FDA to Reassess Shortage Status of Key Obesity Drugs; Compounding Stocks Out of the Red—for Now

The FDA has decided to review its earlier removal of Eli Lilly’s tirzepatide from its shortage list. Compounding pharmacies will continue producing versions of the drug during this review. This marks a significant shift in the FDA’s previous stance. Given this, the rising demand for GLP-1 weight loss drugs is creating significant insulin shortages for users worldwide. With Novo Nordisk recently discontinuing a product, patients in the U.S. and other countries are struggling to find essential insulin supplies. The diabetes community is increasingly concerned that insulin manufacturers are losing interest in producing the life-saving medications they rely on.

Lawsuit Pressure Influences FDA’s Reevaluation of Tirzepatide Status: Compounding Pharmacies to Avoid Fines for Now

The FDA announced it would reevaluate its decision to remove Eli Lilly’s tirzepatide, the active ingredient in diabetes drug Mounjaro and obesity drug Zepbound, from its shortage list. The agency made this announcement following a lawsuit from the Outsourcing Facilities Association (OFA), which challenged the FDA’s prior decision. The FDA’s earlier removal of tirzepatide occurred earlier this month after confirming with Lilly that supply issues had stabilized. However, the FDA had placed tirzepatide on the shortage list since December 2022 due to high demand.

The lawsuit, filed on October 7, claimed the FDA acted “recklessly and arbitrarily” in removing tirzepatide from its shortage list. As a trade association representing compounding pharmacists and facilities, the OFA argued that the FDA failed to consider input from affected parties and the public. They requested a temporary restraining order to prevent the FDA from penalizing compounding pharmacies that continued producing the drug. In response, the FDA agreed to halt the lawsuit while reassessing the situation. Consequently, the FDA permitted compounding pharmacies to continue producing tirzepatide during the review period.

Compounding pharmacies play a critical role in addressing drug shortages. When a drug is on the FDA’s shortage list, these pharmacies can produce similar versions to meet existing demand. If the FDA removes a drug from this list, compounded versions cannot be sold, as they lack FDA approval. This decision allows compounding pharmacies to continue making tirzepatide during the review period. The FDA’s change of heart reflects the ongoing concerns about the availability of this crucial medication.

Hims & Hers Stock Surges as FDA Reconsiders Compounded Weight-Loss Drug Limits

The announcement had an immediate impact on Hims & Hers Health (HIMS), whose shares saw a 7% increase in stock value following the FDA’s decision to reconsider its previous ruling. Hims & Hers has positioned itself as a key player in the market for compounded weight-loss drugs. The company’s stock reached $20, more than doubling its value this year.

Earlier this month, on October 3, Hims & Hers faced a setback when the FDA announced that Eli Lilly’s tirzepatide supply was no longer in shortage. This news resulted in nearly a 10% drop in Hims & Hers stock. Investors expressed concerns about potential restrictions on compounded versions of the drug, which are sold at lower prices and have become a cornerstone of Hims & Hers’ weight-loss offerings.

Despite the stabilization of Eli Lilly’s tirzepatide supply, compounded semaglutide, another GLP-1 drug offered by Hims & Hers, remains in short supply. This ongoing shortage helps maintain demand for Hims & Hers’ weight-loss medications amid the changing regulatory landscape. The company offers injectable weight-loss treatments for as low as $199 per month, attracting consumers seeking affordable alternatives.

With the FDA reconsidering its stance, Hims & Hers stands to benefit from continued access to compounded versions of tirzepatide and semaglutide. This positions the company as a competitive player in the crowded weight-loss market. The outcome of the FDA’s review will play a crucial role in determining the company’s future growth and ability to meet consumer demands for its affordable compounded medications.

Commercial Availability of Obesity Drugs: Pharma Giants Lilly and Novo Face High Demand and Supply Shortages

Obesity drugs have garnered attention since Novo Nordisk (NVO) received FDA approval for its obesity drug Wegovy (semaglutide) in 2021. Similarly, tirzepatide has also faced high demand that exceeds supply. As a result, the FDA has placed Wegovy under the shortage list since August 2022, and supply issues for this drug persist.

To address the rising demand, Lilly and Novo are heavily investing in optimizing their production capacities. Furthermore, both companies have engaged in legal battles with multiple compounding pharmacists over the past two years, raising concerns about the safety and use of these compounded versions.

In recent years, Novo Nordisk and Eli Lilly have produced highly effective GLP-1-based drugs for diabetes and obesity, such as Ozempic and Mounjaro. These injectable medications have gained immense popularity, prompting the companies to invest heavily in expanding their manufacturing facilities. The convenience of these drugs, delivered through pen devices similar to those used for insulin, has further contributed to their appeal. However, as demand for GLP-1s continues to rise, patients and doctors express concern that the companies may shift their focus and resources away from insulin production in favor of these lucrative weight-loss drugs. This potential diversion of attention raises alarms about the accessibility of insulin for those who rely on it for their diabetes management.

Rising Demand for GLP-1 Weight Loss Drugs Creates Insulin Shortages

As sales of GLP-1 drugs surge, insulin users worldwide face significant shortages of the medications they depend on. In the U.S., Novo Nordisk’s recent decision to discontinue a product has left patients with fewer options. Pharmacies have struggled to stock essential vials of insulin used in pumps, while the U.K. and South Africa also report similar shortages. These challenges have led healthcare authorities in South Africa to prioritize insulin pens for vulnerable patients. The diabetes community fears that insulin manufacturers may be losing interest in insulin production amid these supply disruptions.

Novo Nordisk and Eli Lilly have a long history in insulin manufacturing. Novo was founded in the 1920s specifically to create insulin, while Lilly commercialized the world’s first insulin product around the same time. Together with Sanofi, they dominate the global insulin market. However, increasing pressure from policymakers to lower insulin prices has coincided with a new focus on profitable GLP-1 drugs. Analysts note that Novo rarely discusses insulin’s commercial prospects, emphasizing the potential for growth in GLP-1 products. This shift raises concerns among patients reliant on insulin, especially those with type 1 diabetes who have no alternative sources.

Both companies assert their commitment to maintaining insulin production, but patients remain skeptical. Novo claims it is working to optimize supply amidst unprecedented market changes. Meanwhile, Lilly emphasizes that insulin remains a priority and that demand for GLP-1 drugs does not impact its insulin supply. However, many patients and healthcare professionals believe Novo and Lilly have a moral obligation to ensure access to insulin, even as they pursue profits from the more lucrative GLP-1 medications. The community continues to watch these developments closely, fearing their critical needs may be sidelined as the focus shifts to more profitable treatments.

Author

Bernice Lottering