GLP-1s: Life after FDA enforcement returns

Business Journals

a day ago

Unless you've been living on another planet over the past few years, you have heard of and probably know several people that are taking glucagon-like peptide-1 drugs or GLP-1s. These revolutionary drugs, originally developed for type 2 diabetes, have become the pharmaceutical industry's most sought-after innovation thanks to their weight-loss benefits. Brand names include Ozempic® and Wegovy®, which are based on semaglutide and owned by Novo Nordisk, and Mounjaro® and Zepboud®, which are based on tirzepatide and owned by Eli Lilly. Their commercial trajectory is unparalleled with $52 billion in global sales in 2024, $64 billion predicted for 2025, and $130 billion per year expected by 2030. Humira, the best selling drug of all time won't come close to these as it has 'only' generated around $250 billion since 2003 and is expected to generate another $9-10 billion per year for the foreseeable future. However, the road to this commercial success has been one of the more interesting ones as it has brought up FDA, patent, national, and international issues.
These issues began in March of 2022 for semaglutide GLP-1s and in December of 2022 for tirzepatide GLP-1s when the FDA listed each of them on the drug shortage list. Inclusion on the drug shortage list means that the FDA has determined that the demand for a specific drug exceeds its supply and that shortage has a significant impact on public health. During the time a drug is on the shortage list, the FDA does not generally institute any enforcement actions against compounders that are making copies. Once compounders were free to make compounded versions of GLP-1s, demand surged even higher as compounders began offering these drugs. Costs to consumers plummeted from $1000/month or more for the brand name drugs to $150/month or less for the compounded versions. Overnight, an entire cottage industry was born. However, this all came crashing to a halt when the FDA declared the shortage over, thereby ending its enforcement discretion. The FDA provided a phaseout period for the compounded drugs and their compounding facilities based the drug, semaglutide or tirzepatide, and the type of compounding pharmacy. The phaseout for all of the drugs and pharmacies ended on May 22, 2025. Thus, in order for compounders to continue offering these drugs, they must be presented with a valid patient-specific prescription to prepare the medications and the medications they compound must be tailored to that individual's specific needs that prevent them from taking the brand-name version.
Novo Nordisk and Eli Lilly wasted no time notifying compounders that they must cease compounding these drugs. Eli Lilly filed suits against some of the larger compounding pharmacies, Empower Pharmacy and Strive Phramacy in April 2025. These suits were filed under the Lanham Act, based on the alleged illegal compounding of tirzepatide mixed with additives like vitamin B12 and glycine and thereby misleading customers into believing these products were FDA-approved. Compounders either continued to add or began adding these ingredients in order to fall under the exceptions for compounders based on the patient's specific needs. Novo Nordisk began working with Hims and Hers Health, Inc in April after the shortage for Wegovy® was declared over. This agreement was terminated in June 2025 when Novo Nordisk alleged that Hims and Hers was not complying with the law which prohibits mass sales of compounded drugs under the false guise of "personalization" and are disseminating deceptive marketing that put patient safety at risk. Novo Nordisk is also investigating additional compounders and telehealth providers for deceptive marketing based on this 'personalization' exception.
With respect to the patent issues at play, Novo Nordisk has patents on semaglutide in the U.S. and most of the world that last until 2033 while Eli Lilly's tirzepatide U.S. and worldwide patents don't expire until 2036. However, generic versions of semaglutide are on the near term horizon. How you might ask? Well, Novo Nordisk failed to pay their patent maintenance fee in Canada in 2020. This means that the patent in Canada officially expired in 2020 but has been protected under Canadian laws governing data exclusivity which prevent generics from copying the drugs until January 4, 2026. Major generic-producing companies like Sandoz and Dr. Reddy's have already announced that they will be launching generic versions of semaglutide in 2026. The impact on consumers in Canada will be felt almost immediate. Additionally, consumers in the U.S. stand to benefit from the availability of generic semaglutide as the FDA generally turns a blind eye to individuals in the U.S. receiving their medications from Canada. Thus, the result of their failure to pay this maintenance fee will extend beyond Canada into semaglutide's largest commercial market.
All in all, the market for GLP-1s has changed significantly since the FDA declared their shortages over. Most U.S. compounders have now ceased large-scale GLP 1 production. However, some continue to operate under state pharmacy boards or under legal protest, challenging the FDA's interpretation of "commercially available" in compounding laws. In a sense, they contend that the demand is still higher than Novo Nordisk and Eli Lilly can address. How this will play out legally remains to be seen.
Sandberg Phoenix is a full-service law firm specializing in business, business litigation, health law, products liability, and intellectual property.
Tracey joined Sandberg Phoenix as a shareholder in 2023, and is Practice Group Leader of the Intellectual Property practice group. With over 25 years of experience in intellectual property law, Tracey serves clients of all sizes across industries including biotechnology, agribusiness, food, health care and life sciences. He counsels clients on patent, trademark, and copyright acquisition, licensing, enforcement issues, due diligence, prosecution, litigation and other general business matters.