Lower Prices, Bigger Market: The Next Phase of GLP-1 Drugs

**Terence Flynn** (0:00)
Welcome to Thoughts on the Market. I'm Terence Flynn, Morgan Stanley's US. Pharma and Biotech Analyst.

**Thibault Boutherin** (0:05)
And I'm Thibault Boutherin, Morgan Stanley's Europe Pharmaceuticals Analyst.

**Terence Flynn** (0:09)
Today, how cheaper GLP-1 obesity medicines could reshape access, pricing, and supply chains, and what the first generic markets may signal for Europe and the US. It's Monday, July 13th, at 10 a.m. in New York.

**Thibault Boutherin** (0:25)
And it's 3 p.m. in London.

**Terence Flynn** (0:29)
Around 1 billion people live with obesity worldwide, including over 100 million in the US. Right now, the introduction of the first lower-cost generics of semaglutide, a GLP-1 medicine, in some international markets, could have consequences on affordability and demand.
Thibault, what are the first countries seeing the introduction of semagenerics? What are the current dynamics, and why should global investors pay attention?

**Thibault Boutherin** (0:54)
Sure. So far, generics are being introduced this year in three countries, in India, Canada and Brazil.
And if we look at India, this is the first market where the generics are being introduced. The patent for semaglutide expired in March 2026 And 13 companies have launched 26 generics across different formulations, auto-injectors, vials and pills, which price is lower than the branded drug. And because the India market was quite underpenetrated for GLP-1, we are seeing affordability-driving volume expansion. In Canada, two generics have been launched so far. Four other generics are waiting for approval and more are being filed. And finally, in Brazil, one generic was approved last month. And we are expecting these generics to be launched in Brazil in July.
And 17 other generics are in a different stage of regulatory review in Brazil. And we would expect more to enter the market by the end of this year. And the reason why we focus on these markets is because we believe they could provide a blueprint for what could happen later in the US and in Europe, in particular for Canada, which shares some characteristics with Europe and the US. And the pattern for some agglutides will expire in Europe in 2031
And in the US from 2032

**Terence Flynn** (2:20)
Great. Maybe on the India front, I know that's at the leading edge. What happened with patient demand when price came down?

**Thibault Boutherin** (2:28)
Sure. So what we saw in India is a surge in volume when generics were launched. And the volume in April 2026 were already six times higher than the volume in February. And that expansion has been driven mostly by this generics launch, which captured 80% of semaglutide volume in April.
And our India team expect that the GLP-1 market in India will actually expand in value from $125 million in 25 to more than $1 billion by 2030 despite lower prices, as we see greater volume and greater adoption of GLP-1s in India.

**Terence Flynn** (3:06)
The other thing you and I have discussed is the supply chain. And one of the questions is the ability of some of the generic manufacturers to scale semaglutide.
So maybe talk to us about the current capabilities. And could we see bottlenecks in the supply chain formation here?

**Thibault Boutherin** (3:24)
Yeah, sure. There's three key elements to watch on the supply chain. The first is the active pharmaceutical ingredient, or API. And that's the semaglutide molecule itself. The second element is the device and the device components. And the third element is the fill and finish, which is basically putting all of these things together. On the API side, so semaglutide molecule, we believe there will be no bottleneck in supplying for generics, as we see a handful of large Chinese companies out of China building multi-ton capacity for semaglutide. So we believe there will be no shortage of API to supply the generic supply chain for injectables.
On the device, these are the same device companies that are supplying the branded version of semaglutide. And other GLP ones for the device that are also supplying the generic makers. And we are seeing meaningful investments being made. So we don't believe there will be a bottleneck here. Well, we could see a bottleneck emerging is on the fill and finish side. Fill and finish requires highly controlled clean room space to minimize contamination. It requires regulatory approval, and it takes up to three years to build fill and finish capacity. That's where if there is not more investment being made over the next few years, there could potentially be a bottleneck emerging for the generic companies.
Terence, while some agglutite generics will definitely represent a challenge for the existing branded version of this GLP one, there are some insights in these emerging dynamics that suggest that terzepatide, the other GLP one, could be less at risk. Can you touch a bit on some of these dynamics?