How Asian pharma suppliers cash in on Ozempic copies

By Andrew Silver

SHANGHAI (Reuters) - Just over a year ago, New Zealand customs officials started to intercept batches of injectable medications labelled Fitaro and Orsema, developed by a little-known Bangladeshi drugmaker, Incepta Pharmaceuticals.

The injectable pens, 14 of which were seized at the border, contained semaglutide, a patented substance that helps control blood sugar levels and appetite and is the key ingredient in Novo Nordisk's blockbuster drugs Ozempic and Wegovy, according to data from New Zealand's medicines regulator Medsafe, reviewed by Reuters. 

The Incepta drugs are part of an Asia-based supply chain manufacturing and exporting cheaper copies of Ozempic across the world, Reuters has found, driven by a spike in global demand for the drug. 

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

According to a Reuters review, at least 106,000 packs of semaglutide-based medicines made in Asia by Incepta have been shipped to 12 foreign markets including countries like the United States and Britain where Ozempic is protected by patents.

Incepta did not respond to multiple requests for comment about Fitaro and Orsema, which are approved for sale in Bangladesh, according to public records and information provided by a local regulatory official.      The official with the Bangladesh Directorate General of Drug Administration, who declined to be named because he was not authorized to speak to the media, said Bangladeshi regulators had given Incepta permission to export Fitaro or Orsema but only provided it had won approval from receiving countries.      The injectable pens, which are not authorised for use in New Zealand, were referred to Medsafe between August 2023 and May 2024 and destroyed, data from the regulator showed.  

Medsafe told Reuters the Fitaro and Orsema batches that were destroyed appeared to be for personal use but did not comment on whether the medicines carried any health risk. 

"Medicines that have been imported from overseas will not have been assessed and approved by Medsafe, so carry a significant risk as there is no assurance they have been made to an acceptable level of quality," the regulator added in response to a Reuters query about imports of semaglutide-based drugs.

Reuters has previously reported that semaglutide drugs from Bangladesh were sold on India-based online marketplace IndiaMART. The latest reporting shows that the international distribution of semaglutide drugs not made by Novo Nordisk is much wider.

The data surveyed 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 intercepted drugs from Britain, Switzerland and Ireland.

In addition, an interview with a trade show exhibitor, a review of data from the commercial customs data provider, and from Brazil's Justice Ministry showed that six little-known companies, four of which are based in Asia, manufacture semaglutide-based medicines and that their products are shipped overseas. 

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

These players take advantage of global patent exemptions allowed for less developed countries and instances of loose patent enforcement in countries including in China, the Reuters review shows.

Novo Nordisk told Reuters it is the only approved manufacturer of semaglutide globally, and it could not vouch for the safety or effectiveness of products claiming to contain semaglutide made by other manufacturers.

Even though Novo Nordisk's semaglutide is protected by international licences, countries like Bangladesh and Laos, classified as least developed nations by the United Nations, enjoy exemptions from industry patent rules.

The Danish firm, which has quickly become Europe's most valuable company with a market capitalisation of around $400 billion, states on its website that it does not enforce patents in less developed countries.      Given the frenzied demand for Ozempic, the financial impact of possible patent infringement on Novo Nordisk is currently limited.      "Illegal versions of the drugs today do not cannibalize Novo's sales given they are selling every dose they can produce," said Nicholas Anderson, portfolio manager and managing director at global asset management firm Thornburg Investment Management, which owns Novo Nordisk stocks.    

However, such copies are raising healthcare concerns. Medicines regulators in at least six countries including the U.S., Britain and Ireland have rejected, destroyed or seized some of Incepta's semaglutide-based drugs, according to drug regulator records and responses from regulators to Reuters' queries.      In one case, unauthorised semaglutide was recalled in South Africa in December, because of potential health risks, according to a public notice posted in January by the local medicines regulator. The authority told Reuters the ingredient was sourced from a supplier in China not authorised to produce the ingredient in Ozempic, without providing more details. 

"The semaglutide, said to be found in this unauthorised substance, may contain unexpected impurities or degradation products which can have unknown effects on patients," the notice said. 

Reuters found no evidence that these products would have caused any harm to patients, but their spread could add to public health concerns about a sector also threatened by fake Ozempic.  

PARALLEL SUPPLY CHAIN

The official with the Bangladesh Directorate General of Drug Administration said Orsema was approved in Bangladesh and considered safe. Fitaro is also approved for sale, public records show.

A clinic in the capital Dhaka has prescribed Incepta's Fitaro injector pens to around 20 patients, all foreigners based in Bangladesh, according to a manager, who declined to be named or identify the clinic due to the sensitivity around the treatment.      "When patients found out that Fitaro was available in Bangladesh at a maximum monthly cost of around $60 a month, (against) $650 in the U.S. (for Wegovy), they didn't seem particularly focused on who the manufacturer was," the manager said.      In Laos, semaglutide-based medicines can only be legally produced and distributed for national use, Davone Duangdany, director of the drug and medical device control division within the Laos health ministry, told Reuters.      But some Chinese companies have been promoting Laos-produced semaglutide tablets in China, where Novo Nordisk's patent is due to expire in 2026 or earlier if it loses a legal challenge. At an industry exhibition in Shanghai in June that Reuters attended, ingredient manufacturer Nanjing Hanxin Pharmaceutical Technology displayed boxes of Semagcare semaglutide tablets, manufactured by Laos-based Boten Elemento Pharma.

Abdu Zoghbi, business development director of Nanjing Hanxin, told Reuters that his company provides semaglutide to the Laos-based drugmaker. 

"We don't know which countries (Semagcare is sold to) but we are doing the promotion because once they sell more, we sell more API (active pharmaceutical ingredient) to them," he told Reuters when asked about why it was showcasing the drug at the expo.

Boten Elemento Pharma's Semagcare tablets appeared on sale on a Chinese language website and also a Chinese social media app, according to a Reuters review. Sales of semaglutide by a Chinese company could amount to an infringement of Novo Nordisk's China patent, said Frank Yang, senior associate at Marks & Clerk Intellectual Property Agency in reply to a Reuters query about possible licences breaches.

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

The China National Intellectual Property Administration declared the Danish drugmaker's patent invalid in September 2022. However, Novo Nordisk successfully appealed this decision.

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

"We hope to see a continued trend in supporting and protecting innovation during patent invalidation proceedings," a Novo Nordisk spokesperson said in response to questions about whether it was enforcing its patent in China. 

Contacted by Reuters by fax, the Chinese medicine regulator did not reply to queries about quality controls at the Chinese firms making semaglutide.

A second Chinese firm, Shanghai Longtide Biotechnology, which described itself as a biotechnology company, also displayed a box of Semagcare tablets at its booth at a separate trade show in Shenzhen that Reuters also attended.      Reuters contacted Boten Elemento Pharma through its website but the company did not respond. A business registered as Shanghai Longtide Biotechnology did not reply to requests for comment. 

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

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

The Russian company said Zhejiang Peptites Biotech's supply of semaglutide is carried out in accordance with a contract and it does not export the finished drug, Semavic, abroad.

However, Semavic was exported from Russia multiple times to the breakaway Georgian region of Abkhazia, information from the commercial customs data provider reviewed by Reuters showed. 

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

The customs data showed that it was not only Chinese firms supplying semaglutide: Incepta has imported the ingredient from Swiss generic drugmaker Bachem.      A spokesperson for Bachem said it produces semaglutide for pharmaceutical companies for research and development purposes only and declined to comment on its relationship with Incepta.      Medicines regulator Swissmedic told Reuters Bachem was authorised to export semaglutide, but added Swissmedic was "not supervising patents".

(Reporting by Andrew Silver; Additional reporting from Gleb Stolyarov in Tbilisi, Ruma Paul in Dhaka, Farah Master in Hong Kong, Fabio Teixeira in Rio de Janeiro, Daniela Desantis in Asuncion, Rishika Sadam in New Delhi; Vivian Sequera in Caracas, Editing by Miyoung Kim and Lisa Jucca)