Legal action has been initiated against the Food and Drug
Administration by drug compounding organizations following the agency’s February 21 announcement declaring an end to Wegovy shortages. The lawsuit, filed in the Northern District of Texas federal court by the Outsourcing Facilities Association and North American Custom Laboratories, challenges the FDA’s decision that will force compounders to cease production of alternative semaglutide versions by spring.
The compounders argue the FDA’s ruling was made without proper advance notification or public comment period, labeling it as “arbitrary, capricious, and contrary to law.” They maintain that despite the FDA’s declaration, genuine shortages persist, citing the agency’s own acknowledgment of possible “intermittent and limited localized supply disruptions” and Novo Nordisk’s statements about continuing supply constraints.
The lawsuit represents the second legal challenge against the FDA regarding obesity medications, following an earlier unresolved case concerning Eli Lilly’s tirzepatide removal from the shortage list.
Major online healthcare provider Hims & Hers, which generated $225 million from compounded semaglutide and related GLP-1 drugs in 2024, announced plans to comply with the FDA’s directive. CEO Andrew Dudum informed investors that customers will be advised to seek “alternative options on the commercial dosing” in the coming months. The company’s stock value has declined by more than 33% since the FDA’s
announcement.
Despite this setback, Hims & Hers maintains an optimistic outlook, projecting total revenue between $2.3 and $2.4 billion for the coming year, with $725 million expected from weight loss medications. The company anticipates profits ranging from $270 million to $320 million, partly through legally permitted “personalization” of semaglutide dosing to help manage side effects and improve patient adherence.
Meanwhile, Eli Lilly has announced pricing adjustments for its Zepbound medication through its self-pay program. The company reduced the monthly cost of its 2.5-milligram dose from $399 to $349 and its 5-milligram dose from $549 to $499. New dosage options of 7.5 and 10 milligrams will be introduced at $499 monthly for initial
prescriptions and refills completed within 45 days, marked down from previous prices of $599 and $699.
The ongoing dispute between compounders and the FDA has been further complicated by both Novo Nordisk and Eli Lilly’s active opposition to compounded versions of their drugs. These pharmaceutical companies have employed various strategies, including legal actions and public communications, to highlight potential risks associated with compounded medications.
The FDA’s decision establishes different deadlines for compounders to discontinue semaglutide production, with April 22 or May 22 as cutoff dates, depending on their specific legal authorization category. The compounders’ lawsuit contends that the FDA’s action serves to “benefit special interests, raise drug prices, and deprive much of the public access to a needed medicine.”
This legal challenge highlights the complex dynamics between pharmaceutical manufacturers, compounding facilities, and regulatory authorities in managing access to increasingly popular weight loss medications. The outcome could have significant implications for the availability and pricing of these drugs, as well as the broader role of compounding facilities in addressing drug shortages.