1. The Same Tension: Access vs. Innovation
The tension that exists at the very heart of the 1984 Hatch‑Waxman Act—speeding patient access to medicines while still rewarding the companies that invent them—is now replaying itself in the battle over compounded versions of popular weight loss drugs like Ozempic and Mounjaro. Demand for these GLP‑1 weight‑loss injections exploded so quickly that brand‑name supplies ran short, telehealth start‑ups and local pharmacies rushed in with cheaper compounded copies, and once the scarcity ended, the brand owners hit back with a flurry of lawsuits. The resulting clash again asks how far the law should tilt toward affordability without eroding the incentive to create the next generation of drug innovation.
2. Why the Compounded Market Took Off
- Acute scarcity. FDA placed both drugs on its official shortage list in 2022. Under §503A of the Food, Drug & Cosmetic Act, that listing lets state‑licensed compounders prepare versions without full FDA approval, so long as they follow basic quality rules. (fda.gov)
- Sky‑high list prices. A month of Ozempic still retails for $1,000–$1,200 cash, while Wegovy and Zepbound top $1,300, pushing uninsured or under‑insured patients to seek cheaper alternatives. (goodrx.com)
- One‑click telehealth. Several online clinics began offering compounded GLP‑1s after a brief questionnaire, lowering the friction to obtain them. Critics told Politico the process can be “exactly that easy,” and worry high prices for the branded drugs are driving patients toward unvetted copies. (politico.com)
3. Safety & Quality Concerns
Harvard Health editors caution that compounded drugs “aren’t reviewed by the FDA for purity, safety, or effectiveness,” leaving room for contamination, mis‑dosing, and even outright counterfeits. (health.harvard.edu) Poison‑control centers have logged an uptick in adverse events tied to off‑brand GLP‑1s, from severe nausea to pancreatitis. (glamour.com)
4. The Regulatory Reset: Shortages Resolved
- Tirzepatide. FDA declared the shortage over on December 9 2024, removing it from the list and warning compounders to wind down production. (fda.gov)
- Semaglutide. FDA followed on February 21 2025. (fda.gov) Large 503B outsourcing facilities have until May 22 2025 to exit the market; traditional 503A pharmacies must stop immediately unless a doctor documents a unique clinical need. A federal judge in Texas has already refused to block that timetable. (reuters.com, prnewswire.com)
Once a drug leaves the shortage list, the legal shield for bulk compounding disappears, and any mass‑market “weight‑loss kits” become presumptively illegal.
5. Litigation Landscape (Spring 2025)
| Plaintiff | Targets | Core Claim | Status |
| Eli Lilly | Four telehealth/compounder partnerships | False advertising and unfair competition for marketing “knock‑off Zepbound” | Suits filed April 23 2025; TRO hearings set for mid‑June. (npr.org) |
| Novo Nordisk | Dozens of compounders & wellness clinics | Trademark & trade‑dress infringement (using “Ozempic” name) | Early discovery; several preliminary injunctions already granted. (prnewswire.com) |
| Outsourcing Facilities Association (OFA) | FDA | Declaratory judgment that shortages persist → allow continued compounding | Briefing due July 15 in D.D.C. (pearceip.law) |
6. How Hatch‑Waxman Shapes the Fight
Although compounders sidestep the ANDA pathway, Hatch‑Waxman jurisprudence still looms:
- Patent clocks restart. With shortages resolved, Novo and Lilly regain the full force of their Orange‑Book patents, which run into the early‑to‑mid 2030s, giving innovators a decade to recoup R&D before authorized generics arrive.
- Balancing precedent. Courts historically treat statutory incentives to innovate as paramount once supply stabilizes, a principle likely to tilt decisions against sustained mass compounding.
7. What the Courts Still Have to Decide
- How “resolved” is resolved? OFA argues FDA must show granular, regional supply data before delisting; the Agency says the statute gives it broad discretion.
- Free‑speech defenses. Telehealth defendants claim Lilly’s suits chill truthful speech about lawful compounded alternatives—early motions may clarify where commercial speech ends and consumer deception begins.
- State safe harbours. Bills in Florida and Texas would let in‑state compounders keep selling GLP‑1s under certain conditions; if passed, expect immediate federal pre‑emption challenges.
- Profit disgorgement. Brand owners seek profits made on compounded products during the shortage—courts must decide whether those gains were “wrongful” when FDA itself said the drugs were scarce.
8. Ethical Undercurrents
| Question | Pro‑Compounding View | Innovator View |
| Access vs. risk | Affordable stop‑gap during shortages. | Unvetted copies endanger patients. |
| Equity | High prices effectively ration care to the wealthy. | Undermining exclusivity chills future R&D. |
| Public trust | Compounders fill gaps Big Pharma cannot. | Quality lapses erode confidence in GLP‑1 therapy. |
9. The Road Ahead
Federal courts are poised to deliver the first appellate rulings by early 2026. If judges side with FDA, nationwide production of bulk emaglutide and tirzepatide will end—leaving only narrow, prescription‑specific compounding. Should the Agency lose, expect prolonged legal limbo and a patchwork of state safe‑harbour laws.
Meanwhile, Novo and Lilly are pouring billions into capacity expansions and next‑generation molecules (dual and triple‑agonists) that could eclipse today’s drugs before generic entry arrives. Policymakers therefore face a delicate choice: tighten compounding rules enough to protect patients and patents, yet not so tightly that sticker‑shock patients abandon therapy altogether.
The real test of Hatch‑Waxman’s 40‑year equilibrium is just beginning: can the system reward life‑changing innovation and keep it within reach for the millions who need it?