Glucagon-like peptide-1 agonists, a class of medications known as GLP-1s, have grown in popularity, initially for the treatment of type 2 diabetes and more recently for obesity and other labeled and off-label indications for use. GLP-1 is a hormone that helps regulate blood sugar levels and slows stomach emptying. GLP-1 receptor agonists are medications that mimic the effects of the naturally occurring physiological hormone GLP-1. These branded prescription pharmaceuticals – approved by the Food and Drug Administration – are so popular and in demand that pharmaceutical manufacturers could not keep up with production.
Ozempic®, manufactured by Novo Nordisk, was the first semaglutide-based GLP-1 to enter the market, introduced in 2017 following FDA approval for treatment of adults with type 2 diabetes. Wegovy® (the same drug as Ozempic rebranded for an obesity indication) was approved in June 2021 for chronic weight management in obese/overweight adults with at least one weight-related condition. Some strengths of these drugs were first added to FDA’s Drug Shortages list in March 2022 (Wegovy®) and August 2022 (Ozempic®). On February 21, 2025, semaglutide was taken off the shortage list.
Mounjaro®, Eli Lilly’s diabetes GLP-1, entered the market in May 2022 and quickly became a competitor to Ozempic®. Zepbound® (the same drug as Mounjaro® but rebranded for an obesity indication) was later approved in November 2023 for weight management. These drugs contain a complex active ingredient molecule called tirzepatide, which targets GLP-1 and other hormone receptors. After consumer/patient demand was unable to be met by Eli Lilly, some strengths of Mounjaro® and Zepbound® were placed on FDA’s shortage list. On December 19, 2024, tirzepatide was taken off the shortage list.
FDA’s Drug Shortages List
FDA’s shortage list is based on FDA’s frequent tracking of information received from pharmaceutical manufacturers about their ability to meet the market need. Pursuant to the federal Food, Drug, and Cosmetic Act (“FDCA”), FDA is required to maintain an up-to-date list of drugs that are determined to be in shortage. This list is required to identify the name of the drug, each manufacturer, the reason for the shortage and the estimated duration.
When a drug is placed on the shortage list, Congress permits FDCA § 503A state-licensed compounding pharmacies and § 503B outsourcing facilities to prepare compounded drug products which are “essentially a copy” of the FDA approved drug, particularly its active ingredient. Because compounders are subject to less oversight than drug manufacturers, and often due to intellectual property protections, this type of compounding is only permitted while a shortage persists. Thus, once Mounjaro® and Zepbound® were placed on the “shortage list,” Eli Lilly essentially, but temporarily, lost its exclusive right to manufacture and sell tirzepatide products.
Consequently, to meet the demand, compounding facilities and pharmacies were allowed to compound copies of these FDA-approved drugs through FDA’s enforcement discretion policy. FDA retains the right to enforce regulation in the future if unpredicted risks emerge for these product categories but unless/until they do, these compounded products essentially become unregulated by FDA because, as unapproved versions, they do not undergo FDA’s review for safety, effectiveness and quality before they are marketed. For example, a 503A compounding pharmacy does not need to attest to their manufacturing practices according to Current Good Manufacturing Practice (cGMP).
FDA has received multiple reports of adverse events, some requiring hospitalization, that may be related to dosing errors associated with compounded injectable semaglutide products. These dosing errors resulted from patients measuring and self-administering incorrect doses of the drug, and, in some cases, health care professionals miscalculating doses of the drug. As of Feb. 28, 2025, FDA has received more than 455 reports of adverse events with compounded semaglutide and more than 320 reports of adverse events with compounded tirzepatide. Moreover, in connection with the supply shortage, many counterfeits became available online without a prescription and flooded the market, often made abroad and/or without any state licensure, oversight or regulation. There are reports that nearly half of online pharmacies offering GLP-1 medications may be operating illegally and/or failing to meet quality standards.(1)
District Court Decision on the End of Tirzepatide Shortage
The lawful compounding of tirzepatide drugs was coming to an end when on October 2, 2024, FDA announced that the nearly two-year-long shortage of tirzepatide had ended. FDA concluded that “[Eli] Lilly’s] supply is currently meeting or exceeding demand for these drug products, and that [Eli] Lilly] has developed reserves that it now holds in its finished product inventory, plus significant units of semi-finished product.”(2) In making its determination, FDA reviewed data regarding the production and inventory of drug products at “various points in time,” cumulative quantities supplied to and demanded by customers in 2024, projected demand and supply in future months and wholesaler inventory data.
Five days later, the Outsourcing Facilities Association (“OFA”) filed a lawsuit in the United States District Court for the Northern District of Texas, Fort Worth Division, seeking an injunction and stay of FDA action. The lawsuit alleged that FDA was abruptly depriving patients of treatment. OFA argued that FDA made its decision to remove tirzepatide from the shortage list based only on statements from the manufacturer, without notice to compounding facilities and without rationale. Moreover, OFA argued that FDA was ignoring evidence that tirzepatide shortage still existed, and that the FDA only looked at the total supply and demand, rather than month-to-month data.
FDA argued that while the process to remove a drug from the shortage list may not be as perfect as the OFA would like, FDA has been tasked by Congress with maintaining an “up-to-date” list of drugs determined to be in shortage. As such, a meaningful notice process that the OFA seeks is simply not possible. Forcing FDA to proceed through a notice process would delay the FDA’s ability to keep the shortage list “up-to-date.”
Surprisingly, despite the unclear requirements surrounding the FDA’s shortage list, this lawsuit was the first time the question of FDA’s classification for the addition or removal of a drug on the shortage list has been raised or answered. In fact, in the court’s decision, Judge Mark T. Pittman noted that the regulatory scheme as to this process is “seemingly silent as to what procedure the FDA must use to make its shortage determinations.” (Outsourcing Facilities Association et al v. Food and Drug Administration et al, 4:25-cv-00174 (N.D. Tex.))
The FDA’s website does not provide any clarity either. The FDA.gov website merely states that “a shortage is considered resolved when FDA determines that supply is no longer exceeded by demand or projected demand.”
Judge Pittman ruled that despite the unclear FDA procedure as to the regulatory processes, given constant fluctuation in national supply and demand for a given drug, a notice requirement would delay the data as to the availability of the drug by at least 30 days. The court ruled that delaying updates to the shortage list by more than one month would lead to “stale information” that would not be “up-to-date,” as Congress mandates. The informal nature of this FDA shortage list process allows the FDA to act in a manner of days. As such, FDA can continue the informal adjudication process to determine what drugs should be placed on, or taken off, the shortage list.
What This Means for Drug Manufacturers
Now that tirzepatide has been removed from the shortage list, Eli Lilly is once again protected by statutory exclusivity for its flagship branded products, and the FDA is prohibited by law from accepting a New Drug Application or abbreviated NDA for any compounded tirzepatide product from any company other than Eli Lilly until June 2027.(3)
Eli Lilly believes this exclusivity protects the public as it removes the possibility of unsafe unapproved drugs. Specifically, Eli Lilly states, “this decision marks the end of the road for mass compounding of risky, unapproved knockoffs that threaten the health and safety of Americans.”(4)
Deadlines to Stop Compounding Tirzepatide and Semaglutide
This ruling is obviously bad news for OFA and all U.S. compounding pharmacies that have been cashing in on the GLP-1 frenzy, as the FDA has reiterated the timelines for which it intends to take enforcement actions against compounders of these products. According to the FDA, state-licensed pharmacies/physicians compounding under section 503A of the FDCA should stop compounding tirzepatide immediately because the period of enforcement discretion has passed. Outsourcing facilities compounding tirzepatide under section 503B of the FDCA should have stopped compounding tirzepatide by March 19, 2025.
As for semaglutide, a separate lawsuit was recently filed by OFA related to FDA’s recent decision to remove semaglutide from the shortage list (Outsourcing Facilities Association et al v. Food and Drug Administration et al, 4:25-cv-00174 (N.D. Tex.)). That case similarly seeks to prevent the enforcement of the removal of semaglutide from the FDA shortage list, and is before the same judge, Judge Pittman. Per the FDA, compounding pharmacies have to cease compounding semaglutide by April 22, 2025 or until the district court’s decision, whichever is later, and 503B outsourcing facilities have until May 22, 2025 or until the district court’s decision, whichever is later.
Recent Case Law on Use of Trademarks to Market Compounded GLP-1 Drugs
In June 2024, Eli Lilly filed a complaint against medical clinics in the greater Seattle region and two physicians, alleging that defendants were offering compounded versions of tirzepatide and unlawfully using Mounjaro® and Zepbound® registered trademarks.(5) For example, the clinics’ website promoted “Seattle Zepbound Weight Loss Program,” but defendants were not dispensing real Zepbound®. Eli Lilly argued that these advertising practices were clearly directed to mislead patients into believing they were receiving the FDA-approved and regulated Mounjaro® and Zepbound®, when, in reality, they were receiving “unapproved, unsafe, and unstudied compounded drugs.” (Eli Lilly & Co. v. Alderwood Surgical Ctr. LLC, No. 2:24-cv-00878-LK (W.D. Wash. Oct. 9, 2024), ECF No. 28) On March 7, 2025, Eli Lilly survived a motion to dismiss as the Washington District Court judge ruled that the false advertising claim was not preempted by the FDCA. The case is due to go to trial in March 2026. This case is one of many filed by Eli Lilly and Novo Nordisk for using their trademarks to market compounded GLP-1 drugs.
For the future, compounding facilities and pharmacies should keep a watchful eye on the FDA’s shortage list. There are currently 107 drugs or active ingredients listed on the FDA shortage list.
In general, according to the FDA website, FDA recognizes there may be circumstances where an outsourcing compounding facility may not be able to predict when a drug shortage will be resolved, and the facility may have orders for a compounded drug in-house that were in progress when the drug was removed from drug shortage list. Therefore, FDA policy provides flexibility when an outsourcing facility fills orders received while the drug was in shortage. However, the agency may take action if an outsourcing facility continues to fill new orders after the drug is removed from shortage list, or if it continues to fill existing orders more than 60 days after the drug has been removed from FDA’s drug shortages list.
As a reminder, federal law prohibits compounding pharmacies from engaging in “anticipatory compounding” (compounding before the receipt of a prescription for an identified individual patient) except in “limited quantities” under certain circumstances. New York, New Jersey, Massachusetts, Connecticut, and most states prohibit pharmacies from sterile compounding for office use.
The prohibition against compounding “essentially a copy of a commercially available drug product” does not apply to drug compounds with “a change, made for an identified individual patient” as requested by the prescriber, which makes “a significant difference” for the patient.(6) It remains to be seen if this “significant difference” exception under 503A can be applied to compounded semaglutide and tirzepatide.
[1] Ashraf AR, Mackey TK, Schmidt J, et al. Safety and risk assessment of no-prescription online semaglutide purchases. JAMA Netw Open. 2024;7(8):e2428280. doi:10.1001/jamanetworkopen.2024.28280
[2] U.S. Food & Drug Administration, “Declaratory Order: Resolution of Shortages of Tirzepatide Injection Products (Mounjaro and Zepbound)”, December 19, 2024. https://www.fda.gov/media/184606/download#:~:text=We%20conclude%20that%20the%20information,meet%20or%20exceed%20projected%20demand.
[3] Outsourcing Facilities Association, et al. v. United States Food and Drug Administration, et al. No. 4:24-cv-00953-P (N.D. Tex.)
[4] Weixel, Nathan, “Federal judge stops compounded copies of Eli Lilly weight loss, diabetes drugs” The Hill, March 6, 2025 https://thehill.com/policy/healthcare/5181343-court-ruling-compounding-pharmacies-fda-tirzepatide/
[5] Eli Lilly & Co. v. Alderwood Surgical Ctr. LLC 2:24-cv-00878-LK (W.D. Was., Mar. 7, 2025).
[6] FDCA Section 503A(b)(2).
