information directory Medex.

In the United States, however, a month's supply of Ozempic had a

U.S. list price of $935.77 in September, while the weekly

injection costs around $100 for each 3mL dose through China's

public hospital network.

Novo has not launched Ozempic, Wegovy, and Rybelsus in

Bangladesh, a Novo spokesperson told Reuters.

Due to its affordability, Semavic is appealing to potential

customers abroad.

"We have noticed increased interest in the medication not

only in Russia but also from foreign partners and colleagues,

with inquiries ranging from (a group of former Soviet republics)

to Latin America," Geropharm said in response to Reuters queries

about overseas exports of Semavic.

Chirantan Chatterjee, an economist at the University of

Sussex in Britain, said the growing significance of the obesity

problem may also spur regulators in parts of Asia to ask Big

Pharma to lower prices.

"The direction of travel is therefore more competition, lower

prices, enhanced choices, and consumer welfare expansion in this

area," Chatterjee said.

($1 = 7.0952 Danish crowns)