Ozempic® Shortages Present Risks and Rewards for Compounding Pharmacies

July 20, 2023

In recent years, various federal agencies, including the Department of Health and Human Services Office of the Inspector General and the U.S. Food and Drug Administration (FDA), have increasingly scrutinized compounded pharmaceuticals as the demand for compounded drugs continues to grow in response to patient demand for specialty pharmaceuticals and nationwide drug shortages.

Read on for more information regarding (1) why federal agencies continue to focus considerable resources on compounded pharmaceuticals, (2) the current restrictions on compounding pharmacies and outsourcing facilities, (3) why compounded injectable semaglutide (the active ingredient in Ozempic®) could present challenges for compounding pharmacies, and (5) how the market for compounded semaglutide might be impacted once the active ingredient in Ozempic® is taken off the FDA drug shortages list. (At least one variation of semaglutide remains on FDA’s drug shortages list with “limited availability through mid-August 2023.”)

Federal Agencies Remain Focused on Compounded Pharmaceuticals

Unlike FDA-approved, commercially available drugs, compounded drug products are not subject to the same formal approval process. Although the active ingredients in compounded drugs are FDA-approved, the safety and efficacy of the compounded preparations themselves are not verified by the FDA. Rather, preparation of compounded products is governed by FDA rules under Section 503A (Pharmacy Compounding) and Section 503B (Outsourcing Facilities) of the Federal Food, Drug, and Cosmetic Act (FD&C Act), as well as state statutes and regulations enforced by state boards of pharmacy.

Compounded drugs typically benefit certain patients whose medical needs require personalization, or may remedy drug shortages, but they can pose safety risks, such as potency problems or contamination, and are intended for patient use only when commercially available, FDA-approved drugs do not meet patient-specific needs. FDA’s Compounding Incidents Program is intended to identify and prevent outbreaks through surveillance of adverse events and product quality incidents. From time to time, the FDA issues Compounding Risk Alerts to inform healthcare professionals, compounders and consumers about risks associated with compounded drugs, including information on adverse events, outbreaks or product quality.

In addition, patients may need compounded drugs if they are allergic to an ingredient in readily available drugs or if the commercially available drug poses a physical barrier to the patient (e.g., the drug is available only as a pill, but the patient requires the drug in liquid form).

Compounders Must Navigate FDA’s “Essentially a Copy” Guidance

Sections 503A and 503B of the FD&C Act prohibit compounding pharmacies and outsourcing facilities, respectively, from compounding products that are “essentially a copy” of FDA-approved drugs, meaning the products are identical or essentially identical. Notwithstanding this prohibition, compounding pharmacies and outsourcing facilities may compound drugs that (i) appear on the FDA drug shortages list or (ii) have been discontinued and are no longer “commercially” available. For additional information, see FDA’s overview of federal compounding requirements and FDA guidance regarding Medications Containing Semaglutide Marketed for Type 2 Diabetes or Weight Loss.

In January 2018, the FDA issued its ”essentially a copy” guidance to clarify its policies. Notably, this guidance reveals that FDA considers a compounded drug to be “identical or nearly identical” to an approved drug if the two have the same (i) active ingredient(s), (ii) route of administration, (iii) dosage form, (iv) dosage strength, and (v) excipients (meaning inactive ingredients that serve as vehicles, such as fillers or preservatives). Compliance with the FDA’s “essentially a copy” guidance is a frequent point of contention with 503A compounding pharmacies and 503B outsourcing facilities. These facilities must be able to successfully navigate the FDA’s guidance and demonstrate that their products are not essentially a copy of any other products that are available in the market unless such products are experiencing an industrywide drug shortage.

Current State of Affairs: Compounded Ozempic® for Weight Loss

Ozempic®, an injection approved to treat Type 2 diabetes, has gained popularity for off-label use as a weight-loss drug due to its ability to slow the emptying of the stomach and suppress hunger hormones. Now that semaglutide has been added to the FDA drug shortages list, compounding pharmacies are able to prepare compounded versions of it. Semaglutide is approved in its “base form,” which must be acquired from Novo Nordisk, the patent holder of Ozempic®. Without access to the base form of the drug, compounding pharmacies are preparing compounded semaglutide from various salt forms such as semaglutide sodium and semaglutide acetate. According to the boards of pharmacy in North CarolinaWest Virginia and Mississippi, such salt forms of the drug are for “research use only.” The executive director of the Louisiana Board of Pharmacy went further, stating that the salt forms of semaglutide are also not intended for use in humans. This echoes statements made by the FDA indicating that salt forms of semaglutide “have not been shown to be safe and effective.”

Pharmacies are struggling to keep pace with the demand for semaglutide, as are weight-loss clinics. Increased demand and semaglutide’s place on the FDA drug shortages list have encouraged online retailers, physicians and telehealth companies to sell salt forms of semaglutide to patients. Furthermore, off-label use of Ozempic® for weight loss has made access to the drug more difficult for patients who rely on Ozempic® to treat their Type 2 diabetes.

The FDA sent a letter to the National Association of Boards of Pharmacy on April 27, 2023, stating that, while Ozempic® and Wegovy® (a drug with the same active ingredient as Ozempic®) remain on the FDA drug shortages list, salt forms do not meet federal law requirements for use in compounded drugs. On May 30, 2023, the FDA published a safety warning regarding the salt forms of semaglutide, stating that there is no basis for using the salt forms of semaglutide in compounded drugs and that there is no FDA-approved generic of semaglutide. The FDA warned that there are known cases of patients being harmed by the salt forms of semaglutide and provided a link to its MedWatch adverse event reporting program.

While the FDA has yet to take action against compounding pharmacies for using salt forms of semaglutide, the FDA’s safety warning makes it clear that it is willing to investigate reports of such prohibited use of semaglutide. At the same time, state boards of pharmacy in North CarolinaWest Virginia and Mississippi have issued statements outright banning the use of salt forms of semaglutide. Further, these three state boards of pharmacy have clarified that they are willing to take action against compounding pharmacies that use prohibited salt forms of semaglutide, and further, that pharmaceutical manufacturers can take legal action against prescribers and compounders who illegally compound semaglutide.

What’s Next for Compounded Ozempic®?

Once Ozempic® is removed from the FDA’s drug shortages list, compounding pharmacies and outsourcing facilities will not be permitted to utilize the shortages list exception and would be prohibited from compounding semaglutide injections unless they are able to satisfy one of the other exceptions of the “essentially a copy” provision. Additionally, weight-loss clinics and other healthcare providers will be required to administer and prescribe brand-name Ozempic®, which comes at a steeper price than its compounded counterparts. This will place a greater financial burden on patients, who can expect to pay significantly more per month for the drug, which costs around a few hundred dollars in compounded form but runs over a thousand dollars per month under the brand name.

Many compounding pharmacies already add ingredients (such as Vitamin B-12) to differentiate their products from commercially available forms and thus comply with the “essentially a copy” rules. The FDA has yet to provide guidance on whether these compounded variations of semaglutide may be considered novel and not “essentially copies” of brand-name Ozempic®. Regardless, the FDA has made it clear that it intends to investigate instances and reports of dangerous or illicit compounding of semaglutide.

McGuireWoods attorneys track updates on emerging FDA enforcement actions, FDA guidance and compounded pharmaceuticals. For more information on how semaglutide’s inevitable removal from the FDA drug shortages list may impact your services or for information on pharmaceutical compounding more generally, contact any of the authors of this article.