Headlines
Chinese companies turn to generics as shipments behind US weight-loss craze fade
Published by Global Banking and Finance Review
Posted on September 2, 2025
5 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 2, 2025
5 min readLast updated: January 22, 2026
Chinese companies pivot to generic weight-loss drugs as US demand declines, focusing on semaglutide with expiring patents.
By Patrick Wingrove
NEW YORK (Reuters) -Some Chinese companies now racing to make generic versions of Novo Nordisk's Wegovy also supplied ingredients for more than a billion makeshift doses of weight-loss drugs sold online in the U.S. over the past two years, according to three sources and a Reuters review of shipping and public records.
Cheap copies of Wegovy and Eli Lilly's Zepbound are on the retreat in the U.S. as regulators restrict their sale, slowing shipments from Chinese suppliers of the raw ingredients that allowed for explosive growth of the medicines.
Robert Califf, who had two stints leading the U.S. Food and Drug Administration, said never before had a new drug become so wildly popular that the manufacturer simply couldn’t keep up.
The shortage opened the door for compounding pharmacies, turbocharged by telehealth firms that flourished during the COVID pandemic, to supply cheap copies to a huge market chasing the promised weight loss.
The pivot to FDA-approved generics as patents expire in various countries follows a year of soaring demand for the branded drugs, which have been shown to help people shed as much as 20% of their weight.
At least eight Chinese companies, including publicly traded Jiangsu Sinopep-Allsino Biopharmaceutical and Hybio Pharmaceutical, helped flood the U.S. with raw semaglutide and tirzepatide, the main ingredients in Wegovy and Zepbound, respectively, sources told Reuters. A Reuters analysis of U.S. FDA shipping records backs that up.
Hybio and Sinopep are working to launch their own generic semaglutides, according to one of the sources with knowledge of the efforts and previous Reuters reporting. The source also said Nanjing Hanxin Pharmaceutical and Fujian Genohope Biotech, two of the companies that had supplied compounders, may launch as well.
None of the companies responded to requests for comment.
U.S. law now restricts compounding pharmacies to producing personalized doses for patients who need them, or formulations not offered by the branded medicines.
The source said that for one Chinese manufacturer, supplying ingredients for compounded weight-loss drugs had been its biggest business. The manufacturer is now targeting markets where Novo's main semaglutide patent is expiring next year, such as Canada and Brazil, to sell the ingredient to generic drugmakers, he said.
He said he knew of at least five other Chinese companies known to supply compounding pharmacies that were similarly refocusing on supplying semaglutide for generics.
The switch is unlikely to produce similar explosive growth. Manufacturing semaglutide to its final, injectable form is complex, said a lawyer for a generic drugmaker who asked for anonymity because he was not authorized to discuss the topic.
Companies seeking to sell generics also may strike deals with branded companies that delay their market entry.
'ONCE-IN-A-DECADE ISSUE'
Compounding of the in-demand weight-loss medicines while the branded drugs were in short supply represented an unprecedented opportunity.
In 2024 alone, the eight Chinese companies shipped enough raw material into the U.S. to produce more than 1 billion starter doses of the blockbuster medicines, according to FDA shipping data.
Novo's estimate is even higher. It said Chinese companies shipped enough semaglutide into the U.S. in just over six months to make 1.5 billion starter doses of Wegovy, according to a letter submitted to the U.S. Department of Commerce and posted publicly.
In this year's first quarter, with company supply shortages no longer an issue and the FDA pressing for an end to mass compounding, Hybio, Sinopep and others were still bringing in sizable shipments of ingredients to copy both drugs.
By the second quarter, shipments had plunged 90% from a year earlier for semaglutide, also the main ingredient in Novo's diabetes treatment Ozempic, and by 34% for tirzepatide used to make Zepbound and Mounjaro copies.
The economics for Chinese companies selling semaglutide to compounders was appealing. A month’s supply of semaglutide powder costs just 7 cents to produce, according to a 2024 report in JAMA. Chinese ingredient makers can sell that for as much as seven times that amount to manufacturers looking to make copies, based on sales figures provided by the source.
U.S. compounding pharmacies were selling the injectable drugs for an average of as low as $230 a month, more than half off the branded prices.
The cost to Novo has been high. It missed quarterly sales targets and shares of the Danish drugmaker have been halved this year, contributing to the CEO's May ouster.
Records show that Sinopep, Hybio and one other company have started shipping into the U.S. more liraglutide, the main ingredient of an older Novo drug sold under the brand names Victoza and Saxenda that leads to more modest weight loss.
Generic versions of liraglutide, available in the U.S. since 2024, are now featured by online telehealth sites that once pushed semaglutide.
A second source, a wholesaler who sells obesity drug ingredients to compounding pharmacies but who was not authorized to speak publicly, said he had seen an uptick in liraglutide sales.
Marta Wosinska, a senior fellow at the Brookings Institution who has been tracking the rise of this industry, said shipments of Chinese-made semaglutide exploded not long after the FDA announced the shortages in 2022.
Califf said he expects companies to test the law restricting sales, and that the FDA will set the tone for enforcement with industry guidance. The FDA did not provide an immediate comment.
Still, Califf said, the compounding of weight-loss drugs at enormous scale is likely a “once-in-a-decade issue.”
(Reporting by Patrick Wingrove in New York; Editing by Caroline Humer and Bill Berkrot)
Shipments from Chinese suppliers have slowed due to U.S. regulators restricting the sale of cheap copies of Wegovy and Zepbound.
Chinese companies are pivoting to produce generic versions of semaglutide and targeting markets where branded drugs are in short supply.
U.S. law now restricts compounding pharmacies to producing personalized doses or formulations not offered by branded medicines, affecting their operations.
The production cost for a month's supply of semaglutide powder is low, making it appealing for Chinese companies to sell to U.S. compounding pharmacies.
The market is expected to face challenges, as the explosive growth seen previously is unlikely to continue due to complex manufacturing processes and regulatory hurdles.
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