China's GLP-1 boom hits margin squeeze as price war looms

by TU Jun

China's fast-growing market for GLP-1 drugs is facing growing margin pressure, with rising sales offset by higher costs and intensifying price competition.

This is evident in results from InnoCare Pharma (02591.HK), one of a growing group of domestic GLP-1 entrants. The company reported its first full year of commercial performance for efsubaglutide alfa, described by the company as China's first domestically developed long-acting GLP-1 drug.

Revenue reached 132 million yuan (about US$19 million) in 2025, up 555.7% year on year. Net loss widened to 341 million yuan, up 95.4%, as spending on sales expansion and research increased sharply.

Selling and distribution expenses rose to 177 million yuan, from 2.39 million yuan a year earlier, while R&D spending reached 206 million yuan.

Efsubaglutide alfa was approved in 2025 by China's National Medical Products Administration for type 2 diabetes and added to the national reimbursement list from January 2026, supporting hospital access. However, it has yet to be cleared for obesity, considered the most commercially valuable segment of the GLP-1 market. Late-stage trial data are expected by the end of 2026.

Industry observers say the pattern reflects a broader challenge: companies must invest heavily in commercialization while continuing to develop new indications, particularly in weight management, leaving profitability under pressure.

Pricing pressure is already building.

The core China patent for semaglutide expired on March 20, 2026, opening the door to a wave of biosimilars. At least 10 domestic drugmakers, including Jiuyuan Gene, Huadong Medicine, Livzon Pharmaceutical Group and Qilu Pharmaceutical, have filed for approval, with more candidates in late-stage trials.

Prices are already under pressure. Online listings show semaglutide injections priced below 300 yuan for smaller doses, down more than 65% from pre-reimbursement levels in some cases.

Similar declines are seen in rival products. Tirzepatide, developed by Eli Lilly, has seen prices in China fall from around 1,758 yuan per dose to roughly 500 yuan, according to e-commerce listings.

Globally, GLP-1 therapies remain one of the fastest-growing drug classes. In 2025, Eli Lilly generated about $36.5 billion in combined sales of tirzepatide, narrowly surpassing Novo Nordisk's semaglutide franchise. But Lilly has warned that lower prices are beginning to offset volume growth — a trend now emerging in China.

Chinese drugmakers are eroding the dominance of imported therapies and intensifying competition.

Innovent Biologics launched its GLP-1 drug mazdutide in 2025 and has already secured approval for obesity ahead of some rivals, underscoring the importance of the weight-loss market. However, the company has not disclosed sales.

Analysts say competition will increasingly hinge not only on clinical performance but also on pricing strategy, distribution networks and supply chain execution, as products become more similar.

Looking ahead, oral GLP-1 drugs are emerging as the next battleground.

Novo Nordisk launched an oral version of Wegovy in the United States in January 2026, while Eli Lilly has secured approval for its oral GLP-1 therapy orforglipron.

In China, no oral GLP-1 drug has yet been approved specifically for obesity, though companies including Huadong Medicine and Hengrui Pharmaceuticals are advancing pipelines, suggesting the next phase of competition may shift from injectables to more convenient oral therapies.

As more entrants join and pricing pressure intensifies, China's GLP-1 market is shifting to a more competitive, margin-sensitive phase, where scale and execution will determine the winners.