During the California Gold Rush it was not uncommon for claim jumpers to file encroaching claims, file overlapping claims on top of existing claims or outright work claims they did not own. In some examples, so-called high-graders, would sneak onto someone else’s claim and extract the easiest minerals, leaving the more difficult, less lucrative work for the owners. Claim owners had to be vigilant and actively police their properties or risk losing them.
There is a new Gold Rush of sorts that is quite different than the one that began in California in 1848. Weight loss drugs, like Ozempic, Wegovy, Mounjaro and Saxena, are selling like hotcakes, with demand far outstripping supply. These drugs are lucrative, costing $1,000 a month or more, depending on the rebate or health plan discount.
More than two-thirds of Americas are overweight, while just over a third are obese. This suggests more than 100 million Americans are candidates for the new miracle weight loss drugs. Stateline news reports that compounding pharmacies, producing their own versions of the popular drugs, are increasingly a problem for both patent holders and state health regulators.
A patent runs for 20 years but by the time a drug is approved and ready for market the patent term is substantially less. In theory, until patents expire no other company can produce generic copies of the drug. That suggests it will be more than a dozen years before we will begin to see generic versions of weight loss drugs. However, there are exceptions to the rule. The following is from Stateline news:
Compounding pharmacies are allowed to make a medication that’s essentially a copy of a commercially available drug if its active ingredients are listed on the FDA’s drug shortage list. The active ingredient in weight-loss drugs such as Wegovy and Zepbound is either semaglutide or tirzepatide, and both are on the list.It’s not a normal situation that a blockbuster drug immediately goes on shortage and meets criteria for compounding pharmacies to compound it. I don’t think we’ve ever seen anything like this.
Sensing a huge opportunity to make money, some providers and compounding pharmacies are using the shortage to produce unlicensed generic versions to sell to a willing public. In many cases the prices are a mere fraction of those charged for the name brand drugs.
Drugs prescribed for weight loss such as Mounjaro, Ozempic, Wegovy and Zepbound are popular, expensive, and in short supply. To meet the demand, many physicians, medical spas, IV infusion clinics, telehealth entrepreneurs and pharmacies are jumping on the opportunity to provide compounded versions of the weight-loss medications, which haven’t been on the market long enough to have generic equivalents.
State regulators are having trouble keeping up.
Although the U.S. Food and Drug Administration (FDA) regulates drugs, states regulate compounding pharmacies that reside within their borders. Many states are ill-equipped to police the jump in activity. Mississippi has a regulation that only FDA approved medications can be prescribed for weight loss. Compounded drugs do not meet that definition. California and Texas have stricter laws than most states regulating compounding pharmacies, although enforcement varies among states. Kansas, New Jersey, North Carolina and West Virginia had to clarify their regulations, and in some instances clarify them again after misinterpreting FDA regulations.
In theory compounding pharmacies are supposed to only compound drugs for specific patients, sort of bespoke or custom-made just for them. Compounding pharmacies are not generally allowed to mass produce generic drugs and wholesale them to clinics. Bulk production requires following a stricter set of standards. However, it appears many compounding pharmacies are illegally mass-producing weight loss drugs and wholesaling them to med spas, weight loss clinics, telemedicine providers and IV infusion clinics.
Experts compare policing weight loss drug compounding to playing ‘Wack-A-Mole’. Many of the complaints are from offshore mail-order pharmacies who supply patients online. Drugmakers are filing dozens of lawsuits alleging that pharmacies are breaking their patents for profit. It’s ultimately up to patients to be vigilant and scrutinize where they obtain their weight loss medications. However, it’s not clear that many patients, enjoying prices a fraction charged by the drug makers, care that their drugs were made in a compounding pharmacy.