By Ike Swetlitz and Madison Muller | Bloomberg
The first dose of a copycat weight-loss drug Lindsay Posey took from a new pharmacy worked well. The second didn’t quite suppress her appetite. It was the third dose that she thinks caused her trouble.
Acne erupted on her cheeks, nose, chin and forehead.
“My skin just went absolutely crazy,” said the 38-year-old who works in online customer service. Acne isn’t listed as a side effect of the FDA-approved formulation.
Also see: Hims & Hers to sell inexpensive Ozempic alternative
Posey had resorted to buying the knock-off medicine through a telehealth company because she didn’t think her insurance would cover the brand-name version. She trusted the situation because the drugs were made at a licensed facility in the US. “It just seemed safe,” she said.
Her doctor suggested it might have been a problem with the medicine itself. “That’s not really something you want to hear,” Posey said.
The drugs were produced without going through the rigorous approval process required for brand-name or generic medications. They are made by so-called compounding pharmacies, an obscure corner of America’s pharmaceutical market that relies on a legal loophole to produce copies of treatments in short supply.
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Doctors worry this shadow industry may be putting patients at risk.
Normally focused on producing bespoke therapies, these pharmacies started making copies of weight-loss drugs en masse after demand outstripped the supply of Eli Lilly & Co.’s and Novo Nordisk A/S’s medications.
Health insurers aren’t racing to cover the roughly $1,000-a-month brand-name drugs, leading people to seek cheaper alternatives elsewhere. Bankers estimate compounders are making as much as $1 billion in annual weight-loss drug sales, but the haul could be much higher given how little information is available.
It’s rare for lucrative drugs to so quickly go into short supply and stay that way for this long, said Carson Riley, a vice president at Bourne Partners who specializes in compounding. He called the recent explosion of copycat weight-loss drugs “unprecedented.”
Also see: Ozempic mania’s billions in bills are coming for US taxpayers
Problems are cropping up all over. In Louisiana, one pharmacy produced nearly 300 vials of weight-loss shots without doing proper contaminant testing, according to state records. In Arizona, a pharmacy mixed the medicines in non-sterile conditions, state records show. Massachusetts’ and Mississippi’s pharmacy boards also have investigations underway.
It’s nearly impossible to know who’s taking these drugs.
Compounded medications are generally not paid for by insurance, putting them out of view of systems that normally track prescriptions. The FDA doesn’t monitor how many prescriptions are filled for compounded drugs and at least 20 state boards of pharmacy told Bloomberg they’re not keeping a record either.
In that blind spot, experts estimate hundreds of thousands of Americans are taking medicine that hasn’t been vetted by the FDA for safety and effectiveness the way a typical prescription drug would be. State regulators oversee one type of compounder and a federal license is required for another type that makes products in bulk. Because of the shortages, both types of pharmacies can make weight-loss drugs.
“I can’t say with any consistency that everybody’s doing it safely,” said Eric Kastango, a pharmacist who was an expert witness in a high-profile compounding lawsuit. Even with his background, he said there’s no “easy way to differentiate a good pharmacy from a pharmacy that I would stay away from.”
With brand-name weight-loss drugs costing over $1,000 a month, telehealth providers are luring in customers with lower prices. For $249 a month, Henry Meds offers a membership that includes dissolving tablets or droplets of semaglutide. The company also offers subscriptions for injectable drugs for more money.
Steven Peacock, chief medical officer of Henry Meds, said patients might prefer their offerings because they’re afraid of needles. When asked what data Henry Meds has to show their dissolving drugs are as effective as the shots, he didn’t provide any. Discussing the caliber of the company’s products, he said, “I’m very confident in the safety and efficacy of our medications.”
They aren’t exact replicas of what’s been approved by the FDA. Changing drugs from shots into other FDA-approved forms can take years of work. Neither Lilly nor Novo are selling weight-loss pills, though both are studying them — Novo’s is based on its shot, but Lilly’s is an entirely new medication. Research to get Lilly’s pill approved by the FDA is expected to take four years from start to finish.
When Hims & Hers Health Inc. said in May it was going to start offering compounded weight-loss drugs, its market value rose by nearly $900 million in a single day. The company announced Monday that it has appointed former Novo executive Kåre Schultz to its board.
Family offices, private equity firms and even “ordinary people” are trying to buy compounding pharmacies in hopes of making what could be millions of dollars a month, said Anthony Mahajan, a former federal prosecutor and founding partner of the law firm Health Law Alliance that represents compounding pharmacies.
“They’re making money hand over fist,” he said.
Prior to the advent of modern manufacturing, all medicines were compounded, meaning mixed from raw ingredients by pharmacists themselves. With the rise of the FDA, most drugmaking moved into facilities that were highly regulated by the government.
The agency chose not to exercise much oversight over those that continued to compound as they were usually making small quantities of drugs for individual patients. The FDA, for decades, essentially gave them a free pass.
Compounders started to work on a bigger scale in the 1990s and early 2000s, raising concerns. But lawmakers’ attempts to reform the system were successfully fought by pharmacies, resulting in scatter-shot regulation. That came to a head in 2012, when at least 64 people died and over 700 got sick from contaminated compounded drugs made by one pharmacy.
The following year, Congress passed a law more clearly laying out how compounders could operate. That established two categories of pharmacies and required higher levels of FDA oversight for those making drugs in bulk. But drugs in shortage can be made by either type.
“The quality chasm between manufacturing and compounding done at a pharmacist level is still quite wide and quite varied,” said Kastango.
An FDA spokesperson said in a statement that the 2013 law added more oversight to compounding and that the agency might inspect state-licensed facilities if there are serious issues. “Compounded drugs are not approved by the FDA,” the spokesperson said.
Last year, a patient injected a copycat version of Lilly’s Mounjaro made by Galleria Medical Pharmacy which allegedly caused burning and inflammation, according to state records. A Louisiana Board of Pharmacy investigation found the drug was not tested for sterility or endotoxins, which are fragments of bacteria. At least 297 prescriptions were made from five different lots of weight-loss drugs that hadn’t been tested properly.
Galleria said the problem that caused the person’s symptoms was due to a malfunctioning pH meter rather than toxins or a lack of sterility. “There was no finding that the lack of specified testing was associated with any adverse event,” the pharmacy said. Galleria has since been fined, replaced the faulty pH meter and added new training and compliance measures. “We have taken the matter very seriously and continue to be committed to addressing the concerns raised to ensure the highest standards of patient safety and pharmaceutical care,” the pharmacy said.
Just last month in Arizona, DeeFlat Pharmacy’s license was voluntarily suspended after the pharmacy board found that compounded weight-loss drugs were being made improperly. The pharmacy appeared to be compounding the drugs “under non-sterile conditions,” according to state records.
Some DeeFlat drugs weren’t labeled as compounded. A label said one was “Ozempic,” but it didn’t look like Novo’s product. In another case, a vial was labeled “research use only,” which generally means it shouldn’t be used in compounding. All in all, state records show the pharmacy allegedly dispensed “almost a thousand” prescriptions that were illegitimate, mislabeled, or misbranded, though it’s unclear if those were all for weight loss drugs. DeeFlat’s attorney, Mahajan of Health Law Alliance, declined to comment.
The spate of issues is causing concern for brand-name drugmakers, who are working to protect their products’ reputations. Lilly and Novo have been trying to limit compounding by filing dozens of lawsuits against compounding pharmacies and clinics offering copycats.
Novo alleged in suits that some compounded drugs had impurities or lower concentrations than they should. Lilly said in a press release that some contained bacteria, high levels of impurities and in one case, a drug was “nothing more than sugar alcohol.”
–With assistance from Jessica Nix and Naomi Kresge.
