Soaring Demand for GLP-1: Can Biotech Industries Meet the Challenge of Increased Demand?
The biotech industry is grappling with a global shortage of GLP-1 drugs, a class of medicines that are key drivers in the peptide market and crucial for managing weight-loss and diabetes. This shortage is particularly acute in low- and middle-income countries, where access to these life-changing drugs is limited due to high costs.
To address this issue, several biopharma companies are taking action. Eli Lilly, a dominant player in the GLP-1 market, has purchased a plant from Nexus Pharmaceuticals to increase production, with manufacturing set to begin next year. The company has also announced that its weight loss drug Zepbound will soon be available in 2.5 mg and 5 mg single-dose vials at a discounted price, aiming to help millions of adults with obesity access the medicine they need.
Similarly, Simtra BioPharma is launching a 150,000 square-foot facility in Bloomington, Indiana dedicated to fill and finish GLP-1 drugs. Meanwhile, CordenPharma is investing €900 million ($981 million) over the next three years to increase GLP-1 drug production in Europe and the U.S. CordenPharma's investments require the construction of new facilities with cutting-edge technologies and expert teams.
Capacity expansion is a key strategy for addressing the GLP-1 drug shortage. Companies like Shaily, a major injector pen maker, are significantly increasing capacity to meet anticipated demand growth. Shaily is doubling production capacity from around 40-45 million pens to 80-85 million pens in FY26, with plans for further expansion to cater to both domestic and global markets.
The upcoming patent expiry on Novo Nordisk’s semaglutide is spurring Indian and other international drugmakers to prepare cheaper generic versions. Experts expect generics to reduce prices by 50-80%, increasing affordability and demand, which will further pressure supply chains to scale up.
Regulatory actions and market dynamics are also shaping the response to the GLP-1 drug shortage. While the FDA has declared the semaglutide shortage resolved by early 2025 and phased out unapproved compounded GLP-1 drugs, these compounded versions had temporarily filled some shortfall but raised safety and regulatory concerns. The removal of compounded GLP-1s stabilizes market share but does not solve supply constraints.
Major players like Novo Nordisk face competition from Eli Lilly’s Zepbound (tirzepatide), which demonstrates superior efficacy. Novo’s newer candidates are still in development or pending approval, so market dynamics remain competitive and may influence investment in capacity and innovation.
Investors in China have plowed $400 million into licensing obesity drugs from Shanghai-based Jiangsu Hengrui Pharmaceutical. Aurisco Pharmaceutical has launched its facility in Yangzhou to enable multi-metric ton production of its generic GLP-1 peptides. The roof-top solar-paneled facility will double the space of its already-existing plants in the state, and add 1,000 jobs.
However, despite these efforts, the supply issues associated with GLP-1 drugs are predicted to continue. To further ramp up production, Novo Holdings has announced the $16.5 billion buyout of CDMO Catalent.
A study published by Doctors Without Borders/Médecins Sans Frontières (MSF) found that unavailability and limited access due to high costs already affect patients in low- and middle-income countries. The rising demand for GLP-1 drugs, in part due to their use for non-medical weight loss, is putting unprecedented pressure on suppliers.
Eli Lilly has committed more than $18 billion to build, expand, and acquire facilities in the U.S. and Europe to address growth from potential new medicines. Stephen Houldsworth, senior vice president and global head of Platform Management & Marketing at CordenPharma, stated that the investments will impact the ability to provide GLP-1 support to innovators.
In summary, while the industry is actively scaling production capacity and preparing for a wave of generic GLP-1 drugs that will likely ease some supply pressures, the extreme global demand surge for these weight-loss and diabetes drugs means supply will be catching up gradually rather than immediately. Safety and regulatory concerns about unapproved compounded alternatives have also shaped the market response.
- Biopharma companies, such as Eli Lilly and Simtra BioPharma, are expanding capacity for GLP-1 drugs to address global shortages.
- Eli Lilly is increasing production with a new plant purchase from Nexus Pharmaceuticals and plans to launch Zepbound in discounted prices.
- Simtra BioPharma is building a 150,000 square-foot facility for GLP-1 fill and finish.
- CordenPharma is investing significantly in GLP-1 drug production over the next three years, requiring construction of new facilities with advanced technologies.
- Indian and international drugmakers are preparing generic versions of semaglutide, which may lower prices and increase demand, further straining supply.
- The FDA has declared that the semaglutide shortage will be resolved by early 2025 and has phased out unapproved compounded GLP-1 drugs.
- Novo Nordisk faces competition from Eli Lilly’s Zepbound and will likely have to adjust investment in capacity and innovation due to market dynamics.
- Investors in China have invested in licensing obesity drugs and building facilities for production of generic GLP-1 peptides.
- Despite ongoing efforts, supply issues associated with GLP-1 drugs are projected to persist, with companies like Novo Holdings taking measures such as acquiring CDMOs to further ramp up production.
(In addition, related topics to be discussed: health-and-wellness, finance, business, real-estate, food-and-drink, investing, technology, education-and-self-development, and general-news could cover discussions on the financial implications of these developments, the impact on lifestyle choices, the role of food and drink in obesity and diabetes, the growing importance of technology and data-and-cloud-computing in the pharmaceutical industry, and the broader societal and educational implications of these conditions.)
