The Food and Drug Administration’s recent decision to remove Novo Nordisk’s semaglutide from its drug shortage list has sparked legal action from pharmaceutical compounders, who filed a lawsuit Monday claiming the move will prevent patients from accessing crucial treatment options.
The legal challenge, filed in the Northern District of Texas federal court by the Outsourcing Facilities Association and North American Custom Laboratories, follows a similar lawsuit regarding Eli Lilly’s tirzeptatide, which remains pending in court. The compounders argue the FDA’s February 21 declaration was made without proper advance notice or opportunity for public comment.
Under the FDA’s ruling, compounders must cease production of semaglutide alternatives by either April 22 or May 22, depending on their authorization type. The plaintiffs contend the decision is “arbitrary, capricious, and contrary to law,” particularly since both the FDA and Novo Nordisk have acknowledged potential ongoing supply issues.
The impact of this decision has already affected major market players like Hims & Hers, whose stock value has declined by more than 33% since the announcement. The company’s CEO Andrew Dudum informed analysts that customers will be advised to seek “alternative options on the commercial dosing” in the coming months.
Despite generating $225 million from compounded semaglutide and related GLP-1 drugs in 2024, Hims & Hers maintains it will comply with the FDA’s directive. The company remains optimistic about its future performance, projecting total revenue between $2.3 and $2.4 billion for 2025, with $725 million expected from weight loss medications. Their profit forecast ranges from $270 million to $320 million.
Meanwhile, both Novo Nordisk and Eli Lilly have actively opposed compounded versions of their drugs through legal measures and public safety warnings. Lilly has also introduced a new pricing strategy for its Zepbound medication, reducing costs across various dosage options. The 2.5 milligram monthly dose has been lowered to $349 from $399, while the 5 milligram dose is now $499, down from $549.
The company is also launching new 7.5 and 10 milligram doses at $499 monthly for initial prescriptions and refills completed within 45 days, representing significant reductions from previous prices of $599 and $699 respectively. These medications will be supplied in vial form rather than the typical autoinjector format.
The compounders’ lawsuit emphasizes ongoing supply concerns, citing the FDA’s acknowledgment of possible “intermittent and limited localized supply disruptions” during distribution. They argue that the FDA’s decision appears to favor certain industry interests while potentially limiting public access to necessary medications and increasing costs.
Hims & Hers plans to maintain its revenue targets through alternative strategies, including the legal “personalization” of semaglutide doses, which allows for dosage adjustments to help manage side effects and improve patient adherence.
This latest development represents another chapter in the ongoing tension between traditional pharmaceutical manufacturers and compounding facilities in the weight loss and diabetes drug market, with significant implications for patient access and treatment options. The outcome of this legal challenge could have far-reaching effects on the future availability and pricing of these increasingly popular medications.