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Weight-Loss Revolution: How Compounding Pharmacies are Changing the GLP-1 Drug Landscape

Mike Cianciabella | October 3, 2024

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Weight-Loss Drugs: The Rise of GLP-1 Copycats

The Proliferation of Compounding Pharmacies

In recent months, the availability of weight-loss drugs like Eli Lilly’s Zepbound and Novo Nordisk’s Wegovy has surged, largely thanks to copycat versions produced by compounding pharmacies. These alternative options have become as easy to purchase as the latest tech gadgets, often advertised via social media from companies such as Hims & Hers Health, Ro, and Noom. Many consumers have found these compounded GLP-1s to be a more affordable solution, leading to a booming market. According to Noom’s CEO, Geoff Cook, over a million individuals may be using these knockoffs, with estimates from Citi Research suggesting that Hims & Hers alone could be reaching 100,000 users by year’s end.

Legal Framework Supporting Copycat Drugs

The rise of these GLP-1 weight-loss drugs is underpinned by federal regulations that allow compounding pharmacies to create versions of medications facing shortages as determined by the FDA. This situation is relatively rare for blockbuster drugs like those produced by Novo and Lilly, placing GLP-1s in an unusual legal and commercial position. Once the FDA concludes that the shortages are resolved, larger compounding entities will have a 60-day window to cease production, while smaller pharmacies will be required to halt immediately.

Scott Brunner, CEO of the Alliance for Pharmacy Compounding, expressed concerns about the potential fallout when the FDA lifts the shortage designation. Many patients currently utilizing these compounded drugs may find themselves without necessary therapies when the original versions become more readily available. “There’s going to be a mad scramble,” Brunner stated.

Telehealth Companies and Market Dynamics

The increasing popularity of telehealth platforms has also been pivotal in the proliferation of these compounded remedies. Companies like Noom have begun to advocate for continued access to affordable GLP-1 medicines, even after the recognized shortages are resolved. A recent campaign featured a full-page advertisement in the Wall Street Journal urging U.S. senators to support ongoing accessibility to weight-loss treatments. This highlights the balancing act between providing cost-effective solutions and the risk of patients reverting back to previous weight levels without their medications.

The price disparity between compounded drugs and their branded counterparts is significant. Novo’s Wegovy is priced at approximately $1,349 per month, while Noom offers its version starting at around $149. This substantial difference in expenditure has fueled the growing interest in compounded GLP-1s, a point emphasized in advertising campaigns promoting savings of up to 89% compared to branded medications.

Regulatory Scrutiny and Future Outlook

As the market continues to flourish, regulatory scrutiny is growing. During a Senate hearing in September, Senator Bernie Sanders confronted Novo’s CEO about the high prices of GLP-1 medications. Novo acknowledged ongoing discussions surrounding lowering drug costs, while their earnings from these medications have been projected to increase by 25% this year, following a similar trajectory next year.

As the FDA reviews whether the supply shortages of both Wegovy and Zepbound have been adequately addressed, compounded drug offerings continue to enter the market. Notably, the complicated regulatory environment surrounding compounded drugs complicates projections for future availability and pricing.

The Uncertain Future for Compounding Pharmacies

Compounding pharmacies have historically focused on personalized medication solutions, addressing specific patient needs rather than competing with major pharmaceutical brands. However, the explosive interest in GLP-1 medications has forced a dramatic shift within the industry.

With telehealth companies like Hims & Hers and Ro entering this space, some executives argue that these platforms provide essential services to patients who otherwise may face barriers to access. Despite assurances regarding safety and reliability, health organizations have cautioned against the use of unapproved compounded versions of GLP-1 drugs, which do not carry the same guarantees of quality and effectiveness as their FDA-approved counterparts.

Potential Consequences for Patients

While the growth of the compounded GLP-1 market has benefitted numerous patients seeking weight loss solutions, it has created a precarious situation. If the FDA enforces regulations that demand the cessation of compounded treatments upon lifting the shortage designation, many patients may be abruptly forced to pivot back to branded medications, which may not be covered by their insurance plans.

The FDA has approved Wegovy for patients with a BMI as low as 27, but many insurers have established higher BMI thresholds that must be met for coverage eligibility. This reality underscores the necessity for a sustainable mechanism that would allow ongoing access to affordable weight-loss drugs, a pivotal issue as the market sees significant changes.

Conclusion

The landscape of weight-loss drugs, especially those leveraging GLP-1 technology, is evolving rapidly. While the emergence of affordable compounded alternatives has undoubtedly filled a significant gap for many patients, the future remains uncertain. Balancing effective patient care and equitable access with the overarching regulations and market dynamics will be critical as the industry navigates this complex terrain.