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Providers of compounded obesity drugs are finding—for now—a new way into the booming market by tweaking formulations

Key Points

A government crackdown on cheaper copies of Ozempic and similar diabetes and weight-loss drugs was intended to shut the door on that booming market.

It hasn’t exactly worked out that way.

Instead, some compounding pharmacies and telehealth companies that make the copies have found new ways in. They are making and selling dosages slightly different from the standard, FDA-approved amounts or including additives such as vitamins B3 and B12. Others have changed how the drug is taken, switching from injectables to under the tongue drops or pills.

These providers are relying on a law that allows bespoke versions of drugs that are unavailable commercially. Though some patients report delays in receiving the compounded medications, many are still getting them—at least for now—said patients and industry professionals.

Patients originally turned to these less-expensive alternatives not approved by the Food and Drug Administration because their insurance didn’t cover the brand-name drugs. But the FDA recently set spring deadlines for compounders to stop providing the copycat drugs.

Jessica Nelson, 28 years old, has mixed feelings about the new formulations. She turned to a telehealth platform called Emerge for a compounded version of tirzepatide last fall, when her health plan denied coverage of the branded versions, Mounjaro and Zepbound. This spring, Emerge notified her that it was switching pharmacies and adding niacinamide, a form of vitamin B3, and then levocarnitine, an amino acid, to the formulations.

Nelson, who has lost 50 pounds on the medication, said she would prefer that there weren’t any additives. “But if it’s that or nothing, then I would still take it,” Nelson said. She pays $379 a month, less than half of what brand-name alternatives cost until recently.

“It has been life-changing,” she said.

Emerge didn’t respond to requests for comment.

A long-running shortage of blockbuster obesity drugs allowed compounding pharmacies to make cheaper copies over the past few years—and the market for them to explode. The Outsourcing Facilities Association, a pharmacy trade group, estimated in November that larger compounding pharmacies were supplying more than two million patients with compounded semaglutide, the active ingredient in Novo Nordisk’s Ozempic and Wegovy.

By comparison, about 3.4 million prescriptions for the brand-name counterparts were filled that November, according to the Iqvia Institute.

Now that the FDA has declared an official end to the shortages, providers are required to stop making the compounded copies in bulk. A section of the Federal Food, Drug and Cosmetic Act still permits compounding if the drug is changed in a way that makes a “significant difference” for the patient compared with the commercially available drug.

Sellers are taking different tacks. In March, the telehealth site Clover Meds emailed customers to say that its compounded tirzepatide would soon be prescribed only to people who had excessive nausea with standard formulations. Patients would be prompted to answer a question to determine eligibility, the email said. The drug would change to a twice-weekly injection with vitamin B6 to mitigate nausea.

Southend, a compounding pharmacy, emailed its patients to say that it was tweaking several dose concentrations to avoid being considered a “copy.”

Southend said that it now prescribed the drug only to patients who couldn’t tolerate the dosages of the brand-name drugs and that its prescription volumes had fallen as a result. Clover Meds didn’t respond to requests for comment.

To comply with the law, the dose and formulation changes need to be tailored to individual patients, instead of on a mass scale, said Lowell Schiller, a nonresident senior scholar at the USC Schaeffer Institute and former head of policy at the FDA.

“There are lots of companies out there who are pushing the envelope on this,” he said.

The drugmakers agree. Novo Nordisk has filed more than 100 lawsuits against businesses marketing compounded semaglutide. In April, Eli Lilly, which makes Mounjaro and Zepbound, sued several telehealth companies, alleging that they are selling mass-produced versions of its drugs under the guise of offering personalized options.

Compounders are also expected to face more scrutiny from state and federal regulators, though the National Association of Boards of Pharmacy said state boards haven’t pursued action related to the issue. The Department of Health and Human Services, which oversees the FDA, didn’t respond to a request for comment.

One of the telehealth clinics that Eli Lilly sued is Mochi Health, which in recent months told customers the doses of its compounded obesity drugs would be automatically adjusted.

“There are no extra steps needed to stay on your treatment plan,” the company wrote in an email viewed by The Wall Street Journal. “We’ll automatically readjust your refill.” For example, it said, patients taking 2.5 milligrams of compounded tirzepatide, the standard starting dose, would be shifted to 2.2 milligrams.

Emily Martin, a 29-year-old Mochi patient in Tacoma, Wash., said that, within three months, the dose or formulation of her medication changed three times.

One included no additive, while the others included different forms of vitamin B12 or B6. Martin said she didn’t meet with any of Mochi’s medical providers beforehand to confirm the changes in the formulations or doses.

“I would have loved an update as to what they were adding in,” Martin said.

Mochi’s chief executive, Myra Ahmad, said that the company was compliant with federal guidance and regulations and that every dosage change at Mochi is reviewed and approved by a licensed medical provider.

“This lawsuit is, broadly, a PR play,” she said.

Eli Lilly and Novo Nordisk have both recently lowered prices to $500 a month for most doses for patients who pay on their own. Yet many patients have said the compounded versions remain more affordable over the long term.

“I honestly don’t have any intention of stopping this,” said Martin. “It has made my life a lot better.”