Pressure on Biotech Industries: Can Companies Meet Increasing Requirements for GLP-1?
In a bid to address the ongoing shortage of GLP-1 drugs, several biopharmaceutical companies are expanding manufacturing capacity, entering dual-sourcing contracts, and investing in biologics infrastructure. This capital-intensive phase of scaling up is expected to improve supply reliability over the next few years.
One of the latest entrants in this arena is Aurisco Pharmaceutical, which has launched a facility in Yangzhou, China, enabling multi-metric ton production of its generic GLP-1 peptides. Meanwhile, American manufacturer Simtra BioPharma is setting up a 150,000 square-foot building dedicated to fill and finish GLP-1 drugs in Bloomington, Indiana, aiming to begin production in 2026.
Notably, Novo Nordisk, a leading player in the GLP-1 market, is investing over $4 billion in a facility in North Carolina to fill and finish its obesity and diabetes drugs Wegovy and Ozempic. Similarly, Swiss-based CordenPharma has pledged to invest €900 million ($981 million) over the next three years to expand GLP-1 drug production in Europe and the U.S.
The demand for GLP-1 receptor agonists continues to outpace global good manufacturing practice (GMP) capacity, giving contract development and manufacturing organizations (CDMOs) increased pricing power. As a result, pharmaceutical sponsors are securing multi-year capacity guarantees with take-or-pay clauses years before anticipated approval to mitigate supply risks.
Despite these efforts, the supply has struggled to keep pace with the unprecedented demand for GLP-1 therapies. This situation has historically forced patients to seek compounded versions from pharmacies, which are less regulated and raise safety concerns. While the FDA has declared official shortages resolved for specific GLP-1 drugs, ongoing compounding persists due to continued high demand and issues around drug affordability.
The European Medicines Agency (EMA) has flagged the GLP-1 drug shortage as a serious public health concern, warning that the shortage is unlikely to resolve within the year. The situation is compounded by a lack of a coordinated national plan in the U.S. to facilitate safe and widespread delivery of these medications, with complexities involving pharmaceutical companies, suppliers, insurance plans, and government agencies contributing to access barriers.
In an effort to address this issue, Eli Lilly has announced that its new GLP-1 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. Furthermore, Lilly has acquired a U.S.-based facility from Nexus Pharmaceuticals to meet rising demands for GLP-1 drugs, with production set to begin next year.
The rising demand for GLP-1 drugs, driven in part by their use for non-medical weight loss, is putting unprecedented pressure on suppliers. This trend, coupled with the shortage, is particularly concerning in low- and middle-income countries, where the scarcity is likely to have disproportionate effects on people with type 2 diabetes.
Investors in China have plowed $400 million into licensing obesity drugs from Shanghai-based Jiangsu Hengrui Pharmaceutical. The company's roof-top solar-paneled facility will double the space of its already-existing plants in the state, and add 1,000 jobs, on top of the nearly 2,500 people working in the region for the drugmaker.
Stephen Houldsworth, senior vice president and global head of Platform Management & Marketing at Basel-based CordenPharma, stated that this investment will significantly impact the company's ability to support innovators in the GLP-1 space. The new Zepbound option from Eli Lilly is intended to assist adults with obesity who may not have employer coverage or who need to self-pay outside of insurance.
As the biopharmaceutical industry continues to invest in GLP-1 drug manufacture, it is hoped that the supply shortage will gradually be alleviated, ensuring that those who need these life-changing drugs have access to them.
- Biotech companies like Aurisco Pharmaceutical and Simtra BioPharma are investing in biologics infrastructure to produce GLP-1 peptides and fill and finish GLP-1 drugs, respectively.
- Not only big players, such as Novo Nordisk and CordenPharma, but also Chinese companies, like Jiangsu Hengrui Pharmaceutical, are receiving significant investments to expand GLP-1 drug production.
- In the health-and-wellness sector, science advances drive the demand for GLP-1 receptor agonists, necessitating finance and business strategies like securing multi-year capacity guarantees and strategic investments to address the supply shortage.
- The widespread shortage of GLP-1 drugs results in patients seeking compounded versions, which raises safety concerns, underlining the need for increased pharmaceutical investments in this area and a coordinated response from all stakeholders involved in its production and distribution.
