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Ozempic Is Taking Off With the World’s Largest Obese Population. (Hint: It Isn’t the U.S.)

If we can just get the Chinese to eat more processed American food!


Ozempic Is Taking Off With the World’s Largest Obese Population. (Hint: It Isn’t the U.S.)

China has an obesity problem, and weight-loss drugs are in short supply

By Dave Sebastian, WSJ

Feb. 19, 2024 5:44 am ET


Ozempic is available for the treatment of Type 2 diabetes in China but isn’t permitted as a weight-loss drug.


China has more obese people than anywhere else in the world, and they are increasingly turning to weight-loss drugs to solve the problem.


That is fueling a gray market of drug sellers and buyers, who have little trouble getting around China’s rules on the use of Ozempic.


Ozempic isn’t available for weight loss in the country, instead being reserved for the treatment of Type 2 diabetes. But users on e-commerce platforms are able to buy the shots, colloquially known as “miracle drugs,” simply by declaring they have been diagnosed with diabetes—without providing proof.


They aren’t getting a bad deal: On JD.com, a dosage of Ozempic retails for around $139. That is higher than its cost on the country’s national-insurance plan but much cheaper than the $970 some users pay in the U.S. each month. JD.com didn’t respond to requests for comment.


The gray market for Ozempic highlights a conundrum facing China’s government—how to tackle the world’s biggest obesity problem.


There are about 200 million obese adults in China, and an additional 400 million who are overweight, according to estimates by Jefferies based on official data. China will have another 100 million people with obesity in just over a decade, the investment banking firm predicts, despite the country’s declining population.


The demand for Ozempic is being driven by people who are willing to pay out of their own pockets rather than through health-insurance plans, said Christopher Lui, head of Asia healthcare research at Jefferies. “When the drugs get approved for weight loss, I think there will be a surge in demand,” he said.


In 2017, China’s health commission started a campaign it named the “three reductions and three healthy conditions,” calling for Chinese citizens to reduce their intake of salt, oil and sugar and strive for healthy oral hygiene, body weight and bones. The commission, with other government departments, also adopted a plan to fight obesity among children and adolescents. China’s share of children with obesity is above the world average, according to the World Health Organization.


Obesity isn’t a new problem for the country. China’s living standard improved after its entry into the World Trade Organization in 2001, contributing to an increase in intake of high-energy food among its population, said Zhuo Chen, a health policy and management professor at the University of Georgia.


In 2014, generals complained that Chinese soldiers were becoming too big to comfortably fit into tanks. But innovations in weight-loss drugs have shifted likely solutions away from personal discipline and toward corporate strategy.

Chinese companies are conducting late-stage trials for more than 10 varieties of a drug known as GLP-1 for use in obesity, according to pharmaceutical data provider PharmCube. The drug mimics a gut hormone that helps regulate blood-sugar levels and suppresses appetite.


The market for GLP-1 drugs in China was worth about $1.7 billion in 2023, although more than 80% of that came from diabetes prescriptions, according to market-research firm Clarivate. That market could grow fivefold in the next 10 years, boosted by the rise in the drugs’ use for weight loss, said Karan Verma, a healthcare research and data analyst at Clarivate who has looked into the China market.


Innovent Biologics, a Suzhou-based drugmaker listed in Hong Kong, in January said its first Phase 3 clinical trial of mazdutide—a GLP-1 drug for which the company has a license agreement with Eli Lilly—had met endpoints. China’s National Medical Products Administration has accepted Innovent’s application for the drug’s use in chronic weight management, the company said. Analysts predict the drug could come to market in China around early 2025.


Some companies are also tapping capital markets to raise funds for their obesity-drug development. Hangzhou Jiuyuan Gene Engineering, a drugmaker that filed for a Hong Kong initial public offering in January, is aiming to raise about $100 million in its listing, people familiar with the matter said.


Analysts and investors say the competition will be fierce, especially as Novo Nordisk’s patent for its semaglutide—the drug sold under brands Ozempic and Wegovy—is set to expire in 2026 in China, paving the way for generic drug production.


“I’m expecting significant competition in the Chinese market,” said Cyrus Ng, head of Asia healthcare equity research at Deutsche Bank. “The large number of products available in the market may result in a price war.”


Neither Wegovy—Ozempic’s sister drug specifically made for weight management—nor Mounjaro, another drug initially developed to treat Type 2 diabetes, has been approved for weight loss in China. Two locally made GLP-1 injections in the same drug category have been approved for treating obesity.


The current crop of drugs in China has a lot of room for improvement, analysts say. A drug sold by Huadong Medicine, one of the two companies that first got China’s approval to sell GLP-1 drugs for weight loss, requires a daily injection. Ozempic is typically taken once a week.


The competition to develop weight-loss drugs in China—and the demand for weight-loss drugs on the gray market—means how Beijing regulates the market in the years to come is an open question.


“There could be more regulation or clampdown on cosmetic uses,” said Wilfred Yuen, a China healthcare analyst at Daiwa Capital Markets. But regulatory action on the gray market still appears far out, given that supply for the drugs remains limited in the face of high demand, he added.


In October, the chairman of BrightGene Bio-Medical Technology, a Shanghai-listed pharmaceutical company, touted to participants of a conference call that he had tried the company’s weight-loss drug. He soon received a warning letter from China’s securities regulator, who said he was misleading investors about the efficacy of a drug that was still in development.


Novo Nordisk, which developed Ozempic, said the drug should only be used with a prescription. “We strongly urge patients to follow doctor’s prescription and guidance for drug use and get the medicine through regulated, approved channels to ensure drug effectiveness and safety,” it said.


Write to Dave Sebastian at dave.sebastian@wsj.com


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