The Battle for Rights to Sell Weight Loss Drugs

If you have been using the popular diabetes and weight-loss drugs Ozempic/Wegovy and Mounjaro/Zepbound, take note! You could be affected by the fight that’s looming between BigPharm and the Compounding Pharmacies over the latter continuing to supply look-alike versions of these drugs. Right now, the FDA appears to be backed into a corner. It has issued some conflicting statements. At first, they supported BigPharm’s demand to turn off the tap on compounded versions. More recently, the announcements pulled back somewhat and said that the matter is under review, and supplies can continue to flow. 

There have been dynamic changes in the landscape of the new GLP-1 medications that have repainted the scenario for both diabetes patients and people seeking help to shed excess weight. Through it all, IsraelPharm has focused on offering what our customers want and need. We have been able to maintain solid supplies of the labeled drugs and also offer access to the compounded versions of the drugs, thanks to our relationships with major US compounding pharmacies.

To explain the complex situation, we need to take a step back and outline how the battle started. 

Where’s the beef?

Pharmaceutical companies must invest hundreds of millions of dollars in research and testing new medications. The only way they can be sure of achieving any degree of profitability is to have proprietary rights allowing them to be the only ones able to sell the product for a guaranteed number of years. Without this protection, an outsider could simply jump onto the wagon once the hard work had been done and start to compete for a share of the market. This would very quickly disincentivize the whole process of research into new medicines – obviously to the detriment not only of the original developers but of the public at large.

When the developers of Ozempic (Novo Nordisk) and Mounjaro (Eli Lilly & Co.) got the FDA’s approval to market their drugs for treatment of type 2 diabetes (Ozempic in 2017, Mounjaro in 2022), they were given exclusive rights until at least 2032 and 2036 respectively. This means all these drugs must be sourced from their respective patent holders. It also meant that the companies could set whatever price they deemed fit since competition is impossible.

What are the legal obligations for patent protection?

To retain the protection the companies are granted, they have to be able to satisfy consumer demand completely. The company is obliged by law to notify the FDA if there is a shortage of life-saving drugs or drugs that treat debilitating illnesses (such as type 2 diabetes). In turn, in the event of prolonged shortages, the FDA can invoke section 356c of the Federal Food, Drug, and Cosmetic Act (FD&C Act) to permit bulk production of an equivalent of the drug by a compounding pharmacy (of the type 503B).

In the space of just a few years, two totally unforeseen developments hit the whole world. Each one of these developments had profound effects on the position of these drugs, and in combination, they became what we have called a perfect storm—a tsunami wave—that washed away all the factors that would otherwise have set the patterns for expected behavior in this part of the market.

A brief history of the tsunami.

Two unconnected but simultaneous changes loomed up and completely disrupted the ability of the two companies to meet market demand:

First, the coronavirus pandemic severely disrupted supply chain movement, reduced the factory’s workforce availability, and required the companies to switch their focus away from routine drug production to finding, manufacturing, and distributing vaccines that could address this worldwide danger. All resources switched over within a few months to satisfy the calls for immediate relief from the devastation caused by the virus.

Next, the discovery of the beneficial side effects that these two medications gave in producing remarkable weight loss in the thousands of patients who were being treated with them for type 2 diabetes led to a totally unforeseen surge in demand from the millions of people worldwide who were looking for solutions to their problems with weight management. The drug companies planned for a proportional share of the population that needs diabetes treatment (at most, 5-10% of the adult population). Suddenly, they were getting orders to satisfy the needs of four or more times as many people – literally hundreds of millions. This was way outside the boundaries of what they could produce with their existing production facilities. It also was far beyond their capacity to expand production lines or build new factories within any reasonable timeframe.

Within a matter of months, the demand for Ozempic and Wegovy completely outstripped the manufacturer’s capacities, and both drugs were placed on the FDA’s list of drug shortages in 2023. This then allowed many 503B compounding pharmacies to start offering their own versions of the two drugs. We at IsraelPharm have been able to provide these products alongside our good supply of the proprietary lines, and we have written extensively about the practice of compounding, and about the alternative that Compounded Semaglutide offers when Ozempic or Wegovy is in short supply, or Compounded Tirzepatide offers when Mounjaro or Zepbound are not freely available.

There are other reasons why patients in the US were looking to substitute compounded medications for the patented versions. The table below shows the list prices from retail pharmacies for the drugs sourced from the license holders. They are much higher than the costs when the equivalent compounded medication is bought:

Note: Prices are correct as of October 15 but can change over time. IsraelPharm does not sell Zepbound, the weight-loss version of Mounjaro, but we can supply a compounded version of tirzepatide. 

The start of the battle – Eli Lilly vs Compounding Pharmacies

At the beginning of October 2024, Eli Lilly and Company requested that their products be removed from the shortage list and informed the FDA that there was no longer a shortage. (Mounjaro had been on the shortage list since late 2022, while Zepbound was added in April 2023.) The release of an announcement by the FDA that the drugs were no longer on the list led to an immediate cancellation of the flow-on that gave 503B compounding pharmacies the ability to offer compounded tirzepatide products for sale, and they had to stop producing.

War is declared by the Compounding Pharmacies

Within a few days, a consortium of 503B compounding pharmacies sued the FDA. According to the respected trade journal pharmalive.com, a group of FDA-registered compounding pharmacies filed a complaint that alleged that in declaring the end of the tirzepatide shortage, the regulator had made a “reckless and arbitrary decision that lacked any semblance of lawful process.” The group also said the regulator’s announcement could potentially “deprive patients of a vital treatment for type 2 diabetes and obesity.”

A ceasefire, a truce, or drawing breath for another round?

On October 14, 2024, the FDA announced that it would reconsider the move to take tirzepatide off its shortage list while it conducts another review into the availability of the drug. In the meantime, compounders can continue selling their own versions of the blockbuster drug. The FDA said in a court filing that it would conduct another review to assess the supply status of tirzepatide better and more accurately determine whether the drug is indeed in shortage. The move is a significant victory for compounding pharmacists. It also means that patients relying on supplies of their essential meds from sources other than the registered manufacturers still can’t get a reliable stream of the labeled drugs. They are left in limbo as to whether the tirzepatide shortage was resolved. 

IsraelPharm to the rescue!

Situated outside the US, we have built up supply chains with reliable manufacturers in many countries over our 15+ year history. This has enabled us to keep on supplying Ozempic and now Wegovy, sourced from Novo Nordisk, all through the worst years of the tsunami. Now, we can do the same for Mounjaro, made by Lilly. 

The most crucial difference is that we now reliably stock and supply genuine Ozempic, Wegovy, and Mounjaro in all strengths at prices that very closely match the cheapest offerings of the compounding pharmacies. There’s no need to keep a close eye on the battle between the manufacturer, the compounding pharmacies, and the FDA. Whatever the outcome, you can get a steady supply of your essential medications at prices you can better afford, when you buy them from IsraelPharm.

We are looking forward to your orders and are happy to answer any questions you may have about this complex issue.