Analysts will be watching as a generic version of semaglutide—marketed by Novo Nordisk as Wegovy for weight loss—launches in Canada as a test case for future price erosion in the U.S.
A generic version of injectable semaglutide is now available in Canada after regulators approved a copycat version of the GLP-1 weight loss best seller on Tuesday. Health Canada touted the approval as the first in the G7 nations.
While the Canadian market is many times smaller than the U.S., the Danish pharma is still expecting the generic pressure to represent a material impact. BMO Capital Markets called the event a “test case for the world” in a Tuesday evening note.
“Investors will follow the evolution of the market in Canada closely as a test case to see if and how generics can compete with branded peptides,” BMO wrote.
Canada granted authorization for Dr. Reddy’s to market generic semaglutide. While the approval was granted for the generic version to be used for type 2 diabetes, which would replace Novo’s Ozempic, the product is often prescribed off label in Canada for weight loss.
Novo Nordisk lost patent protection for the drug in January, stemming from an error in paying a small patent maintenance fee in the nation, as originally reported by Endpoints News in 2025. Dr. Reddy’s had been in the running with Sandoz to get the product to market, but both ran into delays providing additional information to the Canadian regulators. As a result, the launch has arrived later than originally expected.
What happens next in Canada “sets the stage for initial international erosion for Novo’s semaglutide revenue,” BMO said. The three brands combined—Ozempic, Wegovy and Rybelsus—sold $36.19 billion, outpacing Merck’s long-time bestseller cancer drug Keytruda as the best-selling medicine of 2025.
“Generic Ozempic exists in other markets like India, but today’s approval marks the first in North America, and we will look to how quickly pricing compression and revenue erosion impact Ozempic in the market as a proxy for other future generic entries,” BMO wrote.
In January, Novo received approval for oral Wegovy for weight loss. The drug is off to one of the strongest launches in pharma history. Investors will hear initial sales figures when Novo reports first quarter earnings on May 6.
The first major change for Canadian patients will be the price. A month supply of Wegovy costs about $400, with some rebates available or commercial insurance coverage. BMO expects Dr. Reddy’s product, and any others that come after, to put pressure on Novo’s pricing power in Canada.
Health Canada noted that generic medicines are typically priced 45% to 90% cheaper than the branded versions, but did not disclose an expected price for Dr. Reddy’s semaglutide product. The regulator is reviewing another eight applications for generic semaglutide, which could tee up a fierce battle on pricing.
Elsewhere, Novo is watching as generic semaglutide is set to arrive in Brazil and China where the patents expired in March. None have been approved yet but products are under regulatory review. Combined with Canada, these international markets could contribute to a negative mid-single digit impact to international revenue, according to Novo’s previous projections.
Novo CFO Karsten Munk Knudsen said that Canada would be “the biggest contributor” to the initial exclusivity erosion during Novo’s fourth quarter 2025 earnings call in February.
“Time is a key variable in terms of impact,” Knudson said on the call. “I think the direction of travel is the same, but there could be both an upside and a downside to our guidance depending on the pace of approval of generics in Canada.”
BMO does not expect the issue to spill over to the U.S. Bigger pressures in the U.S. market include Eli Lilly’s rising tirzepatide franchise. Otherwise, Novo’s IP is iron clad in the country, the analysts suggested.
“Today’s approval, while notable, does not meaningfully change how we think about current revenue expectations for Novo in 2026 at this time.”
