While the recent launches of GLP-1 drugs from Novo Nordisk and Eli Lilly have been nothing short of a staggering financial success, the rollouts have consistently been hamstrung by manufacturing and supply constraints.
Now, both companies have poured billions of dollars into capacity expansions and, within recent months, managed to largely erase their diabetes and obesity medicines from the FDA’s online shortage roster.
That multiyear production tango has left a strong impression on the GLP-1 manufacturing landscape. As Novo and Lilly move ahead with supply largely unfettered, many other drugmakers with up-and-coming metabolic drugs are taking note.
Meanwhile, the resolution of yearslong shortages could portend a major showdown with the compounding pharmacies that helped maintain consistent supply of GLP-1s in the interim, analysts at consulting and technology firm ZS recently pointed out.
Righting the ship on supply
Following rapid (and pricey) expansion efforts from Novo and Lilly, plus recent shortage updates at the FDA, “positive signals” are emerging when it comes to the consistent supply of GLP-1 medicines for diabetes and weight loss, Bill Coyle, global head of biopharma at ZS, said in a recent interview.
While all doses of Novo's Ozempic and Wegovy are listed as currently available in the U.S., the FDA has not officially listed the shortage as resolved. Lilly, for its part, has resolved its Mounjaro and Zepbound shortages, according to the FDA.
Coyle pointed to moves such as Novo’s recent Wegovy launch in China, plus its efforts to push back against shortage declarations giving compounders GLP-1 manufacturing licenses, as indicators of Novo’s “confidence in future supply” and its “ability to supply [GLP-1s] next year and hopefully going forward as well.”
Novo and Lilly have both been on a manufacturing expansion tear in 2024, lining up multiple high-profile production projects around the world.
To name just a few investments, Novo has blueprinted a $4.1 billion fill-finish plant at its campus in Clayton, North Carolina, drawn up plans for a $220 million raw ingredients plant in its home country of Denmark and telegraphed intentions to construct a new $409 million quality control hub there as well.
Meanwhile, Novo Holdings’ $16.5 billion buyout of CDMO giant Catalent means that Novo Nordisk will soon secure three more fill-finish sites from its sister company.
Lilly, for its part, has had an equally impressive run of production investments, from its $5.3 billion outlay for a Mounjaro and Zepbound active pharmaceutical ingredients plant in Lebanon, Indiana, to plans for a $4.5 billion R&D and manufacturing facility—also in Indiana—dubbed the Lilly Medicine Foundry dedicated to future innovative drugs.
While raw capacity has taken center stage in discussions about Novo and Lilly’s GLP-1 production upgrades, quality control and site interconnectivity have also been critical to the companies’ manufacturing endeavors, ZS’ supply chain and manufacturing practice lead, Anshul Agarwal, told Fierce Pharma.
On the latter point, the companies have increasingly turned to data and insights that reflect and inform their entire manufacturing networks, rather than siloed sites and equipment, he explained.
Elsewhere, Coyle pointed to Novo's recent decisions to discontinue production of certain insulin presentations and more dated delivery technologies as potential signs that the drugmaker is working on a “reallocation of manufacturing resources to the current drugs.”
Slotting CDMOs into the equation
While Novo and Lilly have been working diligently to refine their production processes, contractors have been filling a critical niche in the GLP-1 manufacturing environment. Their roles are likely to evolve further with time, ZS’ Agarwal explained.
Given that production line build-outs like those undertaken by Novo and Lilly are multiyear projects meant to bolster capacity in the long term, the need for more immediate production solutions has spurred an uptick of interest in contract manufacturers, Agarwal said.
The current dynamic often sees GLP-1 drug developers initially leverage CDMOs for the final fill-and-finish step of the manufacturing process, given that it’s easier to transfer that last stage compared to the entire production process, he explained.
Looking ahead, companies will be eager to tap into CDMOs with true end-to-end expertise. Further, CDMO capacity will likely take a back seat to the contractors’ reputations for quality and compliance—alongside their ability to quickly communicate with customers and resolve problems during manufacturing—Agarwal said.
The compounder’s dilemma
In a clear sign that Novo and Lilly’s GLP-1 production hitches are moving into the rearview mirror, both companies made big strides in expunging doses of their medicines from the FDA’s shortage list this year.
Lilly achieved the supply milestone first, with the FDA in early October removing Mounjaro and Zepbound from its online database in a move that ended a 22-month stretch of tirzpetatide dose shortfalls in the U.S. The FDA reaffirmed its decision to delist the shortage in late December.
Novo, meanwhile, saw the FDA list the last strength of semaglutide that had been in shortage—the 0.25-mg starter dose of its obesity GLP-1 Wegovy—as available in late October. At the time, the company said it was once again regularly shipping all doses of Ozempic and Wegovy to wholesalers around the U.S.
The resolution of the shortages has led to immediate and vocal backlash from compounding pharmacies, which are permitted to supply imitation versions of branded drugs in the U.S. when those products are in the midst of a supply squeeze.
To hear ZS’ Coyle tell it, those compounders will likely “continue to try to figure out a way to play” given the lucrative allure of the GLP-1 market.
Nevertheless, continued supply stability from Novo and Lilly, coupled with pricing competition from those same pharma companies, could eventually push more patients to seek out branded GLP-1s, he predicted.
On the cost front specifically, Lilly over the summer unveiled a steep discount to single-dose Zepbound vials through the company’s online LillyDirect pharmacy.
“I think you’ll still see people trying to play just because the market’s so large and attractive; so large and attractive and because access isn’t ubiquitous,” Coyle said of the ongoing compounding imbroglio, pointing to issues with insurance coverage around GLP-1s in addition to the question of pure availability.
Rivals on the horizon
Given the critical role manufacturing has played in Lilly and Novo’s GLP-1 rollouts, production will undoubtedly continue to form a key component of the market for future metabolic medicines. That said, many developers have likely learned some lessons from Novo and Lilly's efforts.
Up-and-coming GLP-1 players whose products could start trickling onto the market around 2026 will likely need to adopt specialized approaches in development, such as targeting subsets of patient populations or leading with outcomes-related studies, Coyle explained.
As for the ever-important manufacturing piece, ZS’ Agarwal said that hammering out production steps in advance, rather than in the midst of a commercial rollout, would result in far fewer supply headaches.
Meanwhile, Coyle suggested that initial supply stumbles like those Novo and Lilly encountered are unlikely to repeat given the impressive reputation GLP-1 medicines have garnered over the years.
“If [Novo and Lilly] had known five years before, or two years or three years or four years before the trials were done that they would deliver this kind of profound result, they could have probably predicted the demand for such an amazing outcome would be very high,” Coyle said. “But going first, that’s a big bet to build the production capacity to be able to sustain a market that’s going to go from zero to tens of billions of dollars pretty rapidly.”
For companies with up-and-coming GLP-1s, there is likely to be a greater motivation around the middle phase of development “to take a little more risk in upfront investment” in manufacturing because “there’s already a scientifically proven hypothesis out in the marketplace,” he said.