Legal Challenges to Compounding Drugs for Weight Loss

Over the last three years, a combination of wildly growing demand and near-constant shortages have provided both compounding pharmacies and outsourcing facilities with strong financial incentives to move aggressively into the production and sale of semaglutide and tirzepatide. Although for simplicity's sake, we focus on semaglutide, broadly similar remarks apply to tirzepatide. This lucrative market has also proved very tempting to physicians working in the weight loss space. The fact that the predominant use of these drugs-to aid weight loss-is not typically covered by insurance, has sweetened the proverbial pot. Because reimbursement is not typically tied to federal health care programs, there is less risk from the attendant federal legal prohibitions on kickbacks and physician self-referral. Nevertheless, both compounders and clinical practices currently face significant legal risks from avoiding the branded products in favor of compounding and selling analogous drugs. We review some of the relevant history for semaglutide, including the regulatory framework and an overview of the additional risks of this novel trend in the compounding space. We should note at the outset that the following is only a cursory overview of the risks, which vary significantly and evolve rapidly. If you are considering compounding these drugs, you should seek jurisdiction specific advice from competent legal counsel.