India bulk drug makers start preparing for Ozempic patent expiry

Bulk drugs — also known as APIs — are the building blocks in making finished formulations of a medicine that are used by patients.

Indian firms that make active pharmaceutical ingredients, or APIs, are gearing up to supply the basic ingredient that goes in making copies of Novo Nordisk A/S’s weight-loss drugs that are losing patent protection next year in several large markets.

From local giants Dr Reddy’s Laboratories Ltd. to suppliers like Macleods Pharmaceuticals Ltd., Indian firms are preparing to make bulk drugs for manufacturing generic versions of semaglutide, that Novo sells as Wegovy and Ozempic.

Bulk drugs — also known as APIs — are the building blocks in making finished formulations of a medicine that are used by patients.

Drugmakers in India — the world’s largest supplier of non-patented medicines — aim to tap what could be a $94 billion global opportunity by 2035 as patent on Novo’s blockbuster therapies start expiring in 2026 in multiple countries including Brazil, Canada, India and China.

Dr Reddy’s has invested in a 550-kilogram (1,212.5 pounds) peptide production facility, Nomura analysts led by Saion Mukherjee wrote in a July 15 report. Hyderabad-based Granules India Ltd. has said it created a unit, Ascelis Peptides, to boost production of ingredients, including semaglutide in the June quarter.

Vasu Jindal, who runs a Surat-based bulk drug manufacturer, has started selling semaglutide to larger Indian generic drugmakers for research and product development.

While Jindal’s firm will sell a mere 10 kilograms of the API by the end of this year, he is estimating annual demand from next year to skyrocket to as much as 240 kilograms, signaling the massive demand surge even smaller suppliers are anticipating.

Indian API makers will face intense price competition from Chinese companies, which control about 80% of global generic bulk drugs supply chain. Even some API makers in India rely on chemicals from China for making bulk drugs, reflecting a key area of vulnerability.

But an early start could be the key to success, especially since semaglutide is a complex biological molecule and harder to replicate.

The challenge for the ecosystem is “securing consistent, high-quality starting materials and scaling up purification,” according to Hari Kiran Chereddi, managing director at Hyderabad-based HRV Global Life Sciences Pvt., which is also adding these drugs to its pipeline.

“That’s why you’re seeing API players quietly preparing well before patent expiry,” he said.