By: Nick Bonds, Esq.

We all make mistakes. We overlook small things – often to no major consequence. But every now and then small mistakes can cause a ripple effect. Even minor oversights can make big waves. That may be exactly what is happening right now with Novo Nordisk’s patent on Semaglutide in Canada.

A quick refresher on patents: a patent is the government-granted right to exclude others from making, using, or selling an invention or technology for a limited period of time. In exchange for publicly disclosing how their invention works, patent holders are granted a temporary monopoly – which is particularly valuable in the world of pharmaceuticals. Drugmakers like Novo Nordisk use patents to lock in exclusive rights to manufacture and sell hugely profitable medications like Ozempic and Wegovy, both based on the active ingredient Semaglutide.

Patents in the U.S. and Canada commonly last for 20 years (though there are ways to extend their protection). Once a patent expires, however, other manufacturers are largely free to step in and produce “generic” versions of the drugs. Generally, these are available at a much lower cost to patients and health plans.  

So what happened with Novo Nordisk? Well, filing a patent comes with a few associated costs, and the patent holder generally must pay annual renewal fees for the life of their patent to keep it active. It appears that Novo Nordisk filed for patent protection of their Semaglutide drugs in Canada, but for whatever reason has neglected to pay the relatively modest maintenance fees and their patents are now set to expire. In other words, by failing to cough up a few hundred dollars and complete some paperwork, Novo Nordisk has effectively forfeited its monopoly on the sale and manufacture of one of the most profitable drugs in the world – at least in Canada.

To be clear, Novo Nordisk U.S. patents remain intact, and the company still holds a monopoly on the manufacture of Ozempic and Wegovy here. But this misstep at the Canadian patent office means we could be about to see a booming industry in producing generic Semaglutide drugs just over the border. This would ignite a surge in importation of these weight loss drugs and pharmacy tourism, as U.S. plans and participants are eager to get their hands on these medications. Even if generic Canadian Semaglutide drugs don’t immediately flood the U.S. market, the mere existence of cheaper generic options could put huge downward pressure on the price of these drugs domestically. For self-funded group health plans already struggling with how (or whether) to cover GLP-1s, this could shift the cost-benefit analysis in meaningful ways.  

So next time you make a mistake at work, you can at least take some comfort knowing that it probably didn’t disrupt a $100 billion-dollar drug market.