Weaponizing Section 1498 Against GLP-1 Manufacturers

Authored by: Sriram Chakravadhanula

Art by: Carol Zhang

In March 2024, the U.S. Food and Drug Administration (FDA) approved GLP-1 medication for heart disease, in addition to its application for diabetes, leading to a massive increase in GLP-1 users. The United States became the largest market for Ozempic and Wegovy supplier, Novo Nordisk, with over 71% of the Company’s drug sales come from the United States[1]. As Senator Warren revealed, Ozempic is priced at $936 in the US, compared to a mere $93 in the UK [2]. Wegovy, Mounjaro, and Zepbound show similar trends. Considering the demand for the drug in the United States and its considerable ability to positively impact the health of its citizens, should the federal government apply U.S. Code 28 Section 1498 to take control of the manufacturing of GLP-1? 

Context:

GLP-1 medications imitate the natural hormone glucagon-like peptide-1 (GLP-1) and help regulate blood sugar and appetite [3]. While it was initially a medication to treat Type II Diabetes, its ability to reduce appetite resulted in drastic weight loss in patients. This appealed to the public as it was a quick and easy way to lose weight, even among individuals without diabetes. Novo Nordisk, a Danish company, holds the patent for semaglutide, the active ingredient in Ozempic and Wegovy. Eli Lilly, a U.S.-based company, holds the patent for Tirzepitide, the active ingredient in Zepbound and Mounjaro. Together, these two companies have filed many patents and effectively monopolized the market for GLP-1s. Patent expiration differs from country to country. For instance, the Ozempic Patent expires in 2026 in China, but is projected to expire in 2031-2041 in the U.S. As other countries begin to mass-produce cheaper alternatives, the U.S. can expect to face even greater price pressure from the companies unless it takes action.

What is Section 1498?

Concisely, U.S. Code 28 Section 1498 allows the federal government to use a patented invention “without license of the owner thereof or lawful right to use or manufacture the same… for the recovery of his reasonable and entire compensation for such use and manufacture” [4]. In essence, the U.S. government can manufacture the patented product without permission from the patent owner, provided fair financial compensation.

This is not a novel idea. It is reasonable to presume that there exists a mechanism through which the federal government can take control of the production of patented technology, especially in dire cases. For example, in 2001, the United States invoked Section 1498 to take control of the patent for a lead-free bullet to reduce soldier exposure to lead [5]. Section 1498 has been discussed and utilized to help the citizens of the country, especially in times of war or pandemics. The rise of GLP-1’s, however, is neither a war nor a pandemic, inciting the controversy of whether to apply the statue. 

Advantageous Past Application

Invoking this statute has severe repercussions on the patent holder. While initial monetary or supply-chain compensation may be given from the government, the lost revenue from the U.S. subsidizing mass production is nearly unquantifiable. Therefore, past instances show that the mere threat of invoking Section 1498 has created change. 

In the 2010s, a new drug called Sofosbuvir hit the market to help combat hepatitis C. Its cost forced States such as Washington and Louisiana to consider invoking Section 1498. Gilead Sciences, the patent holder, negotiated with these states to avoid government action [6]. Deals that allow increased access to ingredients, lower regulatory barriers, or costs can be good incentives for pharmaceutical companies to lower their prices. And example arrangement might include utilizing a subscription model, in which the state pays an annual lump sum to front load the stock, allowing for efficient distribution and accessibility. As the precedent suggests, similar negotiations remain a viable alternative to the invocation of Section 1498. 

Disadvantages of Section 1498

While lowering consumer prices is a huge advantage for invoking Section 1498, there are significant consequences for its application. Pharmaceutical companies rely on revenue not only to offset research and development costs, but also to fund new research. As Deputy General Counsel of Innovation Law at Bristol Myers Squibb, Henry Hadad said, “today’s revenue funds tomorrow's therapies. You can’t just look at one drug in a vacuum because you’ve got to look at the other 90% of drugs in your pipeline that did not make it” [6]. It is easy to look at the R&D costs of just GLP-1s and say that revenue far outweighs the cost, but there are thousands of projects that simply failed and still cost the company billions of dollars. Repeatedly applying Section 1498 may lead to a loss of innovation in cutting-edge areas, setting back important therapies that could save millions.

Conclusion

The question of whether to apply Section 1498 depends on the scale and necessity of the patented technology and whether it outweighs the consequences faced by pharmaceutical companies. Considering that one in eight adults use GLP-1s and more than half of users find it difficult to afford the cost, it becomes clear that the magnitude of impact necessitates action [7]. With Medicare and Medicaid removing coverage, millions of Americans will suffer the loss of a critical product. State and federal governments should weigh the trade-offs carefully and continue negotiations with pharmaceutical companies to drive down the price, so that Americans can afford to get the life-saving medication they need.

References:

1. Walt, V. (2025, March 31). Ozempic and Wegovy pumped $26 billion into Novo Nordisk last year. Can the pharma giant find its next breakthrough before the boom ends? Retrieved from Fortune website: https://fortune.com/2025/03/31/ozempic-wegovy-novo-nordisk-nvidia/

2. Warren, E. (2024, October 9). Warren’s Letter to Federal Trade Commission [Letter to Lina Khan].

3. Antidiabetics -GLP-1 Agonists Background. (2022). Retrieved from https://www.hca.wa.gov/assets/billers-and-providers/antidiabetics-GLP-1-agonists.pdf

4. 28 U.S. Code § 1498 - Patent and copyright cases. (n.d.). Retrieved March 1, 2020, from LII / Legal Information Institute website: https://www.law.cornell.edu/uscode/text/28/1498

5. Group, P. (2016). Army Ammunition Goes Green and Infringement Free. Retrieved October 14, 2025, from The National Law Review website: https://natlawreview.com/article/army-ammunition-goes-green-and-infringement-free

6. Rai, A. (2021, November 8). Whether and How the U.S. Government Should Exercise Its Compulsory Licensing Authority Under 28 U.S.C. § 1498 and the Bayh-Dole Act - NYU Journal of Intellectual Property & Entertainment Law. Retrieved October 14, 2025, from NYU Journal of Intellectual Property & Entertainment Law website: https://jipel.law.nyu.edu/whether-and-how-the-u-s-government-should-exercise-its-compulsory-licensing-authority-under-28-u-s-c-1498-and-the-bayh-dole-act/

7. Expanding Access to Semaglutide through 28 U.S.C. § 1498. (2024, August 5). Retrieved October 14, 2025, from Public Citizen website: https://www.citizen.org/article/expanding-access-to-semaglutide-through-section-1498/