It’s official: Following the resolution of Eli Lilly’s tirzepatide shortage in October, the FDA has officially declared an end to the supply squeeze on Novo Nordisk’s diabetes and obesity counterpart semaglutide in the U.S.
The supply update likely spells the end of widespread GLP-1 compounding in the U.S., which became an immensely popular avenue for patients to access weight loss drugs while Novo and Lilly’s branded products were in shortage.
On Friday, the FDA reclassified the semaglutide shortage—which had covered multiple doses of Wegovy for obesity and Ozempic for type 2 diabetes—as "resolved" on its online drug shortage database.
Back in late October, the FDA revised its shortage list to note that all doses of Wegovy and Ozempic were available in the U.S., though the regulator stopped short of formally declaring the shortage over.
All semaglutide doses are now being “continuously shipped” to wholesalers and “meeting or exceeding expected U.S. demand,” Novo Nordisk said in a Friday press release. The company added that it’s running its production facilities 24/7 to keep up with demand, highlighting the billions of dollars it's spent adding to its capacity in recent years.
Given the FDA’s decision, making or selling compounded Ozempic and Wegovy is slated to become illegal under compounding laws, with rare exceptions, the Danish drugmaker warned in its release.
“No one should have to compromise their health due to misinformation and reach for fake or illegitimate knockoff drugs that pose significant safety risks to patients," Dave Moore, Novo’s EVP of U.S. operations and global business development, said in a statement.
The U.S. allows compounding pharmacies to manufacture close approximations of branded drugs when the reference drug is in shortage, though that leeway ceases to exist once supply issues are resolved.
Compounding pharmacies and telehealth companies have raked in enormous revenues in recent years filling the supply gap for Novo’s semaglutide and Lilly’s tirzepatide. Aside from often being easier to obtain for those seeking cosmetic weight loss, compounded GLP-1s typically come at a fraction of the cost of their branded counterparts.
Both Novo and Lilly have repeatedly pushed back against the practice, arguing that knockoff GLP-1s are not beholden to the same safety standards that govern branded drugs. Further, Novo in October pressed the FDA to include Wegovy and Ozempic on the agency’s Demonstrable Difficulties for Compounding (DDC) list, contending that the manufacturing process for the drugs is too complex to replicate safely.
During the Super Bowl earlier this year, telehealth company Hims & Hers—which itself offers compounded semaglutide—ruffled feathers with an ad dubbed “Sick of the System” that specifically took aim at the American weight loss industry by arguing that approved medications are “priced for profit, not patients.”
While the TV spot did not call out Novo Nordisk and Eli Lilly by name, the messaging was clear for many in the industry and beyond.
The day after the big game, Novo fired back with an ad in The New York Times and USA Today, which posed the question to potential compounding customers, “[d]o you really know what you’re injecting into your body?”
The “Check Before You Inject” ad went on to note that some vials of compounded semaglutide “have been found to contain dangerous impurities, banned substances, or incorrect doses.”
With the semaglutide supply rout concluded, Hims & Hers' stock was down more than 20% on Friday morning.
Broadly speaking, the supply update “starts the clock on having unfettered market access to the patented drug” for all GLP-1 compounders, analysts at Leerink Partners wrote in a note to clients Friday morning.
To hear compounding trade group the Alliance for Pharmacy Compounding (APC) tell it, "compounding pharmacists have long known that this shortage had a shelf-life" and have been prepping patients "for months" about that reality.
"We can argue about whether this resolution of the shortage is premature or not – indeed, the much more real-world ASHP shortage list continues to show both semaglutide and tirzepatide injection in shortage," APC's CEO, Scott Brunner said in a statement, referring to the American Society of Health-System Pharmacists, which maintains its own national drug shortage database separate from the FDA's.
"And I do question whether in resolving the shortage FDA has taken into account demand for the compounded drug – the number of patients who’ll need to be transitioned from compounded version to FDA-approved version," Brunner continued. "That’s likely hundreds of thousands of patients."
Even though Hims & Hers has been positioning itself to continue selling compounded semaglutide post-shortage through personalized doses, it’s now “critical” to understand the legal pathway the company will use to do so, the analysts said.
Hims & Hers is also likely to give an update on the situation when it reports earnings on Monday.
Editor's note: This story has been updated with a statement from the CEO of the trade organization Alliance for Pharmacy Compounding.