The FDA has agreed to review its decision to remove Eli Lilly’s LLY tirzepatide — the active ingredient used in diabetes drug Mounjaro and obesity drug Zepbound — from its shortage list. During this process, the agency will allow compounding pharmacies to continue making compounded versions of tirzepatide.
This decision marked a reversal of the agency’s previous stance, it removed tirzepatide from the shortage list earlier this month, based on confirmation from Lilly. Due to increased demand, tirzepatide has been placed under the FDA’s shortage list since December 2022.
What is Compounding?
Compounding is a practice in which licensed pharmacies or facilities are allowed to create drugs that are in short supply. In the United States, when a drug is placed under the FDA’s shortage list, compounding pharmacies are allowed to produce similar versions of the drug to fill the existing prescriptions and meet existing demand.
However, if the FDA removes a drug from its shortage list, these compounded versions are no longer allowed to be sold. Compounded drugs are not approved by the FDA.
Why Did the FDA Change Its Stance?
This decision was announced by the FDA on Friday in a court filing in response to a lawsuit filed by the Outsourcing Facilities Association, a trade association representing compounding pharmacists and facilities.
The lawsuit, filed on Oct. 7, claimed that the FDA’s decision to remove Lilly’s tirzepatide from its shortage list was ‘reckless and arbitrary’ and that the drugs were still in short supply. It also alleged that the FDA did not take into consideration any ‘input from affected parties and the public’ and sought a temporary restraining order for 14 days to prevent the agency from taking any action against any compounding pharmacies that continue to make copies of the drug.
In response to the above allegations, the FDA sought to stay the above lawsuit while re-evaluating the supply shortage issue for Lilly’s tirzepatide. During this review period, the agency also agreed to allow compounding pharmacies to continue making tirzepatide.
Commercial Availability of Obesity Drugs
Obesity drugs have been in the spotlight ever since Novo Nordisk NVO gained the FDA’s approval for its obesity drug Wegovy (semaglutide) in 2021. Like tirzepatide, the NVO drug has also been experiencing high demand, which has outpaced supply. The FDA has also placed Novo’s Wegovy under the shortage list since August 2022, and the supply issues for the drug remain.
To meet the rising demand, Lilly and Novo are investing heavily in optimizing their production capacities. Over the past two years, both companies have also been engaged in legal battles with multiple compounding pharmacists, expressing concerns over the safety and use of these compounded versions.
In response to the FDA’s decision to review supply shortage, shares of Hims & Hers Health HIMS surged nearly 10% on Monday. A compounding pharmacy, HIMS stands to benefit from allowing the production of compounded versions of Lilly’s tripeptide. Hims & Hers Health has been a key player in offering compounded versions of Lilly’s drug to consumers seeking affordable alternatives.
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