For the past several years, physicians and compounding pharmacies have stepped in to address critical patient access gaps during U.S. Food and Drug Administration (FDA) shortage declarations for semaglutide (Ozempic, Wegovy) and tirzepatide (Mounjaro, Zepbound).
Healthcare providers offered compounded alternatives at more accessible price points and helped patients avoid months-long waits for branded medications during widespread supply disruptions.
Now, with FDA shortages for both drugs resolved and pharmaceutical companies pursuing legal actions, prescribing physicians and compounding pharmacies are navigating new questions: How can you continue serving patients within the current regulatory framework?
Physicians and pharmacies can continue to prescribe and compound GLP-1 medications under specific circumstances. But regulatory compliance is not your only exposure: You must also avoid business and marketing practices that could lead to legal challenges from the drug manufacturers.
When Is Compounding GLP-1 Weight Loss Drugs Still Legal?
The FDA's prohibition on making "essentially a copy" of commercially available drugs forms the cornerstone of current enforcement. However, this prohibition includes exceptions for legitimate medical compounding that serves individual patient needs.
"Essentially a copy" means you cannot simply recreate commercial formulations using the same pharmaceutical active ingredient, strength, dosage form, and route of administration. This constitutes unauthorized generic manufacturing, regardless of marketing terminology like "compounded," "personalized," or "tailored."
But legitimate medical exceptions still exist when commercial formulations cannot adequately serve specific patient needs.
For Physicians: Assess & Document Medical Need for Compounded Drugs
Physicians, the end of the drug shortage has impacted what you may order from compounding pharmacies. You may still prescribe compounded GLP-1 drugs, but your prescription must clearly articulate a medically necessary significant difference from the commercially available drug product. Cost savings alone is not sufficient justification.
Similarly, adding an additional ingredient, such as vitamin B12 or glycine, to an otherwise essential copy of the commercially available drug does not create a significant difference.
Acceptable medical justifications include:
- Patient allergies to commercial formulation ingredients. Document specific allergic reactions to preservatives, excipients, or inactive ingredients. Your records must show failed trials with commercial products and the medical necessity for modified formulations.
- Required dosage modifications based on patient response. Some patients need micro-dosing or intermediate strengths not commercially available. Document why standard dosing protocols are medically inappropriate and your clinical rationale for alternative dosing. If the compounded drug product’s dosage strength is within 10 percent of the commercially available drug product’s dosage strength, the FDA will generally consider the two drugs to have a similar dosage strength.
- Alternative delivery methods for medical conditions. Patients with swallowing difficulties, severe injection-site reactions, or other medical contraindications may require sublingual, nasal, or modified delivery systems. These represent legitimate departures from commercial injection formulations.
- Combination therapies not commercially available. Document the medical necessity for combining GLP-1 medications with other compounds for specific medical conditions. However, the FDA will consider a compounded drug product to be essentially a copy of commercially available drug products if the compound contains the same active pharmaceutical ingredients as two or more commercially available drugs in the same, similar, or easily substitutable strength, and if the commercially available drugs can be used by the same route of administration as the prescribed compound.
Patient-specific documentation requirements extend beyond basic prescription information. Your records should include medical justification, specific formulation modifications, and verification that commercial alternatives cannot meet documented patient needs.
For Pharmacies: Verify Medical Justification
You must verify that prescriptions include adequate medical justification before compounding. Consult with prescribers when documentation appears insufficient.
Drugmakers Taking Legal Action Against Compounding Pharmacies, Telehealth Companies, Physicians
Citing legal claims such as trademark infringement, deceptive practices, false advertising, and the unlicensed practice of medicine, Eli Lilly has filed lawsuits against multiple telehealth companies, wellness centers, medical spas, pharmacies, and individual providers. The drug maker is expected to file dozens more.
While Eli Lilly is leading the charge, both Eli Lilly and Novo Nordisk have sent hundreds of cease-and-desist letters to providers nationwide. As Eli Lilly CEO Dave Ricks publicly stated, the company is "challeng[ing] the physicians who are doing the prescribing" – a strategy our law firm has seen first-hand.
FDA's Role Appears More Regulatory Than Punitive, For Now
So far, the FDA has issued guidance and established enforcement timelines rather than pursuing individual enforcement actions. However, the enforcement landscape may be evolving, and individual FDA warning letters or enforcement actions may not be widely reported.
Be vigilant for warning letters, records requests, or other signs of an investigation, and contact legal counsel immediately if you suspect you’ve caught the FDA’s attention.
Consider the penalties for violating the FD&C Act:
When preparing drug compounds in compliance with Section 503A of the Food, Drug, and Cosmetic Act (FD&C Act), drug compounding pharmacies are exempt from certain FDA laws regarding good manufacturing practices, labeling requirements, and new drug approval applications.
However, when a 503A pharmacy compounds a drug that is considered an essential copy of a commercially available drug product, such compounded drug could be considered by the FDA to be adulterated, misbranded, and/or introduced without a required drug approval application.
Potential penalties for such violations include up to one year of imprisonment and monetary penalties of $1,000 for each violation. If it is shown that such violations were committed with the intent to defraud or mislead, penalties can be increased to imprisonment for up to three years and fines of $10,000 per violation.
When a physician knows that the compounding pharmacies intend to fill orders for compounded drug products that are essential copies of commercially available drug products, and the physician orders essential copies, the physician may be charged with conspiracy to violate the FD&C Act.
What's Next: Prepare for Continued Enforcement
The enforcement landscape will continue to evolve as court cases resolve and regulatory guidance develops. Both physicians and pharmacies should prepare for sustained scrutiny.
If you're still compounding tirzepatide or semaglutide without meeting patient-specific exceptions, compliance is now mandatory. The enforcement discretion period for both drugs has ended.
When To Get Legal Counsel Involved:
- When you receive a cease-and-desist letter. Cease-and-desist letters from pharmaceutical manufacturers require immediate legal attention. Your attorney can evaluate the claims and respond tactically to avoid unnecessary litigation while protecting your rights.
- When you receive an FDA warning letter, inspection notice, or information request. These signal potential enforcement actions requiring experienced regulatory counsel.
- When you receive Texas Medical Board or Texas State Board of Pharmacy inquiries about prescribing patterns or compounding practices that can escalate without proper legal guidance.
- When you want a compliance check-up. A proactive consultation helps identify risk factors before they attract enforcement attention or legal claims. The stakes are too high and the litigation landscape too aggressive to continue to rely on business as usual.
Questions about your specific compliance obligations or need to respond to enforcement actions? Contact our healthcare law practice at (713) 783-3110 to discuss your situation.