Medical Monopolies & Inverted Payoffs

The Rise of GLP-1 Drugs

The past decade has revolutionised pharmaceutical markets, clinical practices, and public health discourse due to the emergence of GLP-1 receptor agonists. A class of medications used to treat type 2 diabetes and obesity, most prominently Ozempic, Wegovy, Mounjaro and Zepbound, these drugs have become multibillion-dollar assets for pharmaceutical giants such as Novo Nordisk and Eli Lilly
GLP-1 medications have drawn attention for intense competition, regulatory scrutiny, and growing concern over monopolistic practices. In late 2024, U.S. sales alone exceeded USD 71 billion, and a USD 470 billion market is estimated by 2030. Behind this surge lies a complex and advanced patent system that allows these companies to maintain exclusive control over these drugs long after the expiration of the original patents on their active ingredients.

The Patent Landscape of GLP-1 Drugs

The core pharmaceutical compounds in GLP-1 drugs, semaglutide and tirzepatide, are no longer novel in themselves. What is novel is the way companies have layered these drugs with device patents, new formulations, dosage variations, and use-case extensions. Semaglutide, for instance, which forms the basis of both Ozempic and Wegovy, is protected by a thicket of patents. As of 2024, there were 154 approved U.S. patents and over 320 filed applications involving semaglutide. The vast majority of these do not concern the primary drug itself but rather the way it is used or administered. This approach has allowed companies to extend control of the drug beyond the typical 20-year limit, with some now protected through to 2042. A similar strategy has been pursued by Eli Lilly with tirzepatide, filing 53 applications and securing 16 patents, with primary protections until 2036 and additional patents extending exclusivity up to 2041. In India, semaglutide, the active drug in Wegovy and Ozempic, goes off patent in March 2026. This relatively short span of protection places more onus on Novo Nordisk to move quickly and secure market share before generics enter. The launch of Wegovy in mid-2025 is therefore a well-timed entry, particularly since Eli Lilly’s Mounjaro had already reached Indian shores in March 2025.

Patent Layering in Practice

A recent study published in JAMA provided a comprehensive assessment of how patent layering functions in practice. Across ten GLP-1 receptor agonist products approved between 2005 and 2021, manufacturers listed a median of 19.5 patents per drug, with over half of these protecting delivery devices rather than active ingredients. These include injector pens, auto-injectors, and other mechanisms that complicate generic replication. The median expected duration of market protection from the time of FDA approval was 18.3 years, substantially longer than the 12 to 14 years observed for most top-selling drugs, and the highest reported for any drug-device combination to date.

Despite several generic companies filing to challenge these patents, none have managed to gain FDA approval for a generic GLP-1 receptor agonist. More and more companies are taking advantage of the pleiotropic, or multifunctional, nature of GLP-1 medications to gain further patents based on newly identified therapeutic applications. Although semaglutide was first approved for blood sugar control, research presented in Nature Medicine and JAMA Psychiatry during early 2025 has demonstrated its ability to lower cardiovascular risk, reduce alcohol cravings, and treat conditions such as drug-induced pancreatitis and cognitive impairment. These findings have created new fronts for patent applications, as companies seek to guard these secondary uses with indication-specific patents. In effect, each successive therapeutic application becomes permission for a re-extension of the patent, a practice that not only expands the market but also protects it from competition under the pretext of medical innovation.

Legal Strategies to Maintain Monopoly

Legal strategies have also served to further fortify these monopolies. Both Novo Nordisk and Eli Lilly have pursued lawsuits aggressively against generic firms, as well as unlicensed compounders and telehealth providers. In 2024, Novo Nordisk settled confidentially with firms including Mylan, Apotex, and Sun Pharmaceuticals, resolving suits on major patents such as U.S. Patent No. 10,355,462. While the terms remain undisclosed, it is likely that these settlements included market entry delays and royalty agreements, tactics consistent with post-Actavis industry practice.

Lawsuits have also targeted unauthorised compounders who offer cheaper, compounded versions of semaglutide and tirzepatide. In some cases, these products were found to lack the active ingredient entirely or contain dangerous impurities. In August 2024, the FDA received over 300 reports of adverse events related to compounded semaglutide, raising public safety alarms that simultaneously reinforced brand-name firms’ market positions. The game of exclusivity does not end with lawsuits or drug patents.

Power of Pharma Companies: Rewarding Investors

The economic consequences of this patent strategy are significant. In 2024, more than 80 percent of Novo Nordisk’s U.S. sales and almost 50 percent of Eli Lilly’s consisted of GLP-1 drugs. Meanwhile, shareholder dividends continually exceeded investment in research. Novo Nordisk invested 41 percent more in dividends and share buybacks than in R&D between 2020 and 2024, while Eli Lilly’s USD 15 billion share buyback plan and dividend increases highlighted the emphasis on returns to investors over increased access to treatment.

Shareholders have rewarded them richly. Since the initial GLP-1 launches, Novo Nordisk and Eli Lilly’s combined market capitalisation has risen by almost USD 700 billion, almost a tenfold increase from their total GLP-1 sales to date. In fact, semaglutide alone generated over USD 29 billion for Novo Nordisk in 2024, accounting for 70 percent of its global revenues, an extraordinary concentration of value in a single therapeutic class.

Access is Unequal: Global Perspective

GLP-1 receptor agonists, widely recognised as a game changer by many studies, face major global access and affordability challenges. Disparities are driven by economic, geographic, and systemic factors that limit their equitable distribution across populations.

Obesity, once treated only through lifestyle modifications, now has pharmacological options, though not without efficacy and safety concerns. It is one of the most pressing global public health challenges, projected to affect over 1 billion people by 2030, according to the World Obesity Federation’s 2025 Atlas. The prevalence of obesity has risen significantly not only in high-income countries but also in low- and middle-income countries (LMICs). GLP-1 receptor agonists such as semaglutide and tirzepatide represent a shift in the management of obesity, blood pressure, and glycaemic control, and are associated with anti-inflammatory effects and reduced cardiovascular risk. Semaglutide has also been suggested as a transformative drug for non-surgical treatment of obesity, serving as an alternative to bariatric procedures by reducing appetite, prolonging satiety, and slowing digestion.

Pricing Power and Profit Maximization

Despite their clinical promise, GLP-1 drugs remain prohibitively expensive for most patients, often exceeding USD 1,000 per month. In 2025, an analysis by Dr Steven D. Pearson and the Institute for Clinical and Economic Review (ICER) examined the challenges and potential solutions for ensuring equitable access to GLP-1 drugs for obesity treatment in the United States, where nearly 40 percent of adults living with obesity are potential users of these medications. Although the annual cost has declined from USD 1,000– USD 1,166 to around USD 666– USD 750 per month, it remains unaffordable for a large portion of the patient population, exacerbating inequalities in access. Recent manufacturer programmes offer discounts to uninsured patients, reducing the out-of-pocket price to around USD 499 per month. However, even at reduced costs, drug makers continue to earn substantial profits and delay generic competition.

Isabella Backman from Yale estimated that biosimilar versions of GLP-1 drugs could cost between USD 0.75 and USD 72.49 per month. Yet, due to limited competition, unregulated pricing, the influence of pharmaceutical managers, and surging demand, the U.S. retail price remains as high as USD 968.52.

The Insurance and Cost Dilemma: Global Disparities

Despite their therapeutic potential, these medications are disproportionately accessible to wealthier, urban, and well-insured populations. In the United States, the GLP-1 retail price remains above USD 1,000 per month. While access to GLP-1 drugs is already limited within the U.S., the global discrepancy is even starker.
Health insurance coverage in the United States excludes GLP-1 weight-loss drugs under Medicare Part D, and only 13 state Medicaid programmes offer coverage. As a result, 69 percent of American adults do not have insurance coverage for these medications. Even among the privately insured, prior authorisation requirements often force patients to pay out-of-pocket. The effects are not only financial but also profoundly unjust.

By contrast, GLP-1 drugs for diabetes are covered under Germany’s statutory health insurance, with new obesity guidelines encouraging broader reimbursement. In Japan, the Ministry of Health has approved semaglutide for diabetes treatment under the universal health insurance system, offering subsidised access with co-payments as low as 30 percent. While high-income nations continue to debate cost and coverage, low- and middle-income nations face a different reality altogether.

Developing nations experience much more limited access to essential medicines. However, obesity and diabetes are on the rise in low- and middle-income countries (LMICs), where around 75 percent of people with diabetes and a large share of the global obese population reside. While some manufacturers offer discounted prices, these are not universally available. In India, for example, obesity has more than tripled, with current figures showing that 24 percent of women and 23 percent of men are obese, according to NFHS (2019–21). Data from the WHO Global Health Observatory (2024) also indicates a rising incidence of diabetes. India now has over 101 million people living with diabetes as of 2023, yet approximately 71 percent remain untreated.

In the face of this mounting burden, GLP-1 drugs remain largely out of reach. Many people are unaware that these therapies even exist. The main barrier is cost, which ranges between ₹10,000 and ₹20,000 per month. Additional challenges include the absence of generic alternatives, limited insurance coverage, and a general patient preference for oral medications over injectables. Currently, GLP-1 drugs are not covered by most health insurance companies in India due to their classification as lifestyle or weight-loss drugs rather than as essential treatments for diabetes or obesity. Even when included, they are rarely reimbursed. Addressing these barriers could significantly expand access. While Novo Nordisk currently dominates the Indian market, the anticipated expiration of key patents between 2026 and 2027 is expected to lower prices and improve equitable access.

The situation is even bleaker in least developed countries (LDCs), where obesity and diabetes are rising rapidly but remain underdiagnosed and undertreated. According to WHO data, more than 60 percent of deaths from diabetes occur in LMICs. In sub-Saharan Africa, the prevalence of adults with diabetes is expected to double by 2045, yet fewer than 20 percent are currently diagnosed. The availability of GLP-1 receptor agonists in these countries is practically non-existent. No major donor programme includes these medicines as a priority, and global health aid still focuses predominantly on infectious diseases. Unlike with HIV/AIDS drugs, which benefited from compulsory licensing and pooled procurement initiatives, no such mechanisms have been created for diabetes or anti-obesity biologics. In this vacuum, GLP-1 therapies remain the preserve of wealthy nations and elite populations in middle-income countries.

Price and Access Differences for GLP-1 Drugs

Despite being a high-income country, only about 1.3 percent of U.S. adults living with obesity have received prescriptions for GLP-1 receptor agonists. Racial disparities are evident: Black and Hispanic adults, who have higher rates of obesity, are less likely than white patients to be prescribed GLP-1 drugs, even after adjusting for health insurance. Limited insurance coverage and provider bias both exacerbate these inequalities in the U.S.

In contrast, countries with government price controls—such as the UK, Germany, France, Australia, the Netherlands, Canada, and Japan—offer these drugs at lower prices and with broader access. For example, Wegovy costs approximately USD 280 per month in Germany and is covered by insurance for eligible patients. In the United States, the same medicine is priced at USD 1,300, nearly five times higher. In Japan, Ozempic costs around USD 169 per month and is included in the national health insurance scheme. These price controls and public health coverage contribute to higher prescription rates in Germany and Japan compared to the U.S.

While the United States leads in medical innovation, its high prices and limited coverage are widening access inequalities. Eli Lilly has attempted to undercut Novo Nordisk by offering Zepbound at USD 399 for uninsured patients, but such discounts are neither universal nor sustainable.

According to Peterson KFF data, significant global price disparities exist for GLP-1 weight-loss treatments. For instance, Ozempic and Rybelsus are priced at USD 936 in the U.S., while they are available for just USD 87 in Australia and USD 83 in France. Similar disparities exist for other drugs. These differences raise important concerns about affordability and equitable access, underscoring the need for policy reforms and more transparent pharmaceutical pricing strategies.

The economic and social burden of unequal access to GLP-1 medications is significant and will likely lead to lost productivity. Poorly managed diabetes and obesity reduce workforce participation and increase long-term healthcare costs due to complications such as heart disease and kidney disorders. The World Health Organization recognises access to essential medicines as a crucial lever to improve public health and reduce health disparities.

Pharmaceutical manufacturers that benefit from publicly funded research, such as grants from the NIH, must balance profitability with availability and accessibility. Access delays during the HIV/AIDS epidemic in the early 2000s, and again during the Covid-19 vaccine rollout in 2020, showed how high-income countries monopolised supply while LMICs waited years for access. This pattern must not be repeated for obesity and diabetes, which affect millions globally. Prices should be adjusted according to national income levels, with lower costs in LMICs to improve access.

Policy, Pricing, and Systemic Reforms

Even after patents expire, the technical complexity of manufacturing GLP-1 drugs remains a formidable barrier to generic entry. As biologics, these drugs require advanced production infrastructure, strict quality control, and sophisticated drug delivery systems. Manufacturing a single generic version of semaglutide or tirzepatide may cost USD 2 to USD 3 million, excluding the additional expense of clinical trials. Clinical development accounts for nearly 80 percent of total costs, despite ongoing innovations in AI and robotic technologies.

Indian pharmaceutical companies, such as Dr Reddy’s Laboratories, are developing generic portfolios of GLP-1 receptor agonists. However, their launch timelines are aligned with patent expirations across different jurisdictions, beginning in China and Brazil before possibly reaching India and the United States later in the decade. India represents a vast and underserved obesity market, with 13 percent of adults living with obesity, according to the World Obesity Atlas, 2025. Novo Nordisk and Eli Lilly are racing to build brand loyalty through prescriber-focused marketing. Due to India’s ban on direct-to-consumer advertising of prescription drugs, these companies have invested heavily in disease awareness campaigns to build credibility among physicians. At the same time, a shadow black market has emerged, with affluent urban consumers sourcing GLP-1 medications from abroad ahead of their official launch.

This scenario has led to growing calls for urgent reform. Recommendations from organisations such as I-MAK, and academic work published in JAMA, have proposed concrete measures. These include overhauling the patent system by tightening novelty and non-obviousness standards, streamlining post-grant review to cancel low-quality follow-on patents, expanding insurance coverage to classify obesity as a disease under Medicare, Medicaid, and private insurers, and promoting generic competition through simplified FDA pathways, compounded alternatives, and public-sector pharmaceutical manufacturing. Collaborative efforts between the FDA and USPTO, and scrutiny from the U.S. Government Accountability Office, indicate that policymakers are aware of the issue. However, meaningful reform has been slow.

The story of GLP-1 drugs is not only one of scientific innovation and therapeutic promise. It is also a story about how invention becomes monopoly, and how monopoly is translated into market power that limits access, inflates prices, and deepens inequity. A blend of aggressive patenting, legal manoeuvring, financialisation, and market segmentation has turned GLP-1 therapies into a case study in 21st-century pharmaceutical capitalism. Whether regulators, lawmakers, and civil society can break this model remains uncertain. If they fail, GLP-1 drugs may become just another class of life-saving medicines that prioritise shareholder returns over patient wellbeing.

This international disparity highlights a troubling trend. As obesity and type 2 diabetes increasingly affect the global population, access to the most promising treatments remains restricted. Pharmaceutical companies continue to maximise profits through patent extensions, market segmentation, and tiered pricing, while the world’s poorest populations are excluded from the benefits of medical progress. The result is not just a missed opportunity for disease prevention, but a widening gap in global health equity. If left unaddressed, GLP-1 drugs may become a cautionary tale of medical advancement that systematically leaves behind those most in need.

GLP-1 medications symbolise both progress and persistent inequality. Governments could issue compulsory licences to permit the production of generic GLP-1 drugs before patent expiration. Countries might also negotiate directly with manufacturers to secure lower prices based on national income, using bulk purchasing as leverage. A compulsory mandate for broader insurance coverage that includes weight management alongside diabetes could reduce financial barriers for patients. Ultimately, prices should be cost-effective and aligned with long-term public health outcomes rather than short-term market dynamics. Such an approach would support both innovation and equitable access.