FDA compounding allowance for semaglutide expires as copycats persist
The FDA's compounding allowance for semaglutide ended May 22, but Novo Nordisk says copycat sales continue, leaving unclear what patients using compounded versions can expect.
The FDA's temporary permission for pharmacies to make compounded copies of semaglutide — the active ingredient in Ozempic and Wegovy — expired on May 22, ending an allowance the agency had granted while Novo Nordisk's production capacity was limited [1].
Novo Nordisk said last month that sales of copycat versions of its treatments were continuing "under the false guise of 'personalisation'" [1]. The company has not said how many of those products are still being sold, and it has not been reported whether regulators have taken further action against pharmacies that continue to compound the drug since the May deadline [1].
A shrinking company behind a growing market
On September 10, Novo Nordisk announced it would cut 9,000 jobs, about 11 percent of its workforce, including 5,000 positions in Denmark [1]. The company said the cuts would save 8 billion kroner, about $1.3 billion [1]. It also lowered its earnings forecast for the third time this year, to operating profit growth of 4 to 10 percent, down from 10 to 16 percent [1]. Shares rose more than 3 percent in Copenhagen trading near midday after the announcement [1].
Novo Nordisk's workforce grew from 43,700 in 2020 to 78,400 [1]. Chief executive Mike Doustdar, who succeeded Lars Fruergaard Jorgensen in August, said: "Our markets are evolving, particularly in obesity, as it has become more competitive and consumer-driven. Our company must evolve as well" [1]. The company said its transformation plan reflected "the company's commitment to meet rising global demand while also competing in a more dynamic and consumer-driven obesity market, as evidenced by the recent slowdown in growth" [1].
Novo Nordisk faces competition from Eli Lilly's rival treatments [1]. The company's limited production capacity was what led the FDA to temporarily allow pharmacies to create the so-called "compound" or copycat versions in the first place [1].
Ozempic is an injectable diabetes treatment that became popular on social media for weight loss, and Wegovy contains the same active ingredient at a different dose as a weight-loss drug [1]. Both use analogs of the hormone GLP-1, which regulates blood glucose levels and appetite [1].
Analysts have been blunt about how the company got here. Jochen Stanzl, chief market analyst at the trading platform CMC Markets, said management "underestimated emerging competition and misjudged its own market position," adding that "investors who bought in at higher valuations are paying the price, as the stock now reflects fading hopes of a return to its earlier growth trajectory" [1].
Palle Sorensen, chief economist at Nykredit bank, said the 5,000 Danish job cuts were "significant," noting that "the Danish economy created 2,300 new job in June. So it is approximately equal to two months of job growth" [1].
Why it matters for patients
The May 22 expiry was supposed to close one route to compounded semaglutide, which has often been sold at prices below the brand-name versions. Novo Nordisk's statement suggests that route did not close in practice, which means patients may still run into compounded products sold as personalized prescriptions [1].
What that means for any individual patient is not spelled out in the company's comments or the FDA action described here. It has not been reported how many compounding pharmacies still make semaglutide copies, how those products are priced now, or what patients who currently receive a compounded version should expect at their next refill [1].
The job cuts and the lower profit forecast concern Novo Nordisk's corporate finances rather than the regulatory status of Ozempic, Wegovy or any compounded product. The company described the restructuring as a way to speed up decisions and move resources toward diabetes and obesity [1].
What happens next
The key dates so far: the FDA compounding authorization expired May 22 [1]; Novo Nordisk said last month that copycat sales were continuing [1]; and on September 10 the company announced the 9,000 job cuts and its third forecast reduction of the year [1].
It has not been reported whether the FDA plans further enforcement steps against pharmacies still selling compounded semaglutide, or when Novo Nordisk expects the copycat sales to stop. The company has said its transformation is aimed at a more competitive, consumer-driven obesity market, but it has not disclosed a timeline for completing the restructuring or for restoring its earlier growth rate [1].
Sources
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