HONEY, I SHRUNK THE PATENT THE OZEMPIC PATENT CLIFF AND ACCESS TO MEDICINES

- Krita Pruthi^[1]

ABSTRACT

The impending expiry of Novo Nordisk’s patent portfolio on semaglutide, the active ingredient (“API”) in Ozempic and Wegovy, signals a decisive moment for India – the “Pharmacy of the Global South.” Semaglutide's global sales and therapeutic impact have been unprecedented, but patents, by their nature, are temporary monopolies. As India faces this “patent cliff”, questions of innovation, access, and global health equity come to the fore. Through Section 3(d) of the Patents Act, 1970, which blocks the evergreening of known drugs, and Section 107A (“Bolar Exemption”), which permits pre-expiry research and regulatory preparation, India’s patent law deliberately calibrates innovation incentives against the imperatives of public health. The ongoing Novo Nordisk A/S v. Dr. Reddy’s Laboratories Ltd. litigation brings these issues to a head, with the Delhi High Court’s eventual ruling likely to set a global precedent. At stake is not only the domestic availability of affordable treatments for India’s 80 million diabetics but also India’s role as the world’s pharmacy in supplying GLP-1 generics. The deeper question that lies at the heart of this debate: who controls the future of life-saving medicines? the innovators who create them, or the societies that need them?

Keywords: Patent Cliff; Bolar Exemption; Access to Medicines

SCIENTIFIC AND PATENT BACKGROUND

Semaglutide, the API in Novo Nordisk’s Ozempic (diabetes), has transformed the treatment landscape. With global sales exceeding $13 billion in 2023, its market impact is extraordinary.^[2] But patents, by design, are time-bound monopolies. In India, Novo Nordisk’s original composition patent expired on September 17, 2024, while an important secondary Indian patent remains in force until March 20, 2026, thus exposing the company to a “patent cliff,” i.e., the sharp drop in exclusivity when generic entry becomes possible.^[3]

Semaglutide belongs to the class of GLP-1 receptor agonists, initially inspired by peptides found in the Gila monsters’ venom.^[4] Novo Nordisk improved earlier drugs (exenatide, liraglutide) by modifying semaglutide’s molecular structure, substituting an amino acid and attaching a fatty acid side chain, resulting in weekly dosing and enhanced stability.

Critics argue this constitutes “evergreening,” i.e., the filing of follow-on patents for marginal tweaks to extend exclusivity.^[5] Section 3 (d) of the Indian Patent Act, 1970 denies patents for “new forms of known substances” unless they demonstrate enhanced therapeutic efficacy.^[6] It is India’s “golden provision” to prevent rent-seeking and maintain access to medicines.^[7]

INDIA’S PATENT LAW: RIGHTS AND EXCEPTIONS

a)    Patents Act, 1970, Section 48 - Patentee’s Rights

A patentee enjoys the exclusive right to prevent third parties from making, using, selling, or offering for sale the patented invention in India, without consent.^[8] On a plain reading, this right is territorially exhaustive, meaning that even the act of “making” a patented product within India for the purpose of export falls within the patentee’s protective ambit.

b)    Patents Act,1970, Section 107A - Certain acts not to be considered as infringement

Section 107A carves out a powerful exception:

“Any act of making, constructing, using, selling, or importing a patented invention solely for uses reasonably related to the development and submission of information… in India or in a country other than India, shall not be considered infringement.^[9]”

Two features stand out:

1. It enables early working, allowing generics to undertake pre-expiry manufacturing and testing to obtain marketing approvals immediately after patent expiry.

2. It explicitly extends to activities abroad, thereby legitimising export for the purpose of foreign regulatory submissions.

Thus, Section 107A potentially shields Indian generics who manufacture patented APIs for export before expiry, as long as the end-use is a regulatory submission.

JUDICIAL INTERPRETATION OF SECTION 107A: THE SCOPE OF THE BOLAR EXEMPTION

In Bayer Corporation v. Union of India & Natco Pharma Ltd, Bayer sought to prevent Natco from exporting sorafenib (Nexavar) to China, contending that the Bolar exemption should be confined to activities directed solely at obtaining Indian marketing approval, thereby excluding exports to foreign jurisdictions.^[10]

The Division Bench rejected this narrow construction, affirming that the statutory wording was intentionally broad. It held that Parliament had clearly contemplated both domestic and foreign regulatory uses when it allowed use “in India or in a country other than India.”

Consequently, the Court reasoned that permitting exports of small quantities of the patented drug for overseas regulatory submissions aligns with the legislative objective of promoting the Indian generic industry’s participation in global markets.

By contrast, in Merck Sharp & Dohme Corp. v. Gupta (2019), a single judge of the Delhi High Court adopted a narrower stance.^[11] The dispute involved the manufacture and export of sitagliptin, an anti-diabetic compound, which the defendant claimed was intended for regulatory submissions abroad. Justice Pratibha M. Singh emphasized that the exemption could not be invoked as a blanket justification for export activities with potential commercial motives.

The Court required the defendant to provide credible, detailed evidence demonstrating that the manufacture and export were exclusively and reasonably linked to the generation of data for regulatory approval. In the absence of such substantiation, the Court found the defendant’s actions to amount to patent infringement under Section 48.

This judgment effectively raises the evidentiary threshold for invoking the regulatory-use exemption, reflecting judicial concern about its potential misuse as a façade for market entry or commercial production.

A third strand of reasoning comes from Strix Ltd. v. Maharaja Appliances Ltd. (2009), which did not concern pharmaceuticals but kettle controls.^[12] Here, S. Ravindra Bhat, J. articulated a general principle that Section 107A, being an exception to the patentee’s exclusive rights under Section 48, must be construed narrowly so as not to undermine the general rule of exclusivity.

CASE IN FOCUS: NOVO NORDISK V. DR. REDDY’S AND THE FUTURE OF SECTION 107A

The semaglutide battle reached the Delhi High Court in mid-2025, with both sides advancing starkly opposed claims under India’s patent regime. On 14 May 2025, Dr. Reddy’s Laboratories filed a petition seeking revocation of Novo Nordisk’s Patent No. 262697, which covers semaglutide formulations. According to Dr. Reddy’s, this patent was nothing more than an “evergreening” strategy, attempting to extend protection over the same subject matter already claimed under Novo’s earlier GLP-1 analogue patent (expired in 2024). Relying on Section 3(d) of the Patents Act and the Supreme Court’s reasoning in Novartis v. Union of India (2013), Dr. Reddy’s contended that mere incremental changes to an existing molecule cannot warrant a fresh monopoly unless they deliver significantly enhanced efficacy.^[13] On this basis, it urged the Court to revoke the patent in its entirety.

Novo Nordisk swiftly countered. On 26 May 2025, it instituted an infringement suit alleging that Dr. Reddy’s was manufacturing semaglutide API and finished injections without authorization. Novo invoked Section 48 of the Patents Act. In Novo’s submission, Dr. Reddy’s activities, whether or not directed at the export market, constituted unlawful “making” of the drug within India’s territory.

Faced with these competing claims, the Delhi High Court issued an interim order on 29 May 2025. Justice Amit Bansal struck a compromise. On the one hand, Dr. Reddy’s was restrained from “selling or marketing” semaglutide in India, thereby protecting Novo’s domestic market exclusivity until patent expiry. On the other hand, the Court declined to bar Dr. Reddy’s from manufacturing or exporting the drug, provided no domestic sales were made.^[14]

The interim arrangement highlights the fault line in Indian patent jurisprudence. Generics argue that a purposive interpretation of Section 107A permits exports for regulatory use in foreign markets. Innovators counter that exceptions must be narrowly construed and that export manufacture undermines the essence of the patentee’s exclusive right. The Delhi High Court’s eventual ruling will therefore determine whether Section 107A provides a broad shield for Indian generics preparing for global launches or whether it must yield to the patentee’s domestic monopoly under Section 48.

TRIPS FRAMEWORK & INTERNATIONAL PERSPECTIVE

“Every man has a property in his own person… the labour of his body, and the work of his hands, we may say, are properly his.”

-       John Locke, Second Treatise of Government

The innovator, having invested labour and ingenuity, earns a natural entitlement to the fruits of that effort. Patents, under this view, are a moral extension of self-ownership.

Yet Locke’s theory was never absolute. He famously qualified that appropriation is legitimate only “at least where there is enough, and as good, left in common for others.^[15]” This Lockean proviso resonates deeply with Article 7 of TRIPS, which insists that protection be “to the mutual advantage of producers and users… and in a manner conducive to social and economic welfare.^[16]”

Robert Nozick, a modern libertarian theorist, extended Locke’s logic but sharpened its conditions. In Anarchy, State, and Utopia (1974), Nozick observed that appropriation is justified “only if the situation of others is not worsened thereby.^[17]”

Here, the Doha Declaration (2001) becomes instructive. WTO Members insisted that “the TRIPS Agreement does not and should not prevent Members from taking measures to protect public health” and affirmed access to medicines “for all.^[18]”

Comparative jurisprudence underscores how different jurisdictions have grappled with this balance. In the United States, the Hatch-Waxman Act of 1984 institutionalised the Bolar Exemption (35 U.S.C. § 271(e)(1))^[19], allowing generics to begin regulatory testing prior to patent expiry. The U.S. Supreme Court in Merck KGaA v. Integra Lifesciences (545 U.S. 193, 2005) confirmed its broad scope, emphasising that even preclinical research with “reasonable relation” to FDA submissions fell within the exemption.^[20] This reflects a pragmatic recognition: innovation incentives must not harden into monopolistic barriers that delay entry of affordable generics.

Canada adopted a similar “early working” exception, codified in Section 55.2(1) of its Patent Act, and defended it successfully before the WTO in Canada–Patent Protection of Pharmaceutical Products (WT/DS114/R, 2000). The WTO panel affirmed that such exceptions were consistent with Article 30 of TRIPS, provided they struck a balance between patent holders’ rights and the public interest in access to medicines.^[21] The decision is often cited as a legitimisation of regulatory-use exceptions worldwide.

The European Union has adopted a more restrictive but still significant variant through the Supplementary Protection Certificate (“SPC”) Manufacturing Waiver (Regulation (EU) 2019/933), which allows EU-based manufacturers to produce generics for export during the SPC term.^[22] While narrower in scope than the U.S. or Canadian provisions, the SPC waiver reveals a global policy consensus that facilitating early entry of generics is indispensable for public health systems struggling with spiralling pharmaceutical costs.

IMPLICATIONS AND FORWARD OUTLOOK

For the Indian generics industry, this “patent cliff” is an unparalleled opportunity. As Dr. Reddy’s has candidly noted, semaglutide generics are expected to become a major revenue generator from FY2027.^[23]

This case is far more than a high-stakes commercial dispute; it is a referendum on the very purpose of India's patent system. The innovator's position, anchored in the exclusive rights of Section 48, inherently frames the patent as an absolute, indivisible property right. This perspective logically demands that public health exceptions like Section 107A be treated as narrow, grudging statutory carve-outs, to be construed narrowly. This paper argues for a fundamentally different judicial framework. Section 107A is not a minor exception to Section 48; it is its co-equal partner in fulfilling the complete legislative mandate. India’s Parliament, in drafting Sections 3(d) and 107A, did not seek to undermine patents; it sought to calibrate them to this higher purpose. Together, they "shrink" the potential, multi-decade monopoly back to the 20-year "grand bargain" that was intended.

The global pricing implications are significant. In China, the arrival of semaglutide biosimilars has already driven price cuts of 25-30%.^[24] If similar dynamics unfold globally, treatment costs could fall from roughly USD 1,000 per month in high-income countries to closer to USD 700, a shift that would radically expand affordability in low and middle-income economies. For India, where over 580 million people live with diabetes, and obesity prevalence is rising sharply, even a modest reduction in price could have an immense public health impact.^[25]

The semaglutide litigation, then, is a bellwether: its resolution will shape not only India’s domestic diabetic and obese populations but also the global contours of access to life-saving therapies in the decades ahead.

^[1] Krita Pruthi is a student at Indian Institute of Management, Rohtak.

^[2] Daniel Gilbert, Novo Nordisk profit surges as it boosts supplies of Wegovy, Wash. Post (Jan. 31, 2024), https://www.washingtonpost.com/business/2024/01/31/novo-nordisk-wegovy-supply-earnings/.

^[3] Indian Patent No. 275964 (filed as IN1313/DELNP/2006, granted Sept. 17, 2004, expired Sept. 17, 2024); Indian Patent No. 262697 (filed as IN5107/DELNP/2007, expires Mar. 20, 2026), Indian Patent Office Database.

^[4] John Eng, Exendin-4: A New Hormone Secreted by the Salivary Gland of the Gila Monster (Heloderma suspectum), 91 J. Biol. Chem. 1730 (1992).

^[5] Shamnad Basheer & Prashant Reddy, The Efficacy of Indian Patent Law: Ironing Out the Creases in Section 3(d), 5 SCRIPTed 232 (2008).

^[6] The Patents Act, No. 39 of 1970, § 3(d), India Code (India).

^[7] Shamnad Basheer & Prashant Reddy, The “Efficacy” of Indian Patent Law: Ironing Out the Creases in Section 3(d), 5 SCRIPTed 232 (2008).

^[8] The Patents Act, No. 39 of 1970, § 48, India Code (India).

^[9] Id. § 107A.

^[10] Bayer Corp. v. Union of India, SCC OnLine Del 8252 (India 2019).

^[11] Merck Sharp & Dohme Corp. v. Gupta, SCC OnLine Del 8032 (India 2019).

^[12] Strix Ltd. v. Maharaja Appliances Ltd., SCC OnLine Del 2246 (India 2009).

^[13] Sukanya Sarkar, Dr. Reddy’s Secures Early Win in Novo Nordisk’s “Ozempic” Infringement Claim, MANAGING INTELLECTUAL PROPERTY (May 30, 2025), https://www.managingip.com/article/2evaygnv843g7bswq2bcw/patents/dr-reddys-secures-early-win-in-novo-nordisks-ozempic-infringement-claim (last visited Oct. 28, 2025).

^[14] Viswanath Pilla, Delhi High Court restrains Dr. Reddy’s, OneSource from domestic sale of weight-loss drug amid patent dispute, Moneycontrol (June 1, 2025), https://www.moneycontrol.com/news/business/stocks/delhi-high-court-restrains-dr-reddy-s-onesource-from-domestic-sale-of-weight-loss-drug-amid-patent-dispute-13082933.html (last visited Oct. 28, 2025).

^[15] John Locke, Second Treatise of Government § 27, at 19 (C.B. Macpherson ed., Hackett Publ’g Co. 1980) (1690).

^[16] Agreement on Trade-Related Aspects of Intellectual Property Rights art. 7, Apr. 15, 1994, 1869 U.N.T.S. 299.

^[17] Robert Nozick, Anarchy, State, and Utopia 178 (Basic Books 1974).

^[18] World Trade Organization, Declaration on the TRIPS Agreement and Public Health, WTO Doc. WT/MIN(01)/DEC/2 (Nov. 14, 2001).

^[19] Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Act), Pub. L. No. 98-417, 98 Stat. 1585 (codified at 21 U.S.C. § 355 & 35 U.S.C. § 271(e)(1)).

^[20] Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005).

^[21] Panel Report, Canada-Patent Protection of Pharmaceutical Products, WTO Doc. WT/DS114/R (adopted Mar. 17, 2000).

^[22] Regulation (EU) 2019/933 of the European Parliament and of the Council of 20 May 2019 Amending Regulation (EC) No. 469/2009 Concerning the Supplementary Protection Certificate for Medicinal Products, 2019 O.J. (L 153) 1.

^[23] India’s Dr. Reddy’s Plans to Launch Generic Obesity Drugs in 87 Countries Next Year, CEO Says, Reuters (July 23, 2025), https://www.reuters.com/business/healthcare-pharmaceuticals/indias-dr-reddys-plans-launch-generic-obesity-drugs-87-countries-next-year-ceo-2025-07-23/.

^[24] Goldman Sachs Analysts Project Potential Price Reductions of Around 25% for Semaglutide in China, Colum. Sci. & Tech. L. Rev. (Nov. 26, 2024), https://journals.library.columbia.edu/index.php/stlr/blog/view/653

^[25] Int’l Diabetes Fed’n, IDF Diabetes Atlas (9th ed. 2021) https://diabetesatlas.org/ (last visited Oct. 28, 2025).