While the FDA-approved weight-loss drug semaglutide was in shortage since 2022, other manufacturers found a legal way to carve out market share.

Ro, a telehealth company, advertises weight-loss drug Zepbound – containing tirzepatide next to a banner advertising deals at McDonald’s at the Jackson Station Pedway between the Red Line and Blue Line. Photo by Nupur Bosmiya

Over the last few years, drugs like Ozempic and Wegovy have become household names, driving news coverage, research and interesting pop-culture moments. 

The aforementioned drugs are brand names for semaglutide — a glucogen-like peptide-1 (GLP-1) drug initially used by people who have Type 2 diabetes. Now, its popularity comes from its weight loss and appetite control capabilities. 

Geoffrey Durso, assistant professor of marketing in the Driehaus College of Business at DePaul University, studies “radically new products” and the psychological effects of pharmaceutical consumption, including GLP-1 drugs. 

“It turns out there is ultimately a lot of real excitement in medical science communities,” said Durso. 

The demand for GLP-1 drugs has skyrocketed. Drugmakers producing these drugs for diabetes and weight loss have spent about one billion dollars in 2023 advertising them, up by 51% from the previous year. 

While GLP-1 drugs are currently available in the market, the Food and Drug Administration (FDA) had declared a shortage of semaglutide supply since 2022 after its popularity skyrocketed following news that celebrities and influencers were using it to lose weight.

Consequently, many compounding pharmacies have seized the opportunity to supply their own versions of this drug.

Drug compounding is a process by which FDA-approved pharmacies can create different versions of a drug to better suit a patient’s specific needs. For instance, if a patient cannot ingest Drug A in tablet form, a compounding pharmacy can manufacture a version that can be taken in liquid form. 

While this allows patients to get healthcare on their own terms, it also frees pharmacies from oversight over the drugs they produce. 

The compounded versions of Ozempic and Wegovy are commonly referred to as compounded GLP-1 drugs, which have since increased in popularity for their lower prices and easier accessibility. 

Advertising Compounded GLP-1 

Advertisements for compounded versions of the drug have been ubiquitous in subways, bus stops and online platforms like Instagram, Spotify, YouTube and Reddit. 

Most recently, Hims & Hers, a telehealth platform prescribing compounded GLP-1 drugs, broadcasted an ad during Super Bowl LIX titled, “Sick of the System.” It criticized the weight-loss industry and implicitly called out companies like Novo Nordisk for selling drugs “priced for profits, not patients.”

However, the advertisement has received backlash, especially from Novo Nordisk, for not adequately addressing that the compounded GLP-1 drug is not FDA-approved. 

“The recent explosion in irresponsible and misleading advertising about compounded GLP-1 drugs, like the Hims & Hers Super Bowl commercial, puts patients’ safety at risk, and we cannot stay silent,” a Novo Nordisk spokesperson said in a statement to Fierce Healthcare. 

Hims & Hers responded by saying that their personalized treatments help patients feel healthier and stay on the treatment longer than the industry standard. 

“We take safety, quality and transparency steps for every customer on our platform,” a Hims & Hers spokesperson said. 

According to Durso, this “flood” of advertising is strategic.

“They [compounding pharmacies] understand there’s a clock ticking,” Durso said. “Thus, now is the time to not just sell the product, but to be a brand that consumers actually prefer compared to these other classes of FDA-approved products.”

Durso also says that advertising these products enough creates a sense of normalcy. 

“If it’s on the market, it can’t be that bad. That’s something a lot of consumers think about … especially if it’s popular,” he said.

Durso says that another reason companies selling compounded GLP-1 drugs have been advertising so strongly is because there is much demand for the product. 

According to a Kaiser Family Foundation (KFF) Health report, one in eight adults has taken some kind of GLP-1 drug. Furthermore, about half of them, or 6% of U.S. adults, are currently on a GLP-1 prescription. 

Durso also adds that as the popularity of GLP-1 drugs surges, competition in the market will increase. 

“The people that already have a sort of in into this market are going to advertise heavily now, to be the winner or to at least be competitive,” said Durso. 

However, as the FDA revoked the shortage status for another GLP-1 drug called tirzepatide, it may do the same for semaglutide soon, threatening many compounding pharmacies’ revenue streams. 

Novo Nordisk Responds

For Novo Nordisk, this shortage is a loss of business, according to Anthony LoSasso, professor and chair of the department of economics at DePaul. 

The drug manufacturer has filed 21 lawsuits against weight-loss clinics, medical spas, pharmacies and more for “unlawful marketing.”

“Novo [Nordisk] has every possible incentive to get as much production capacity online,” said LoSasso, whose research predominantly focuses on the economic dimensions of health and health policy. 

One of the distributors, Ro, is a telehealth platform focused on providing patients with fertility solutions, weight loss, hair care and skincare. It also sells compounded GLP-1 along with Zepbound, Ozempic and Wegovy.

Subscriptions for Ozempic start at $900 a month, Zepbound starts at $349 to $499 a month (depending on dosage), and the compounded GLP-1 subscription starts at $254 a month. 

Compared to the costs of name-brand drugs, compounded GLP-1 is provided at almost a third of the cost of Ozempic. 

However, if the FDA revokes semaglutide’s shortage status, a state-licensed pharmacy should stop distributing the drug within 60 days and an outsourcing facility within 90 days. 

This would require state-licensed pharmacies to stop distributing the drug by April 22, 2025, and outsourcing facilities to stop distributing the drug by May 22, 2025. 

In response to the possibility of the shortage ending, a Ro spokesperson said in a statement that they will continue to follow the FDA’s rules and regulations on compounding. 

“Ro will always work to ensure that our patients can access the most clinically appropriate treatments for their needs and goals, at the best possible price,” they said. 

Noom and Effecty did not respond to requests for comment. 

Compounded GLP-1 and the Long Game

LoSasso said that companies selling compounded GLP-1 would continue to drive demand upwards to extend this shortage. 

He notes that companies are playing the “long game” because once the shortage ends, they will have to stop production. 

While the shortage has driven demand upwards, he added that the compounding pharmacies have driven prices lower. 

“The real takeaway is that competition is good at lowering prices,” said LoSasso. “The actual cost of making the thing is pennies, nickels, tiny amount per pill.”

Patent protections allow drug manufacturers like Novo Nordisk the legal ability to avoid competition of this kind, LoSasso mentioned, along with the ability to sell Ozempic and other FDA-approved drugs at a higher price. 

LoSasso also explained that funding and investment in drug manufacturing companies are driven by the incentive that the resulting product can be priced higher than a generic drug. 

“Investors, hedge funds, private-equity shareholders, they want to invest the money because they … will have the ability to charge high prices via the monopoly patent protection,” he said. 

However, with patents expiring in China next year, LoSasso believes generic versions of the drug will soon make their way into the American market.

“I’m expecting there to be a lot of under-the-table, unregulated supply entering the US,” said LoSasso.   

This may further reduce demand for FDA-approved versions of the drug and open the GLP-1 to nations outside the United States. 

Header by Anna Retzlaff