Will legal troubles in the US weigh on India’s obesity drug boom?

Ozempic and Wegovy’s Danish drugmaker Novo Nordisk and Mounjaro’s US-based Eli Lilly and Co. have denied the claims.

But as Sun Pharmaceutical Industries Ltd, Dr Reddy’s Laboratories Ltd, Cipla Ltd and other Indian drugmakers prepare to launch cheaper versions of semaglutide, the compound behind Ozempic, Wegovy and Rybelsus, experts say the lawsuits will have little impact on domestic sales.

Semaglutide is set to lose its patent in India, Canada, and Brazil in March, which could see domestic prices plunge by about 80% and open the floodgates for the diabetes and anti-obesity drug.

“[We] don’t expect any impact in India, generic launches will be on track,” Shrikant Akolkar, pharma research analyst at wealth management firm Nuvama told Mint.

At least 10 companies have filed documents with India’s Central Drugs Standard Control Organisation (CDSCO) to conduct Phase III studies to assess the safety and efficacy of semaglutide, while others have completed pre-clinical and bioequivalence studies and are planning clinical trials.

“We are closely monitoring developments related to reported side effects and the ongoing lawsuits. Our launch plans will be guided by the outcomes of these cases as well as the US FDA’s (Food and Drug Administration) assessment of generic approvals,” said a spokesperson for Biocon Ltd, which is planning clinical trials to sell its version of semaglutide in multiple markets.

“Clinical trial protocols will be designed to meet the highest ethical and scientific standards. Approvals from CDSCO and relevant ethics committees will be secured prior to trial initiation,” the spokesperson added. “Comprehensive safety monitoring will be built into the study, and we will incorporate global safety data and learnings to ensure the highest levels of protection for participants.”

Sun Pharma, Dr Reddy’s, Cipla, Zydus Lifesciences Ltd, Natco Pharma Ltd, Lupin Ltd, and Mankind Pharma Ltd did not respond to Mint’s queries.

The side effects

Ozempic, Wegovy and Mounjaro belong to a class of medications known as GLP-1, or glucagon-like peptide-1, a natural hormone that helps regulate blood sugar and gives a sense of fullness, making the drugs popular for their weight-loss properties.

But users in the US have accused makers of GLP-1 drugs of failing to warn about adverse side effects such as stomach paralysis and intestinal obstruction, according to the websites of law firms Motley Rice and Broughton Partners. Other users have complained about vision loss.

But lawyers told Mint there isn’t enough information on the extent of the adverse side effects claimed in the US lawsuits. Also, in India, there is no legal provision to file for compensation after a drug has been approved, except in exceptional cases where a drug has been misbranded or is defective, they said.

In India, the CDSCO approves a drug after it successfully completes clinical trials—early trials on humans after successful Phase III and other advanced studies. Further, post-marketing surveillance is carried out for new drugs to detect any adverse effects.

“The authority has the power, depending on the severity, to restrict or prohibit the manufacture or sale of a particular drug,” said Biplab Lenin, partner (pharma, healthcare and life sciences), at Cyril Amarchand Mangaldas, a law firm.

In the US, patients come together to file class actions, which helps in mitigating costly suits against pharmaceutical companies. In India, lawsuits against drugmakers are few and far between. In a rare instance in 2019, Indian authorities directed Johnson and Johnson Ltd to compensate some Indian patients for defective hip implants.

An expanding market

Novo Nordisk launched Rybelsus in India in 2022 and Wegovy in June this year. Eli Lillylaunched its GLP-1 injectable Mounjaro (tirzepatide) in India in March, crossing ₹100 crore in sales in less than half a year, underscoring the demand for such weight-loss drugs in the country.

Nuvama analysts in a recent report pegged sales of GLP-1 drugs in India at about ₹1,800 crore in 2027-28.

“We believe that this segment will grow significantly. We will add capacity, there will be more volume, obviously, lower prices,” Erez Israeli, chief executive of Dr Reddy’s, told investors during the company’s first-quarter earnings call in July. “2026 is just the first year that we will significantly deal with these products.”

In the US, the market for GLP-1 drugs continues to grow despite the lawsuits, said Vishal Manchanda, senior vice president of institutional equities at Systematix Group.

“Overall, semaglutide and tirzepatide put together are growing quarter-on-quarter,” he said. “There could be an impact on the scale of opportunity… earlier, it was pegged as a $150-200 billion global market; that might be in question now.”

As for the India market for GLP-1 drugs, Manchanda expects it to hit sales of ₹10,000 crore (about $1 billion) in 3-5 years.

In May, Goldman Sachs shrunk its global estimate for GLP-1 drugs from $130 billion by FY30 to $95 billion.

The Indian market for these drugs, however, may have to contend with a different set of challenges. “With demand outweighing supply, we could expect a flood of spurious or misbranded medicines entering the market,” said Lenin of Cyril Amarchand Mangaldas.

Misuse of GLP-1 drugs for cosmetic purposes is another issue, he said, adding that regulators need to play a vital role in addressing this issue.