Compounded GLP-1s vs. Big Pharma: What's the Controversy?

The battle over compounded versions of blockbuster weight-loss drugs like semaglutide (Ozempic, Wegovy) and tirzepatide (Mounjaro, Zepbound) has turned into one of the most talked-about pharmaceutical fights in years.

Millions of people—many of whom have never heard of a compounding pharmacy until now—are suddenly caught in the middle. Some know exactly what they're getting and choose compounded versions because they’re cheaper or easier to access. Others have no idea their medication isn’t the FDA-approved brand.

Now, as legal threats heat up and the FDA tightens the rules, patients and providers are left scrambling. We're here to hear both sides out without taking a side.

compounding pharmacies vs big pharma graphic

FULL DISCLOSURE: The author of this article uses tirzepatide (Zepbound). She has been on it since January 19, 2025, and got her first two months of prescriptions through a compounding pharmacy. When the FDA ruled on tirzepatide, she switched to Lilly Direct to get Zepbound from the manufacturer.

The Compounded GLP-1 Controversy Summarized

The controversy centers on compounded versions of GLP-1 drugs like semaglutide and tirzepatide, which are used for diabetes and weight loss.

While these drugs are protected by patents held by Novo Nordisk and Eli Lilly, federal law allowed compounding pharmacies to produce versions during official FDA-declared shortages.

That loophole closed when the FDA announced in late 2024 and early 2025 that manufacturers could once again meet demand—making most compounding of these drugs no longer legally permitted unless there's a documented clinical need.

Yet compounding continues, and the controversy isn’t just alive—it’s getting louder and more litigious.

How Compounding Pharmacies Got Involved in GLP-1s

Compounding pharmacies are licensed to mix or tweak medications to suit individual patient needs. Maybe someone needs a smaller dose. Or can’t tolerate a certain ingredient. Or just can’t take injections. That’s where these pharmacies come in.

When demand for GLP-1 drugs exploded in 2022, manufacturers couldn’t keep up. Nationwide shortages followed. That’s when compounders stepped in. Under a federal rule—Section 503A of the Food, Drug, and Cosmetic Act—they were allowed to make copies of FDA-approved drugs during official shortages. As long as they had a valid prescription, they could fill the gap.

That created a booming side industry. Telehealth platforms and compounding pharmacies partnered up. More affordable options appeared overnight. And lots of people who couldn’t access the big-name drugs finally had a way to stay on track.

WORDING MATTERS: Keep in mind the phrase “essentially a copy”—it’s a big deal, and here’s why: under federal law, compounding pharmacies are only allowed to make medications that are essentially copies of FDA-approved drugs if those drugs are officially listed as being in shortage. Once the shortage ends, that exception disappears. So whether a compounded GLP-1 is considered “essentially a copy” or not becomes the line between legal and illegal.

The Legal Rights of Compounders

The law lets compounding pharmacies operate—but with boundaries. Section 503A covers state-licensed pharmacies. They can only copy a drug if it’s on the FDA’s official shortage list. Larger compounders, known as outsourcing facilities, fall under Section 503B with slightly different regulations.

States add their own layers. Most require licenses, inspections, and strict safety standards. These pharmacies can’t mass-produce or sell to the public. They need real prescriptions and clean records.

The idea is to keep patients safe while allowing flexibility when supply chains break down.

What Changed—and Why Now?

Fast-forward to late 2024. Drugmakers told the FDA they could meet demand again. So the FDA declared the shortages over—tirzepatide in October, and semaglutide in February 2025.

That changed everything.

Compounders could no longer legally copy these drugs unless there was a clear clinical reason—like a patient allergy—and it had to be documented.

Not everyone agreed with that timeline. The Outsourcing Facility Association (OFA) sued the FDA. They said the shortages weren’t really over, and pulling the plug too fast would hurt patients.

While the lawsuit played out, some pharmacies kept going. The FDA said it wouldn't take punitive action during that time. But when a judge tossed the OFA’s case in March 2025, the FDA made it official. Tirzepatide compounding had to stop by March 19. Semaglutide by April 22—with a short grace period for larger facilities.

The window closed. Fast.

Why Some Pharmacies Didn’t Stop

Still, many compounding pharmacies continued to operate. Their reasons?

Patients Still Need It: They argued that, despite the FDA’s national declaration, patients in many areas still couldn’t get the branded drug. Or they couldn’t afford it. Compounders felt it was their ethical duty to keep filling that gap.
Legal Gray Area: The lawsuit had created a murky in-between. Some pharmacies saw the ongoing case as a reason to stay the course—at least until the courts ruled.
Not "Essentially a Copy": Some compounders argued that what they were offering wasn’t technically a copy at all. They were creating custom doses, different delivery methods, or allergen-free versions that weren’t commercially available. In their view, these weren’t copies—they were medical necessities.

But with the case dismissed and deadlines passed, the FDA says there’s no more wiggle room. Compounders who keep going now risk serious penalties. What starts with inspections and warning letters could lead to pharmacies losing their license, fines, or even criminal charges. Will it come to that?

Did You Know: Compounding Pharmacies Don't Produce FDA-Approved Medications

It might surprise you, but even when a compounding pharmacy uses the same active ingredient as a brand-name drug, what they produce is not FDA-approved. That’s not a flaw—it’s by design.

Here’s why: FDA approval is a lengthy and expensive process that involves years of clinical trials, laboratory testing, manufacturing reviews, and data submissions. Brand-name drugs like Ozempic or Mounjaro have passed every one of those steps. At that time, the company also secures a patent on the drug, giving them exclusive rights to make and sell it for a number of years.

Compounding pharmacies, on the other hand, aren’t making mass-produced drugs for the general public. They’re customizing medications for individual patients, often changing the dose, form, or ingredients based on specific needs. Because every batch is unique and made in small quantities, the FDA doesn’t review or approve it the same way it does with commercial drugs.

So even if a compounded medication contains semaglutide or tirzepatide, it’s not the same as the FDA-approved version—and legally, it can’t be marketed as such. The pharmacy may be using part of the same science, but they’re not going through the same approval process.

That’s why compounded drugs live in a separate legal category: permitted under certain conditions, but never FDA-approved.

What Compounding GLP-1 Clients Need to Know

Compounding pharmacies aren’t supposed to make exact copies of FDA-approved drugs—but with semaglutide and tirzepatide, the line has been blurry. Many patients assume they’re getting the same medication as Ozempic, Wegovy, or Mounjaro—just in a cheaper or easier-to-get form. And that’s exactly the gray area where things start to slip.

In reality, compounded versions often aren’t chemically identical to the FDA-approved drugs. Here are some ways they veer away from FDA-approved versions:

Some pharmacies have used semaglutide sodium or semaglutide acetate—salt forms not used in the original products. These variants haven’t been tested or approved by the FDA, and they may behave differently in the body. In fact, the FDA issued a letter of concern detailing this.
Others may compound different doses, claiming that a different dose isn't "essentially a copy." For example, my first tirzepatide dose was 3.3mg through a compounding pharmacy. The official approved maintenance dose is 2.5mg. When I was ready to titrate up, I went to 6.6 mg instead of the name-brand, FDA-approved 5 mg.
Compounders can also use different delivery systems (like oral drops instead of injections), or skip over rigorous quality control procedures that FDA-approved drugs are required to follow.
A pharmacy might claim its products come from an FDA-registered facility. That simply means a business that has filed its information with the FDA because it makes, handles, or stores products the FDA regulates—such as drugs, devices, or food—intended for sale in the U.S. It has little to do with an FDA-approved medication.

All this piles on to why the FDA and drugmakers have raised red flags. When the active ingredient isn’t an exact match, when dosing standards are unclear, or when patients don’t always realize what they’re actually receiving, the risk rises—and so does the legal pressure.

Of course, this is more than an ethical debate. There’s a lot of money on the line.

Big Pharma's Turn: What They Want and How They're Pushing Back

Drugmakers like Novo Nordisk and Eli Lilly aren’t sitting this out—and from their perspective, they have good reason not to. These companies developed semaglutide and tirzepatide, poured billions into clinical trials, and hold patents that protect their right to exclusively manufacture and sell these drugs into the 2030s.

They argue that allowing compounding pharmacies to continue making versions of these medications isn’t just a business issue—it’s a legal and safety one. Here’s their position:

Patent Violation: Compounded versions made after the shortages ended may violate intellectual property rights.
Safety Risks: The companies point to testing data and FDA warnings showing that some compounded versions contain incorrect dosages, unapproved salt forms, or potentially dangerous impurities.
Misleading Marketing: They’ve taken issue with phrases like “generic Ozempic” or “compounded Mounjaro,” arguing these mislead patients into thinking they’re getting the same thing as an FDA-approved drug—which they’re not.
Undermines Innovation: If patent protections aren’t enforced, they argue, it sets a precedent that discourages future investment in research and development. Why spend billions if the product can be copied and sold before the patent runs out?

Their message from Big Pharma is clear: compounded GLP-1s aren’t just unapproved—they’re potentially unsafe, legally questionable, and a threat to public trust in medications.

They want the FDA to take strong enforcement action and for compounding to return to its original purpose—serving niche medical needs, not standing in as cheaper alternatives to billion-dollar blockbusters.

INNOVATION 101: How Patents Work in Pharmaceuticals

Patents are crucial in the pharmaceutical industry, granting inventors exclusive rights to prevent others from making, using, or selling their inventions for up to 20 years. This exclusivity incentivizes innovation by allowing companies to recoup significant investments in research and development.

Pharmaceutical patents can cover new chemical entities, drug formulations, manufacturing processes, and even new uses for existing drugs. Regulatory exclusivity, separate from patents, may also be granted by agencies like the FDA, further delaying generic competition.

Once patents and exclusivities expire, generic versions can enter the market, typically leading to lower drug prices.

Here's where the patents stand for semaglutide and tirzepatide.

Semaglutide (Ozempic, Wegovy, Rybelsus):

In the United States, the key compound patent for semaglutide (Ozempic) expires in December 2031, with some method-of-use patents extending to June 2033.
For Wegovy and Rybelsus, certain patents extend protection until approximately 2040.
In China, the main product patent for semaglutide expires in 2026, but a separate patent covering cardiovascular indications lasts until 2037.

Tirzepatide (Mounjaro, Zepbound):

The core composition of matter patent for tirzepatide expires in January 2036 in the U.S.
Additional formulation patents may extend protection until 2039.
Exclusivity for tirzepatide as a new chemical entity lasts until May 2027, but patent protection remains the main barrier to generics until at least 2036.

The FTC Enters the Controversy

In 2024, the Federal Trade Commission (FTC) launched an investigation into Novo Nordisk and several other pharmaceutical companies over concerns about “junk” patents—patents the FTC claims were improperly listed in the FDA’s Orange Book.

According to the agency, these listings were designed to block or delay generic competition by extending market exclusivity beyond what’s legally justified. Semaglutide, the active ingredient in Ozempic and Wegovy, is among the drugs under scrutiny.

The FTC argues that such tactics may unfairly keep lower-cost alternatives off the market and hurt consumers by limiting access and driving up prices.

The Legal Actions of Big Pharma

Both Novo Nordisk and Eli Lilly have taken aggressive legal action to protect their GLP-1 drugs—semaglutide and tirzepatide—from what they view as unlawful compounding and misrepresentation.

Eli Lilly's Legal Efforts

In April 2025, Eli Lilly filed lawsuits against Strive Pharmacy and Empower Pharmacy, accusing them of marketing unapproved tirzepatide products and making misleading claims about their safety and effectiveness. The suits also allege these pharmacies referenced Lilly’s clinical data to imply legitimacy, despite having no connection to the FDA-approved Mounjaro or Zepbound.

These cases build on previous legal action taken by Lilly against more than 20 medical spas, telehealth providers, and compounding pharmacies that offer products advertised as containing tirzepatide.

Lilly’s complaints include unauthorized sales, marketing compounds as “generic Mounjaro,” and other misleading tactics. The company has also sent cease-and-desist letters to around 50 providers, demanding proof that they have stopped compounding tirzepatide in violation of the law.

Novo Nordisk Gets Litigious

Novo Nordisk has filed at least 21 lawsuits in the U.S. targeting compounding pharmacies, wellness clinics, and med spas accused of selling compounded products labeled as semaglutide. In some instances, tests showed these products had serious quality issues—including high levels of impurities (up to 33%) and underdosed formulations (up to 19% less than labeled). Some didn’t contain semaglutide at all.

Novo Nordisk’s lawsuits focus on protecting its intellectual property and warning the public about safety risks. Novo has also intervened in lawsuits involving compounders and the FDA, signaling its intent to escalate enforcement wherever possible.

Together, these legal efforts signal a unified strategy: protect patents, shut down misleading marketing, and make clear that there is no such thing as “generic Ozempic” or “compounded Wegovy” that meets the standards of the real thing.

WAIT! There's No Generic GLP-1? For a drug to have a true generic version, its patent must expire and the FDA must approve a copy that’s proven to be just as safe and effective as the original. Right now, semaglutide and tirzepatide are both still under patent protection, likely through the mid-to-late 2030s. Until then, no one can legally make or sell a generic version. So if you see something labeled “generic Ozempic” or “generic Mounjaro,” it’s either a compounded version or a misleading claim—not an FDA-approved generic drug.

The Plot Thickens: "Demonstrably Difficult to Compound" Effort

Here’s where things get even more complicated. Brand-name drugmakers are now pushing for semaglutide and tirzepatide to be added to the FDA’s Demonstrably Difficult to Compound (DDC) list. That’s a formal list of drugs the FDA considers too complex, unstable, or risky to safely reproduce in compounding pharmacies.

If the FDA agrees, it would become illegal for most pharmacies to compound these GLP-1s, except in very limited, tightly regulated situations. That would effectively shut down the compounding workaround and protect the drugmakers’ market exclusivity.

Supporters say it’s about patient safety—these are complex drugs that require precision. Critics say it’s a strategic power play to lock down control of the market and eliminate more affordable alternatives.

The FDA's Role in the GLP-1 Compounding Controversy

So, where does the FDA actually stand? The answer is: right in the middle. The FDA isn’t siding with compounding pharmacies or drug companies outright—it’s trying to enforce the law, maintain safety, and keep the system from spinning out.

The agency allowed compounding of GLP-1 drugs when there was a clear, documented shortage. That’s the legal framework. Once the shortages were declared over, the FDA was obligated to step back in and end the workaround—regardless of how patients or providers felt about it.

But the FDA has also raised independent concerns. They’ve received reports of adverse events, inconsistent dosing, and issues with salt forms in compounded versions of semaglutide.

From a safety standpoint, the agency sees a difference between enforcing patents and protecting people. In this case, they believe both are being tested.

Still, the FDA has no power to “approve” compounded drugs. That’s not how the system is set up. Its job is to monitor safety, enforce compliance with the law, and intervene when the boundaries—like what counts as “essentially a copy”—are being pushed too far.

So is the FDA siding with Big Pharma? It depends on who you ask. But from their seat, it’s not about loyalty—it’s about drawing a line between what's legal, what's safe, and what puts patients at risk.

Stuck in the Middle: How the GLP-1 Compounding Controversy Impacts Patients

For anyone using a compounded GLP-1, this is more than a news story. It’s personal. And it’s stressful.

You might lose access. The affordable version you’ve been using may disappear.
You might be confused. Pharmacies and providers are all saying different things. It’s hard to know what’s legit.
You might face more risk. Some compounded meds haven’t been tested the same way as FDA-approved versions.
You might still qualify. If you have a specific medical reason—like an allergy or swallowing issue—you could still get a compounded version. But it needs documentation. And not every pharmacy will do it.

If you’ve got a valid prescription from a licensed healthcare provider and you’re getting your medication from a legitimate compounding pharmacy, you’re not breaking any laws.

The legal heat is aimed at the pharmacies that might be violating FDA rules or infringing on drug patents—not the people filling their prescriptions.

That said, if someone’s buying compounded GLP-1s without a prescription or from a sketchy, unlicensed source, that’s a different story. That can cross into illegal territory depending on state or federal laws.

How I Chose Between Compounded GLP-1 and Name Brand

I found myself at the intersection of "what should I do?" and "I don't want to stop" when the compounding crackdown happened. Doing my research, I found that Eli Lilly started offering vials for cash patients through Lilly Direct.

I didn't love the idea of having to fill a needle from a vial and inject myself, but to save $600 a month? The higher cost would sting more. Then, I crunched the numbers; Lilly Direct's pricing, locked in indefinitely, would be about $50 less per month than the compounded version. (I was paying $545 for a compounded version and $40 for overnight shipping. Lilly Direct's free shipping all-in cost is $504 for the 7.5mg and 10mg versions.)

Plus, it put me on the name brand in case shortages happened again, and avoided risking my compound source being shut down or closing shop without enough notice. As a Lilly Direct customer, I would at least be IN LINE for the product and not stuck on the outside. I didn't choose a side; I chose ME.

Why Can't Big Pharma Just Lower Drug Prices?

It’s a fair question—and one that’s been asked louder than ever with the soaring costs of GLP-1 drugs like Ozempic, Wegovy, Zepbound, and Mounjaro.

Many Americans pay far more for these medications than people in other countries, where prices are often capped or negotiated by the government. But in the U.S., drugmakers can set their own prices, and the government has little room to negotiate directly.

Pharmaceutical companies like Novo Nordisk and Eli Lilly argue that their prices reflect the value of the drugs, the high cost of innovation, and the need to fund future research. For anyone using the auto-injector pen, that's a good chunk of the price too—another reason I like the vial.

At its core, the U.S. pharmaceutical pricing model relies on market forces, patent protections, and intermediaries like pharmacy benefit managers—all of which create an environment where lowering prices is not simple or expected, even when demand is massive and public pressure is high.

At the same time, Lilly Direct was a smart (albeit strategic) step forward, which put a more affordable version of tirzepatide out there. Novo Nordisk also opened NovoCare Pharmacy to cater to the uninsured, denied insured, or cash patients.

“With NovoCare Pharmacy, patients and prescribers have another option that provides convenient access to all doses of real, FDA-approved Wegovy at a reduced cost in our high-quality pen.” —Dave Moore, EVP, U.S. Operations and Global Business Development and President of Novo Nordisk Inc.

“The OAC applauds Lilly for another step forward in improving the affordability of obesity treatment,” said Joe Nadglowski, president and CEO of the Obesity Action Coalition. “However, we still have a long way to go in building a health care system that provides comprehensive care, coverage and payment of such care for people with obesity that is free of weight bias.”

Ok, Why Can't Insurance Companies Cover the GLP-1 Medications?

If these medications work so well, why isn’t insurance stepping in to make them more affordable? The answer comes down to cost, coverage rules, and policy gaps.

GLP-1 drugs can cost over $1,000 a month—and they’re usually taken long-term. For insurers and employers, that adds up fast. Many simply don’t want to absorb those high, ongoing costs, especially for a condition like obesity, where the financial benefits (like fewer hospitalizations or chronic conditions) may not show up for years.

The hesitance also includes avoiding skyrocketing premiums should an insurance company decide to cover weight loss GLP-1s.

Even when plans offer coverage, they often attach strict requirements—like needing a certain BMI, documented health issues, or prior attempts at weight loss through other methods.

Then there’s the Medicare problem: the law still prohibits Medicare from covering weight loss drugs, regardless of how effective they are. Medicaid coverage varies wildly by state, and there’s no federal requirement for private plans to cover them either.

At the end of the day, coverage isn’t just a medical issue—it’s a business decision.

Conclusion: A Tipping Point for Access, Safety, and Control

The compounded GLP-1 controversy isn’t just a fight over who gets to make and sell weight-loss drugs—it’s a collision of patient need, market control, legal gray areas, and systemic flaws in how the U.S. handles medication access.

On one side, you have patients desperate for affordable, effective treatment. On the other, pharmaceutical giants defending their patents, regulatory agencies navigating legal limits, and insurers dragging their feet on coverage.

Everyone involved has a point:

Compounders are filling a gap
Big Pharma is protecting its investment
Insurance companies want to keep premiums low
The FDA is trying to keep the system from veering off course

But in the middle of it all are the people who just want help losing weight, managing diabetes, and improving their health—without having to choose between safety, legality, and affordability.

Whether the system evolves to meet demand—or just tightens its grip—will shape the next chapter in the GLP-1 era. For now, it’s a waiting game. And the stakes are as high as the price tags.