Accessing Weight-Loss GLP-1s: The Role of Compounding Pharmacies
Initially developed to manage type 2 diabetes, glucagon-like peptide-1 (GLP-1) agonist medications have become exceptionally popular for weight loss. High-profile celebrity endorsements and widespread media coverage has led to an overwhelming spike in demand.
By any estimation, the American market for weight-loss GLP-1s is enormous. According to a Kaiser Family Foundation analysis, more than 40% of privately insured adults under 65 are clinically eligible for a GLP-1 drug to treat obesity. Although there are several GLP-1 agonists on the market, only three are currently approved for weight management: Novo Nordisk’s Saxenda (liraglutide), Novo Nordisk’s Wegovy (semaglutide), and Eli Lilly’s Zepbound (tirzepatide).
While initial payer response to this new crop of obesity treatments was lukewarm, in March 2024, Wegovy became the first weight-loss drug approved for lowering the risk of cardiovascular disease complications, like heart attack and stroke, in overweight adults. Unsurprisingly, this led to increased coverage for Wegovy, and the coverage landscape is likely to change again with the expected approval in this indication for key competitor Zepbound.
High Costs, Lack of Coverage, and Shortages
While these subcutaneous medications have the potential to transform the treatment of obesity in the U.S., accessibility remains an issue. A combination of high prices, limited coverage, continuing shortages, and the sudden increase in demand has made GLP-1 drugs difficult to find and access.
First of all, the high cost of GLP-1 medications is a significant barrier to access. For uninsured patients, the price of Zepbound and Wegovy ranges from $1,060 to $1,350 per month. As for the insured, many health plans do not cover GLP-1 therapies for weight loss, although that is shifting. After Wegovy was approved for its cardiovascular indication, it was covered for 54% of members across all channels by July 2024, according to MMIT’s Analytics policy and restriction data.
Coverage also varies widely depending on a patient’s health insurance plan and specific medical conditions. Some patients may need prior authorization from their insurance companies, or may need to step through multiple weight-loss products before they are approved for GLP-1s. Many face high out-of-pocket costs, especially if they have high deductibles or are underinsured. Given the immense prospective market for GLP-1s, patients can also expect insurance premiums to rise as coverage expands.
To complicate matters, there has been an ongoing shortage of semaglutide and tirzepatide for the past couple of years, both for Wegovy and Zepbound and their diabetic-drug counterparts, Ozempic and Mounjaro. As the shortage continues, availability has become a major issue. In retail and online pharmacies, access to GLP-1 drugs is geographically uneven, as patients in healthcare deserts and rural areas may have insufficient infrastructure to support timely access.
Emergence of Compounding Pharmacies
As patients struggle with the high costs and limited availability of commercial GLP-1 medications, many have turned to compounding pharmacies as an alternative. Compounding pharmacies are allowed to produce non-identical versions of GLP-1 drugs, such as semaglutide and liraglutide, under specific FDA regulations, especially during times of shortage. This allows patients to continue their treatment when commercial options are unavailable.
However, the rise of compounded GLP-1s comes with serious safety and regulatory concerns. Compounding pharmacies are not subject to the same rigorous testing and oversight as FDA-approved drugs. Compounded semaglutide and tirzepatide formulations may vary in potency, potentially leading to dosing errors.
Instead of subcutaneous forms, many compounding pharmacies are also advertising oral versions of tirzepatide and semaglutide, which have not been approved by the FDA for weight loss. While these products do allow patients to avoid self-injections, they are associated with gastrointestinal inflammations and subsequent adverse effects. As patients must carefully follow administration instructions, the oral form is often less effective.
The FDA is also concerned about compounded versions of these drugs made with salt forms of semaglutide or contaminated with impurities, such as trace metals, which pose risks to patient health. In fact, Novo Nordisk recently reported that more than 10 fatalities and 100 hospitalizations were linked in the U.S. to off-brand, compounded semaglutide. These adverse events included patients treated with compounded semaglutide contaminated with peptide BPC-157, which is prohibited by the FDA.
According to both Eli Lilly and Novo Nordisk, many aesthetic medical centers, med spas, and online retailers have farmed out doses of compounded semaglutide and tirzepatide without proper dosing information or confirmation of their ingredients.
Black/Gray Market Risks
The emergence of counterfeit GLP-1 agonists on the black market has added another layer of risk. Reuters recently reported that criminal groups have exploited the high demand for Ozempic and Wegovy by producing and distributing fake versions of these drugs, often with dangerous or ineffective ingredients. The prevalence of fake medications underscores the importance of obtaining drugs from legitimate sources and raises concerns about the safety of compounded versions, which may not be produced in controlled, regulated environments.
As the demand for GLP-1s continues to outstrip supply, some patients are turning to illicit, unregulated sources to obtain these drugs. Online marketplaces like Craigslist and Facebook have become hotbeds for illegal sales of Ozempic and other GLP-1s, which may be counterfeit or poorly stored, leading to further risks for patients. Eli Lilly recently cautioned the public that these medications “may contain no medicine, the wrong medicine, incorrect dosages, or multiple medicines mixed together, which could result in serious harm.”
The illegal use of black market GLP-1 drugs can lead to significant healthcare costs for patients—and for payers. According to the American Hospital Association, ICU hospitalization for severe complications from GLP-1s, such as pancreatitis, kidney failure, or hypoglycemia, could cost between $5,000 to $20,000 per day.
The Future of GLP-1 Medications
The future of GLP-1 medications is uncertain. While demand is unlikely to decrease, the safety concerns around compounded versions and the emergence of “make your own” compounded semaglutide tutorials by online retailers remain a significant issue.
In October 2024, the FDA removed Eli Lilly’s tirzepatride from its shortages list, ending permission for compounding pharmacies to produce copycat versions. Immediately thereafter, a compounding pharmacy organization filed a lawsuit insisting that tirzepatride products Zepbound and Mounjaro are still in short supply. The FDA responded by agreeing to allow compounding pharmacies to continue producing off-label versions of tirzepatride while it re-evaluates the situation. (Currently, only one formulation of semaglutide is officially on the FDA shortage list.)
The coverage landscape for GLP-1s is also volatile. In November 2024, the Biden administration introduced a proposal to expand Medicare and Medicaid coverage of GLP-1s to treat obesity as a condition on its own, which would expand access for millions of beneficiaries. If the incoming administration backs the proposal, this requirement could become law in 2026.
Regardless, it’s clear that the FDA must add restrictions to regulate the quality of compounded GLP-1s and provide guidance to patients and healthcare providers on their use. Both Eli Lilly and Novo Nordisk have invested heavily in greater manufacturing capacity to meet the demand, but they also need to address the ongoing issues of rising costs and access in underserved areas. Solutions could include reducing prices or expanding patient assistance programs.
Insurance plans that restrict access to the GLP-1 medications for obesity must consider the significant indirect costs they incur. Patients denied coverage often seek these medications through unauthorized channels, leading to adverse health outcomes. When such patients require hospitalization—which costs an average of $3,167 per day and can rise exponentially with case complexity—the financial toll becomes evident.
In contrast, the negotiated cost for GLP-1 treatments is typically under $1,000 per month per patient. The expense of just 100 hospitalizations due to complications from compounded or black-market GLP-1s far exceed the costs of providing these medications upfront. Investing in coverage for eligible patients is not just an ethical imperative, but it could also save thousands of dollars per case while improving patient health outcomes.
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