Chinese Firms Expand Generic Weight-Loss Drugs Amid U.S. Restrictions

Chinese pharmaceutical companies, including Jiangsu Sinopep-Allsino Biopharmaceutical and Hybio Pharmaceutical, capitalized on U.S. supply shortages of branded weight-loss drugs like Novo Nordisk's Wegovy and Eli Lilly's Zepbound by supplying raw ingredients for over a billion makeshift doses sold online. As U.S. regulators have tightened restrictions on compounded versions and shipments of these raw ingredients have slowed, these companies are pivoting to producing generic versions targeting markets such as Canada and Brazil where key patents are expiring. Despite the high profitability potential due to low production costs and significant markups, manufacturing complex injectable drugs like semaglutide poses significant challenges. The surge in demand, fueled by telehealth services and compounding pharmacies during the COVID pandemic, led to a temporary market disruption that is now subsiding as branded drug supplies stabilize. Industry experts suggest the explosive growth seen in the U.S. market for these weight-loss drugs is unlikely to return, but Chinese firms continue to seek opportunities internationally. The shift underscores the adaptability of Chinese pharmaceutical firms in responding to global demand and regulatory environments.