By Amanda Frost, PhD
Vice President, Research, PCMA
There is no shortage of opinions these days about GLP-1 prescription drugs: touting benefits for patients; concerns about sky-rocketing drug costs for employers and governments; praise for manufacturers lowering the list prices; and, of course, one brand drug company suing another over their “misleading” television advertisements. And all of these can be true at the same time. The GLP-1 market is complex, extremely popular, and rapidly evolving. But here’s one more headline, forgive me if you’ve already heard this one: Two Pharma Companies are Manipulating the U.S. Patent System Raising Costs for Employers, Patients, Taxpayers, and Government Programs.
According to their financial statements, Novo Nordisk and Eli Lilly made a combined $52 billion in U.S. net revenues from just two compounds last year: $22 billion from Novo’s semaglutide – same drug, three brand names: Ozempic, Rybelsus, and Wegovy, and $27 billion from Lilly’s tirzepatide, a single drug marketed under the brand names of Mounjaro and Zepbound. To put this into perspective, health news outlet STAT recently estimated that 2025 spending on semaglutide and tirzepatide was 11% of total retail drug spending, a mind-boggling stat for just two drugs. As I previously argued, this amount of revenue gives these two companies serious incentive to protect their market shares at all costs. As a result, both companies have engaged in patent system abuses, which will cost the U.S. billions in unnecessary spending.
The Trials and Tribulations of the U.S. Patent System
A vast literature of research has looked at the harms associated with drug companies engaging in tactics designed to manipulate and abuse the U.S. patent system. For one, these tactics are anticompetitive. They not only delay the time until lower-cost generic or biosimilar products can enter the market but also stifle the innovation pipeline, tying up money in expensive litigation rather than investing in research. Second, they raise costs to the system, forcing patients, employers, government plans, and taxpayers to pay their high prices for far longer than necessary.
It is important to understand that semaglutide and tirzepatide have active patents on their original component. This means that both drugs are still within their legally provided time limit for exclusivity in the U.S. Tirzepatide is still within its original exclusivity period, while the original exclusivity period for semaglutide should have expired this year (2026). Both Eli Lilly and Novo Nordisk, however, see the writing on the wall. One day competitors to their products – whether it be new brand drugs currently under development, generics, or even compounded versions from special compounding pharmacies – will eat into their profits. Kicking that can down the road as far as possible has almost become an art form for brand drug companies with blockbuster products, engaging in a variety of anticompetitive tactics to lengthen their drugs’ exclusivity period and blocking cheaper competitor products from coming to market.
Both companies have already engaged in an array of anticompetitive tactics, most of which are designed to keep cheaper competitor products away from patients. While it’s difficult to quantify many of these, the chart below identifies and describes many of these strategies. The list is long and varied.
We can more easily show the impact of using a patent thicket strategy, where a drug manufacturer abuses the patent system through excessive and overlapping patents to increase the exclusivity period for their drug. Novo has received an additional 15 years of exclusivity for semaglutide and Lilly has already received an additional 5 years for tirzepatide. During this extension period, cheaper generics will not come to market in the U.S. and these two companies will continue to make tens of billions of dollars annually.
These extensions will have real financial impact on the patients who rely on these drugs. Generic versions means lower out-of-pocket costs. Two generic versions of semaglutide launched in June (2026) in Canada, and out-of-pocket costs have already fallen an estimated 75%. If generic versions came to market in the U.S. on time and cut into even a fraction of the brand versions’ market share, our health care system could save billions of dollars every year for the next ten years and beyond.
And This is All Completely Legal…
Novo Nordisk and Eli Lilly are certainly not the first drug companies to manipulate the patent system into protecting their exclusivities and blocking cheaper competitors. AbbVie played these games with Humira, receiving 20 years of exclusivity through these same tactics. Worryingly, these anticompetitive tactics are legal and will continue to cost us all billions of dollars. Neither federal laws nor the U.S. Patent and Trademark Office (PTO) and the Food and Drug Administration (FDA) regulations ever envisioned the types of blatant manipulations that are occurring. But just because things have been this way doesn’t mean they have to stay this way.
Change is possible, and it is working its way through Congress. While my table of horrors above would require numerous reforms across many parts of government to fully address, there is something that can be done right now that would make a meaningful difference. H.R. 3269, the Eliminating Thickets to Increase Competition (ETHIC) Act will limit patent abuses and increase competition in the market. Making sure the patent system works fairly and appropriately and promoting competition are the most important things Congress can do to protect patients from brand drug company price gouging. As we can see from what happened in Canada, when generics come to market, patients will pay less. The case of semaglutide and tirzepatide make it clear, the time for action is now, not after we’ve wasted billions.
No one buys prescription drugs for the label. Read more about what policymakers can do stop brand drug manufacturers from using anticompetitive tactics to block generic competition.
Additional Resources on Brand Drug Company Anticompetitive Patent Abuses:
- Arnold Ventures: Anticompetitive Behaviors Policy Brief
- Bipartisan Policy Center: Prescription Drug Affordability: Examining Select Price Drivers
- The Commonwealth Fund: How Drugmakers Use the Patent Process to Keep Prices High
- U.S. PIRG Education Fund: The Cost of Prescription Drug Patent Abuse