FDA Ends Tirzepatide Shortage Status, Mandates Halt on Compounded Versions

Source: Wall Street News

The U.S. FDA announced that the active ingredient tirzepatide in Eli Lilly's weight-loss drug Zepbound is no longer in shortage, and compounding pharmacies will no longer be allowed to produce unapproved generic versions. The FDA requires these pharmacies to cease production of generic versions within 60 to 90 days. The transition period aims to help patients switch to branded medications. Following the announcement, the declines in share prices of both Eli Lilly and Novo Nordisk narrowed.

On Thursday, December 20, Eastern Time, the U.S. Food and Drug Administration (FDA) announced that tirzepatide, the active ingredient in Eli Lilly and Company's weight-loss drug Zepbound, is no longer in shortage.

This move means that the FDA will no longer allow compounding pharmacies to produce unapproved, non-branded, cheaper generic versions of tirzepatide. Now,FDA requires these compounding pharmacies to stop producing generic versions of tirzepatide within the next 60 to 90 days., the specific duration depends on the type of dispensing facility. This transition period aims to provide patients with sufficient time to switch to brand-name drugs.

The FDA stated in a letter:

"After a comprehensive analysis, the FDA has determined that the shortage of tirzepatide injections that began in December 2022 has been resolved. The FDA will continue to monitor the supply and demand situation for these products."

This decision undoubtedly dealt a blow to many compounding pharmacies. Many of these pharmacies claim that their generic versions can help patients who are not covered by insurance for Zepbound or cannot afford the monthly cost of approximately $1,000 for the drug. In particular, Zepbound and other weight-loss medications are often not covered by many insurance plans, placing an additional burden on patients.

This is the latest controversy between the FDA and compounding pharmacies over the shortage of tirzepatide. As the active ingredient in Zepbound and Eli Lilly's diabetes treatment drug Mounjaro, the surging demand for tirzepatide has led to a supply shortage. To address this shortage, Eli Lilly has invested billions of dollars to expand the production capacity of tirzepatide. However, despite Eli Lilly's efforts to increase production, it remains difficult to meet market demand.

During Thursday's U.S. stock trading, Eli Lilly and Company once fell more than 1.6%, and Novo Nordisk once dropped over 3%. After this news was announced, the declines of both companies narrowed.

Compound Pharmacies Engage in Legal Dispute with FDA

The conflict between the FDA and compounding pharmacies has become increasingly public. On October 8 this year, the industry organization representing compounding pharmacies, the Outsourcing Facilities Association, filed a lawsuit in court, accusing the FDA of suddenly removing tirzepatide from the shortage list without adequate notice. The organization alleged that the FDA acted without proper notification, disregarded evidence that tirzepatide remains in short supply, and may have shown favoritism toward Eli Lilly and Company, thereby harming patient interests.

Under litigation pressure, the FDA stated it would reassess this decision and allow compounding pharmacies to continue producing generic versions during the review period. Generic drugs are customized alternatives to brand-name medications designed to meet specific patient needs. Over the past two years, semaglutide, the active ingredient in Wegovy and Ozempic, has been intermittently in short supply. According to federal law, when a brand-name drug is in short supply, compounding pharmacies can prepare a generic version of the drug if certain requirements are met.

In the United States, Zepbound and other weight-loss drugs are often not covered by many insurance plans, making generic drugs a more affordable option. Due to unstable supply and high costs of brand-name drugs like tirzepatide (up to $1,000 per month before insurance and other discounts), many patients have turned to generic alternatives.

However, the production of compounding pharmacies does not undergo FDA safety and efficacy reviews, so the FDA has consistently urged patients to use officially approved brand-name drugs. However, the FDA does inspect some outsourcing facilities engaged in drug compounding.

In today's pharmaceutical market, patent protection and market supply are closely linked. Taking Wegovy, Ozempic, Zepbound, and Mounjaro as examples, these drugs are protected by patents in the United States and overseas. The drug manufacturers Novo Nordisk and Eli Lilly and Company do not supply the active ingredients of these drugs to external parties. This strategy not only protects their market share but has also raised questions about illegal copying, selling, and promotion of products to consumers by certain manufacturers.

However, as the number of illegal generic drugs increases, Eli Lilly and other pharmaceutical manufacturers have taken legal action. In the past year, these two companies have filed lawsuits in the United States against multiple weight-loss clinics, medical spas, and compounding pharmacies. Illegal generics not only infringe on patents but also potentially threaten consumer health. Last month, the FDA also stated that it had received reports of patients overdosing on compounded semaglutide due to dosage errors.

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Editor: Chen Yujia