A recent Reuters investigation reveals that Chinese active pharmaceutical ingredient (API) suppliers, including Hybio Pharmaceutical and Jiangsu Sinopep-Allsino Biopharmaceutical, are pivoting to generic drug production after U.S. regulators curtailed the compounding market for weight-loss drugs like Wegovy and Zepbound.
The shift follows a dramatic decline in U.S. imports of semaglutide—down 90% year-on-year in Q2 2025—and tirzepatide, which fell 34% over the same period according to data from the IndexBox platform. These compounds were previously used in compounded versions of branded drugs, filling supply gaps left by Novo Nordisk and Eli Lilly.
In 2024, eight Chinese companies shipped enough semaglutide to the U.S. to produce over one billion starter doses, according to FDA shipping data. Novo Nordisk estimated the figure at 1.5 billion doses over six months. However, new U.S. law now restricts compounding pharmacies to personalised formulations not offered by branded products, effectively ending mass production of copycat injectables.
In response, Chinese suppliers are targeting international markets such as Canada and Brazil, where key patents are set to expire. This strategic redirection aligns with broader CDMO and contract manufacturing opportunities as firms seek regulatory-compliant pathways for semaglutide distribution.
“The widespread compounding of these weight-loss drugs was a once-in-a-decade issue,” said former FDA commissioner Robert Califf. He anticipates further regulatory guidance to shape enforcement.
