Insight
June 17, 2026
How do generics and patents work?
Ozempic has been in the news recently along with BBL and other political oddities. Ozempic's owner, Novo Nordik and iDexis, a manufacturer of generic drugs, took each other to court in June for commercial reasons. This begs the question, how do generics and patents really work?
Ozempic is the commercial name for a synthetic glucagon-like peptide-1 (GLP-1) that mimics a hormone in our bodies' digestive system. The hormone activates the pancreas to release insulin if someone's blood sugar is too low.
The patent's original purpose was to treat patients with type-2 diabetes. The American regulator, the FDA, only approved the drug in 2017, after which commercial use of the drug could begin - therefore 10 years after the patent was originally registered. Meanwhile, the patent expired earlier this year in several countries, which means that generic drugs will soon be on the market. Yes, that GLP-1 that is offered for sale at hair salons and even school gymnasiums is quite possibly already generic drugs that have not yet been made legally available.
Diabetes-2 occurs in about one in eleven people (11%), which obviously makes the market for GLP-1 enormous. In contrast, obese people in South Africa are almost 30% (28.3%) of the population. Ozempic's original market therefore tripled due to the product's unintended application as a slimming agent. In the meantime, of course, other pharmaceutical companies have not stood still and currently companies such as Eli Lilly are already producing similar active compounds.
This is where the patent world becomes lion world. Novo Nordisk, Ozempic's owner, saw the so-called patent abyss coming a long time ago (a patent abyss is when the patent expires and competitors can start selling generic equivalents). Of course, other pharmaceutical companies also have arrows in their quiver. Eli Lilly's arrow was an alternative active agent, which was also patented.
The question for patent owners now arises, namely "how do competitors choose their best arrows, what is the best potion to put on the arrows, and when is the best time to launch the arrows?" The use of the arrows in your quiver is of course then the trade secret, or strategy.
Patents naturally start with a problem. In this case, the problem is obesity. The market opportunity is that no one will eat less for as long as Karoo lamb are sold.. And that's where the problem becomes a business opportunity that can only be unlocked with a good brand. Yes, competitors can synthesise the molecule after the patent has expired and market it under a different brand, but consumer trust always remains non-negotiable. Generic GLP-1, like iDEXIS's drug, therefore still needs to get SAHPRA approval and be manufactured and distributed by accredited pharmaceutical manufacturing facilities. This applies especially to drugs that are administered with a syringe, because the drug is then directly in your bloodstream and your body does not have, as with a tablet, a fair reaction time to reject the drug. Responsible medical practitioners will therefore never deviate from best practice, at least not until medical funds endorse the generic alternatives. It may take years and in the meantime Ozempic's brand will only grow stronger. In fact, the court case currently playing out in our courts gives Ozempic a significant advantage and an opportunity to market their brand for free.
