Compounding pharmacies aren’t surrendering their ability to create cheaper knockoff versions of Eli Lilly and Novo Nordisk’s weight loss drugs without a fight.
In response to the FDA declaring on Friday that the shortage for Novo’s blockbuster GLP-1 treatments Ozempic, approved for diabetes and Wegovy, which has a license in obesity, was over and that compounders would have to stop producing them in the next 60 to 90 days, an organization which backs the pharmacies has filed a lawsuit (PDF) in U.S. District Court in Fort Worth, Texas.
The complaint alleges that the U.S. regulator is “dismissing evidence that the shortage persists,” in removing the drugs from its shortage list “without notice-and-comment rulemaking.”
It is the second lawsuit filed in the same court from the Outsourcing Facilities Association (OFA) and Texas-based FarmaKeio Superior Custom Compounding.
In October, in a complaint that is still pending, they sued the FDA after it removed Lilly’s tirzepatide—the main ingredient in its diabetes and obesity blockbusters Mounjaro and Zepbound—from its shortage list.
That complaint bore most of the same language as the new one, referring to the FDA’s “reckless and arbitrary decision—lacking any semblance of lawful process.”
Compounders have been permitted to manufacture copycat versions of Novo’s semaglutide and Lilly’s tirzepatide since 2022 when the FDA declared that both were in shortage. In October, when Lilly notified the agency that it could meet the demand for Mounjaro and Zepbound, the FDA removed them from the shortage list, triggering the first OFA and FarmaKeio lawsuit.
With compounded treatments cheaper and easier to access, particularly online, they have surged in popularity as demand for the treatments has skyrocketed. With many insurance companies balking at providing coverage, patients have turned to the less expensive alternatives to the branded drugs.
Another association that supports the industry, the Alliance for Pharmacy Compounding (APC), has stopped short of suing the FDA.
“Compounding pharmacists have long known that this shortage had a shelf life,” Scott Brunner, the CEO of the APC said (PDF) in a release.
Brunner also praised the regulator for giving compounders an “off-ramp,” to halt production. The FDA will allow nationally licensed outsourcing facilities to continue to produce semaglutide until May 22 of this year, while state-licensed compounders must cease production by April 22.
In his statement, Brunner added that there will be “sticker shock for many,” as they turn to branded medications.
Also giving in is telehealth company Hims & Hers, which said in a quarterly earnings presentation on Monday that it will stop providing compounded semaglutide at the end of the first quarter.
With the announcement, Hims & Hers’ share price had plummeted by 27% by mid-morning on Tuesday. Boosted by sales compounded semaglutide, the company reported annual revenue of $1.5 billion, which was a 69% increase from 2023.
Since Friday’s FDA ruling—and after getting an additional bump from the Hims & Hers’ announcement—Novo’s share price has increased by 10%.
Earlier this month, Hims & Hers stirred controversy with an ad during the Super Bowl in which it criticized the U.S. healthcare system which “keeps us sick and stuck,” while profiting off the obesity epidemic. The ad follows with a promotion of the company’s own weight-loss treatments.