Pharmaceutical majors roll out generic diabetes drugs

[Graphics by Song Ji-yoon and Lee Eun-joo]

South Korean pharmaceutical companies are being criticized for their excessive focus on generic combination drugs, in stark contrast to global players who are continuously introduce innovative novel drugs.

The Ministry of Food and Drug Safety said on Tuesday that 31 percent, or 462 out of the 1,488 drugs approved in 2023, were diabetes treatments.

Data released by market research firm UBIST showed that the country’s type 2 diabetes treatment market grew at an annual average of 8 percent over the past five years to hit about 1.5 trillion won ($1.1 billion) in 2023. The industry saw a surge in generics in 2023 as the patents for blockbuster diabetes treatments expired.

The patents for AstraZeneca plc’s SGLT-2 inhibitor class diabetes treatment Forxiga (dapagliflozin) and MSD Ltd.’s DPP-4 inhibitor class diabetes treatment Januvia (sitagliptin) expired in April and September 2023 respectively.

With the Korean entity of AstraZeneca announcing its withdrawal of Forxiga from the domestic market by the first half of 2024, the barrier to entry for generic Forxiga has been lowered.

AstraZeneca Korea is currently proceeding with the withdrawal after voluntarily withdrawing the product license for Forxiga on April 25th, 2024. Sales of Forxiga prescription drugs arr estimated to amount to around 53 billion won last year, according to UBIST.

The expansion of insurance coverage for combination therapies also had a significant impact on the diabetes drug frenzy.

The Ministry of Health and Welfare revised the insurance coverage for combined use of diabetes treatments in April 2023, expanding coverage to include two- and three-drug combination therapies.

“Discussions are currently underway to expand coverage to four-drug combination prescriptions for diabetes, hypertension, dyslipidemia, and others,” an industry official said. “We expect market interest in combination therapies to continue.”

The global diabetes treatment market is also continuing to grow. According to data from Decision Resources Group, the global type 2 diabetes market, which was $630 million in 2019, is expected to grow at an annual average of 1.1 percent to $703 million in 2029.

Alongside the diabetes treatments, related obesity treatments are also creating a significant trend.

According to the Korea Bio Industry Association, Novo Nordisk Inc. recorded sales of 12.9 trillion won in the first quarter, up 24 percent from the same period in 2023. Sales of its diabetes treatments increased by 24 percent to 9.8 trillion won during the same period, and sales of GLP-1 class diabetes treatments totaled 6.9 trillion won.

Eli Lilly and Company also recorded a 26 percent increase in sales in the first quarter compared to the same period in 2023 to hit $8.77 billion. Sales of new products launched after 2022 increased from $1.79 billion in the first quarter of 2023 to $2.39 billion in the first quarter of 2024.

Sales of diabetes treatment Mounjaro increased by 218 percent from $568 million in the first quarter of 2023 to $1.81 billion in the first quarter of 2024.

As the global diabetes treatment market continues to grow rapidly, some are urging Korean companies to focus on developing innovative new drugs rather than generic combination drugs.

Companies such as Dong-A ST and Il-dong Pharmaceutical are developing GLP-1 class diabetes treatments that are drawing attention, but it will take time until they are released as they are still in the clinical stage.

“Many companies are developing various new drugs using GLP-1 analogues due to the popularity of obesity treatments,” an industry official said. “As the market will eventually become saturated, efforts should be made to develop innovative new drugs based on new mechanisms that were not previously available.”