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- Connecticut wants to make generic GLP-1s. Will RFK Jr. lend a hand?</p>
<p>Anjalee KhemlaniJuly 16, 2025 at 12:56 AM</p>
<p>Connecticut passed a new law last week in an effort to lower its spending on weight-loss drugs for its state insurance program — HUSKY Health, which includes Medicaid and CHIP enrollees — and it could help other states do the same if it succeeds.</p>
<p>The bill, signed by Gov. Ned Lamont on July 8, focuses on efforts to control drug prices but has a section dedicated to generic GLP-1 drugs, similar to Novo Nordisk's (NVO) Ozempic and Wegovy and Eli Lilly's (LLY) Mounjaro and Zepbound. Combined, the four drugs have been ballooning the state's spending — contributing costs of $140 million in fiscal year 2024 — a problem plaguing many states.</p>
<p>Some states have chosen to restrict or limit who can be prescribed the drugs, while others have stopped covering them altogether. Connecticut expanded coverage in 2023.</p>
<p>Pro generics: Connecticut Gov. Ned Lamont (Aaron Flaum/Hartford Courant/Tribune News Service via Getty Images) (Hartford Courant via Getty Images)</p>
<p>The new law calls for the Commissioner of Social Services to petition the US Health and Human Services Department (HHS) Secretary Robert F. Kennedy Jr. to exercise the federal government's right to own the patents of GLP-1s and contract with generic manufacturers to produce a version of the drugs in exchange for royalties that Connecticut says it will pay.</p>
<p>"The commissioner may enter into a consortium with officials in other states in contracting with such manufacturer for such drugs," according to the state's new law.</p>
<p>State Sen. Matt Lesser, who introduced the bill, told Yahoo Finance that other states, both red and blue, have already expressed interest. He said the state has 30 days to submit the petition.</p>
<p>"The governor and Sec. Kennedy have known each other for a very long time. So I don't know what conversations they may or may not have had. But, I think we're also having some early conversations," Lesser said of the state's social services commission.</p>
<p>HHS did not reply to a request for comment from Yahoo Finance. Novo Nordisk declined to comment for this article.</p>
<p>Eminent domain</p>
<p>The power to claim ownership of the patent comes from a section in the US Patent Code, 28 US 1498, which is described by experts as similar to eminent domain. If RFK Jr. accepts Connecticut's request, the drugmakers would be compensated based on a benchmark closer to production costs, not to market rates, according to Robin Feldman, a professor of law and director of the Center for Innovation at the University of California, San Francisco.</p>
<p>"So recent cases are royalties of 10% or 7.5%," Feldman told Yahoo Finance.</p>
<p>Lamont, meanwhile, signaled caution when signing the bill last week.</p>
<p>"While well-intentioned, this provision may present an overreach of Section 1498, which was intended to provide a remedy for patent holders for when the federal government uses patented inventions for its own purposes," he said. "The administration will work collaboratively with the industry, healthcare professionals, and advocates to ensure that provision is implemented as appropriate under federal law."</p>
<p>The strategy faces some uncertainty, but it could be coming at just the right time, according to some experts.</p>
<p>Sweet spot</p>
<p>Connecticut's effort comes as prices have begun to ease in the wake of increased supply from drugmakers Novo Nordisk and Eli Lilly. Both are offering vials at cheaper prices than injectables in direct-to-consumer avenues to counter the massive compounding market.</p>
<p>Former Novo Nordisk CEO Lars Jørgensen previously told Yahoo Finance that the compounding market is "approximately as big as our own business."</p>
<p>Compounders were initially allowed to provide the copycats without FDA approval when the drugs were in short supply. The FDA has since ended the shortages, but some compounders continue to produce the cheaper copycats, claiming they have protections for "personalized medicine." That debate is making its way through the court system and is currently in the Fifth Circuit Court of Appeals.</p>
<p>Lesser said Connecticut considered compounding but wasn't comfortable with the lack of FDA approval for the products.</p>
<p>In addition to lower prices, Novo Nordisk's drugs are facing the end of their exclusivity period, which is regulated by the FDA. This is separate from the patents protected by the US Patent Office. While the patents expire in 2031, the FDA exclusivity has already partially expired for semaglutide in recent years</p>
<p>On top of all that, generic competition is already on the horizon in Canada, which means a manufacturer is currently setting up production and getting approval from a comparable regulatory body to the FDA, according to Rachel Sachs, a professor of innovation policy and patent law at Washington University in St. Louis.</p>
<p>That could also be useful if states decide to import from Canada — and would be quicker than the FDA process to contract with a US-based facility.</p>
<p>"So this is a sort of sweet spot for those products, where it would be a particularly impactful time for the (patent) law to be used," Sachs said.</p>
<p>Will he help Connecticut get into the generic GLP-1s business? Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. and US Secretary of Agriculture Brooke L. Rollins in Washington. (Michael M. Santiago/Getty Images) (Michael M. Santiago via Getty Images)Battles for lower prices</p>
<p>The law Connecticut wants HHS to invoke has been used in the past.</p>
<p>In 2017, Louisiana invoked the same law to try to get Hepatitis C drugs at a lower cost. At the time, more than 35,000 Medicaid enrollees using the drugs were costing the state $764 million. The drugmaker, Gilead Sciences (GILD), ultimately struck a deal with Louisiana to implement an "innovative payment model," which capped the state's costs.</p>
<p>And post-9/11, when there was an anthrax scare, the US government invoked the law to stockpile Bayer's (BAYRY) drug Cipro. Bayer ultimately agreed to lower its price.</p>
<p>Recently, North Carolina tried a different strategy by leveraging its relationships with Novo Nordisk and Eli Lilly, which had manufacturing operations in the state last year. It was unsuccessful and had to cut coverage for state employees while keeping coverage for Medicaid beneficiaries. The state petitioned HHS and then-Secretary Xavier Becerra to negotiate lower prices on its behalf but stopped short of invoking the patent law, though some advocacy groups suggested it at the time.</p>
<p>It's why experts and advocates are closely watching how RFK Jr. responds to this petition.</p>
<p>But so far, the Trump administration has made no progress in its efforts to curb costs, according to Amy Kapczynski, a professor at Yale Law School and expert on intellectual property rights.</p>
<p>"The Trump Administration has been weak in addressing drug pricing as a problem, undermining some of the gains of the recent Biden bill to lower drug prices for Medicare," she told Yahoo Finance. "They may not want to do this, and argue that they can't — but really, I see it as a question of political will."</p>
<p>UCSF's Feldman echoed a similar sentiment, adding that the situation could end well for the drugmakers too.</p>
<p>"There should be a deal to be made that provides very handsome returns for the companies who have brought (these drugs) to society, but in a way that's sustainable and doesn't break the bank," she said.</p>
<p>But others, like Polk Wagner, a law professor and deputy dean at the University of Pennsylvania, say it is unclear if the government would be willing to deploy this strategy.</p>
<p>"This is most likely a negotiation tactic. As a general matter, the federal government is, rightly, very reluctant to actually use this tool. It's a real undermining of the patent system," he told Yahoo Finance.</p>
<p>In addition, its unclear how much money would be saved through this route, he said.</p>
<p>In a statement to Yahoo Finance, Eli Lilly reflected the patent concerns.</p>
<p>"Lilly is closely following the developments in Connecticut and other measures that could endanger the integrity of the U.S. patent system. Intellectual property protections are essential to incentivizing the costly investment and risk required to develop new medicines," the company said.</p>
<p>—</p>
<p>Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, provider services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem.</p>
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