The U.S. Food and Drug Administration announced on Friday that there is no longer a shortage of Novo Nordisk's popular weight-loss and diabetes drugs, Wegovy and Ozempic. This declaration will have repercussions on the widespread sales of cheaper copies made by compounding pharmacies. Shares of Hims & Hers Health, known for advertising compounded versions of weight-loss drugs, plummeted following this announcement. Meanwhile, Hims & Hers Health announced the acquisition of a plant to produce drugs within the same class as Wegovy and Ozempic.
American regulations permit compounding pharmacies to replicate brand-name medications that face shortages. Wegovy and Ozempic, both containing semaglutide, were in short supply in the U.S. for a significant portion of the previous year. Individuals unable to afford Wegovy or struggling to find it turned to more affordable versions offered by pharmacies and telehealth providers like Hims & Hers and WeightWatchers. Wegovy has demonstrated its ability to help patients lose up to 15% of their body weight on average.
With this regulatory development, compounding pharmacies will now have limited access to Novo's drugs. The sale of compounded versions of Eli Lilly's rival obesity and diabetes drugs was recently prohibited after they were no longer in short supply per FDA assessments. Former FDA Commissioner Robert Califf suggested that this declaration might not completely eradicate obesity drug compounding given the financial incentives, but it marks the beginning of a new era in the industry.
The Alliance for Pharmacy Compounding raised concerns about the transition process for patients using compounded drugs to shift to FDA-approved versions post this announcement. Hims CEO Andrew Dudum mentioned monitoring potential future shortages of the drugs, while Novo Nordisk's statement confirmed that the U.S. supply of their drugs aligns with current and projected demand. Both Novo and Lilly have made significant investments to meet the growing demand for their treatments, which exceeded supply for much of the previous year.
Although all doses of Ozempic and Wegovy were available as per the FDA's website in October, the drugs were not removed from the shortage list until now. The FDA typically reviews if all back orders have been fulfilled before determining the resolution of a shortage situation.