Medico-Legal Expert Questions Sustainability of Low-Cost, Compounded GLP-1 Drugs for Weight Loss

Greensboro, NC—Jeffrey Segal MD, JD, a medico-legal expert and the founder of Medical Justice, discussed the shifting dynamics of the market for GLP-1 receptor agonist medications in a recent blog, “The Whirlwind World of GLP-1 Medications for Treatment of Obesity and Diabetes.”

GLP-1 medications, which include semaglutide and tirzepatide, became popular for their effectiveness in treating obesity and type II diabetes. But rising popularity led to shortages of name-brand options, legally allowing compounding pharmacies to dispense near-identical drugs to meet patient demand with products sold at much lower price points. Meanwhile, name-brand manufacturers have grappled to resolve shortages and once again monopolize distribution and monetization. Dr. Segal’s blog provides an incisive analysis of the broader implications for healthcare providers and patients.

“Patients got a taste of low-cost alternatives for medications that could significantly impact their health, and it’s hard to see the genie going quietly back into the bottle,” said Dr. Segal, who is a board-certified neurosurgeon and attorney. “The legal, ethical, and economic questions raised by this debate extend far beyond these specific drugs—they touch the core of how we balance innovation, accessibility, and regulation in medicine.”

Central to the controversy is the FDA’s October 2024 announcement resolving the shortage of tirzepatide, which is marketed as Mounjaro and Zepbound by Eli Lilly. The agency’s declaration led to increased restrictions on compounding pharmacies that had been supplying cost-effective alternatives, as they can no longer compound the drug “regularly or in inordinate amounts” once the original manufacturers have the product availability and manufacturing capacity to meet the present and projected national demand. While the FDA’s rationale hinges on the restored supply of FDA-approved medications, the Outsourcing Facilities Association (OFA) pushed back on the FDA’s determination by swiftly filing a lawsuit alleging procedural errors and undue reliance on manufacturer data.

In response, the FDA temporarily stayed its decision, allowing compounded tirzepatide to remain available. “The FDA’s actions raise questions about how regulatory agencies calculate supply and demand for life-altering medications,” Dr. Segal noted. “These decisions ripple through the healthcare system, affecting everyone from physicians prescribing these medications to patients who depend on them to manage chronic conditions or improve a broad range of other long-term health metrics.”

Dr. Segal’s blog goes on to discuss the implications for both physicians and patients. For healthcare providers, the situation underscores the need for vigilance when navigating treatment options. With compounded versions costing as little as $100 per month—compared to over $1,000 for branded drugs—many physicians have turned to these alternatives to meet patient needs, which typically require 6-12 months of consistent use to achieve optimal outcomes. However, legal threats from manufacturers like Eli Lilly, which has issued cease-and-desist letters to compounding pharmacies, complicate these decisions.

“This is a prime example of a medico-legal gray area that Medical Justice works to help physicians navigate,” said Robin Mahaffey, Chief Operations Officer of Medical Justice. “Doctors are often caught between advocating for their patients and adhering to evolving legal guidelines. Our mission is to provide support and direction in these complex scenarios.”

The GLP-1 saga highlights a broader issue: the tension between pharmaceutical innovation and affordability. Dr. Segal predicts that the current standoff may accelerate price reductions for branded medications, driven by competitive pressures, payer demands, and potential legislative action.

“The status quo is unsustainable,” Dr. Segal explained. “Insurance carriers and lawmakers will feel the heat from patients and healthcare providers, pushing for solutions that balance affordability and profitability. Meanwhile, new market entrants will challenge existing monopolies, and international importation options could also gain traction—all of which will likely play out in a very public way.”

As the medico-legal landscape evolves, Medical Justice works with physicians to address the challenges of prescribing in a legally and ethically complex environment. Through its protection plans, educational resources, and advocacy, the organization empowers doctors to provide the best care possible while safeguarding their personal and professional integrity.

For more information on Medical Justice’s services, including medico-legal protection plans and reputation management, visit medicaljustice.com.