GLP-1 drugs have redefined the term “pharmaceutical blockbuster”. Already a USD$79 billion global market, continued growth is expected and sales could reach USD$190B in a decade. But while there is great enthusiasm for these products, cost has limited uptake, especially as insurers have been reluctant to take on coverage beyond their original intended use for diabetes. Earlier this year I noted that one market was about to face serious disruption: Generic semaglutide was about to arrive in Canada. Well, the generics have arrived, but GLP-1 sales continue to set new Canadian records.
There seems to be more public awareness of GLP-1 drugs than possibly any other drug on pharmacy shelves. Semaglutide sales took off during the early years of the pandemic. Before the pandemic (2019), Canadian sales were $126 million. By 2025, they had reached $2.9 billion. Ozempic is the version of semaglutide that’s labelled for diabetes. Wegovy is labelled and packaged with larger doses and is approved for weight loss. The delivery mechanism differs as does the dosing, but both contain semaglutide as their active ingredient.
Not all GLP-1 options are the same
Given a choice between a generic drug and a compounded drug, the generic wins on almost all fronts. Compounding is the process by which a pharmacy can create a customized drug product that addresses unique patient needs, such as an allergy, or dosage form requirements. But importantly, compounded drugs are not subject to regulatory approval, and finished products are not reviewed for safety, efficacy, or quality. Risks of harms are consequently higher with compounded products. Compounding serves an important need for patients who need a drug or dosage form that isn’t commercially available.
Compounding GLP-1s was an issue on both sides of the border. I’ve blogged previously about the widespread proliferation of compounding in the United States that started when there was a genuine shortage of GLP-1 drugs (compounding is legally permitted under these circumstances).
The FDA has moved to shut down GLP-1 compounding outside the narrow legal exceptions that once permitted it, sending waves of warning letters out to telehealth providers and compounding pharmacies. Under U.S. law, “503A” pharmacies may compound patient-specific prescriptions, while “503B” refers to outsourcing facilities permitted to compound medications in larger quantities for healthcare providers and institutions. Both may compound products that contain the same active ingredient as FDA-approved drugs when those drugs appear on the FDA drug shortage list. Semaglutide and tirzepatide were compounded on a large scale because Wegovy, Ozempic, Zepbound, and Mounjaro faced supply shortages due to overwhelming demand. These provisions were intended as a temporary response to supply disruptions, not as a permanent substitute for approved medicines. There is no longer any shortage of these products.
The FDA announced this past May, that it proposes not to include semaglutide, tirzepatide, and liraglutide on the 503B Bulks List, concluding that the evidence did not demonstrate a clinical need for outsourcing facilities to compound these drugs from bulk active ingredients. While the comment period has closed, the final determination is still pending. If finalized, it will eliminate the principal 503B bulk-compounding pathway that has supported much of the large-scale telehealth GLP-1 compounding market in the United States. And that will eliminate lower-cost (but higher risk) versions of these products.
Compounding has also been occurring in Canada, too. In 2025 Health Canada issued a position statement on compounded GLP-1 drugs, raising concerns similar to those raised in the USA:
In general, compounding of sterile preparations is a high-risk activity and should only
be considered in exceptional circumstances. A compounded drug might be appropriate
if a patient’s medical need cannot be met by an approved drug, or in the case where
an approved drug is not commercially available, as in the context of a shortage.
Compounding is a legitimate part of the practice of regulated healthcare professionals
however it must not be used to bypass the federal drug review and approval system.
and
While there may be some unique case-by-case scenarios in which a patient would
need a customized GLP-1 receptor agonist therapy, Health Canada is concerned
about the lack of scientific evidence (or justification) to support the use of semaglutide
with other active ingredients in products sold as compounded GLP-1 receptor agonist
therapy. For example, Health Canada is aware that some pharmacies have been
preparing and selling injectable semaglutide with pyridoxine (vitamin B6). However,
Health Canada is not aware of any scientific evidence to support this addition to
address an unmet therapeutic need.
Health Canada indicated it was taking regulatory action and even issued a recall for two compounded products. Regulators in Canada and the USA clearly shared similar concerns about these “grey market” products.
But there’s been a big change in Canada now. The Canadian patent for semaglutide lapsed on January 4, 2026, based on what may have been an oversight by Novo Nordisk. This allowed generic manufacturers to enter Canadian market, the first of any G7 nation. To secure approval, manufacturers are required to demonstrate to regulators that their products are bioequivalent (behave the same way in the body) as the reference product. Generic drugs are held to the same manufacturing and quality standards as the reference drug product, and that must be proven to the regulator. If you’re using an approved generic, you can be confident that the drug will provide comparable effectiveness and product quality as the reference drug product.
The first semaglutide generic arrived in April 2026 – earlier than many anticipated. Others have followed, with additional brands on the way. More brands equals more competition, which is expected to push the price down (currently generic semaglutide is about $100 per month) even further. Novo Nordisk hasn’t walked away – they appear to be offering coupons to discount the net price of Ozempic for consumers, so they don’t lose the entire market to the generics. Generic sales have been modest so far: Apotex sold about $15 million of its version by June 30, and Dr. Reddy’s just $1 million, against $1.49 billion in brand Ozempic sales alone in the same half-year. Brand Ozempic is on pace for a record year in 2026, even with generics on shelves.
While generic sales look trivial compared to brand products, this is influenced by the late arrival of both generic brands during the reporting period. Time will tell who will ultimately capture the market in Canada.
Only one path to genuinely lower prices
GLP‑1 drugs are highly effective therapies, and there’s a huge potential market and demand for these treatments. They are generally well tolerated and are having meaningful, population-level effects on obesity. High prices created an illicit grey market in both Canada and the USA. A path to lower prices now exists in Canada, in a way it doesn’t yet in the US. Whether that actually displaces the grey market, or just adds a third option alongside brand and compounding, is still an open question with only a few months of sales data to go on.