The Compounded Semaglutide Controversy Explained

A $36 Billion Drug and the Pharmacies That Copied It
What Compounded Semaglutide Actually Is
The Shortage That Started Everything (2022-2025)
The FDA's Enforcement Timeline
Novo Nordisk's Legal Offensive
The Hims and Hers Saga
Safety Concerns: What Testing Revealed
The Salt Form Question
The Compounding Industry Fights Back
Patient Impact: Caught in the Middle
Where Things Stand in February 2026
FAQ
The Bottom Line
References

A $36 Billion Drug and the Pharmacies That Copied It

Semaglutide is the most commercially successful peptide drug in history. Novo Nordisk's semaglutide franchise --- Ozempic for diabetes, Wegovy for weight loss, Rybelsus for oral administration --- could reach $36 billion in revenue in 2026. The company estimates that as many as 1.5 million Americans were using compounded versions of its drug as of January 2026.

Those 1.5 million patients represent the heart of a controversy that has pulled in the FDA, federal courts, compounding pharmacies, telehealth platforms, the U.S. Department of Justice, and one of the largest pharmaceutical companies in the world. At stake: patient access, drug safety, intellectual property, and billions of dollars.

This is the full story of how compounded semaglutide went from a niche pharmacy practice to a national battle, and where the fight stands now.

What Compounded Semaglutide Actually Is

Compounding is the practice of a pharmacy creating a medication tailored to an individual patient's needs. It's been part of American pharmacy for centuries --- adjusting doses, removing allergens, changing formulations from pills to liquids. The practice is legal and, in many cases, medically necessary.

Compounded semaglutide refers to versions of the semaglutide molecule produced by compounding pharmacies rather than manufactured by Novo Nordisk. These products are not FDA-approved. They haven't gone through the FDA's review process for safety, effectiveness, and quality. They aren't subject to the same manufacturing standards as FDA-approved drugs.

Under normal circumstances, compounding pharmacies cannot copy commercially available drugs. But federal law includes an exception: when a drug is in shortage, compounding pharmacies can produce copies to meet patient demand. This exception opened the door to compounded semaglutide --- and the controversy that followed.

There are two types of compounding pharmacies relevant to this story:

503A pharmacies (state-licensed) compound medications based on individual prescriptions. They're regulated primarily by state boards of pharmacy.

503B outsourcing facilities (federally registered) compound larger batches without individual prescriptions and are regulated directly by the FDA. They were created by the Drug Quality and Security Act of 2013 following a deadly meningitis outbreak linked to contaminated compounded drugs.

Both played major roles in the semaglutide controversy.

The Shortage That Started Everything (2022-2025)

The compounded semaglutide market didn't emerge from nowhere. It grew directly out of a supply crisis.

Beginning in early 2022, demand for semaglutide and tirzepatide outstripped Novo Nordisk's and Eli Lilly's manufacturing capacity. Prescriptions surged 442% between January 2021 and December 2023. Off-label use for weight loss drove a significant portion of that growth. The FDA placed semaglutide on its official drug shortage list.

For patients, the shortage meant pharmacies couldn't fill their prescriptions. Diabetic patients who'd been stable on Ozempic couldn't get refills. Weight loss patients starting new prescriptions found empty shelves.

For compounding pharmacies, the shortage created a legal opening and an enormous commercial opportunity. Under Section 503A and 503B of the Federal Food, Drug, and Cosmetic Act, pharmacies could compound copies of semaglutide while it remained on the FDA shortage list. And they did --- aggressively.

The compounded market exploded. Telehealth platforms partnered with compounding pharmacies to offer semaglutide at a fraction of brand-name prices. Patients who couldn't afford $1,000+/month for Ozempic or Wegovy could access compounded versions for $200-$500/month. The value proposition was clear, and demand was overwhelming.

The FDA's Enforcement Timeline

The FDA's approach to compounded semaglutide evolved from tacit permission to active enforcement over three years. Here's the timeline:

2022-2024: The shortage period. With semaglutide on the official shortage list, compounding was permitted under federal law. The FDA did not actively restrict compounding pharmacies from producing semaglutide copies, though it expressed ongoing concerns about quality and safety.

February 2025: Shortage resolved. The FDA removed semaglutide from the drug shortage list, determining that Novo Nordisk could meet U.S. demand for both Wegovy and Ozempic. This was the triggering event that changed the legal picture entirely.

April 22, 2025: 503A pharmacies must stop. The FDA clarified that the enforcement discretion period ended for state-licensed compounding pharmacies on this date. These pharmacies were no longer legally permitted to compound copies of semaglutide.

April 2025: Court ruling. A federal court dismissed an attempt by compounding pharmacies to continue production. U.S. Judge Mark Pittman in Texas rejected a preliminary injunction, confirming that small-scale compounders had to immediately stop.

May 22, 2025: 503B facilities must stop. The deadline for larger, federally registered outsourcing facilities. After this date, no compounding pharmacy of any type had legal authorization to produce semaglutide copies under the shortage exemption.

September 2025: Warning letter blitz. The FDA issued more than 50 warning letters to U.S. and international companies that compounded or manufactured GLP-1 semaglutide and tirzepatide. The warnings targeted false or misleading marketing claims --- specifically, claims that compounded products were "generic versions" or contained the "same active ingredient" as FDA-approved drugs.

September 2025: Supply data confirms impact. FDA shipping data showed that semaglutide shipments from compounders dropped 90% from June 2024 to June 2025. Tirzepatide shipments fell 34% over the same period. The enforcement actions were working.

February 6, 2026: New enforcement priorities. FDA Commissioner Martin Makary announced definitive enforcement priorities, stating the agency's intent to "take decisive steps to restrict GLP-1 active pharmaceutical ingredients (APIs) intended for use in non-FDA-approved" compounded products. The FDA also moved to restrict specific ingredients used in mass-marketed compounded GLP-1 products and crack down on misleading advertising.

February 2026: Advertising enforcement. The FDA declared that companies cannot promote compounded products by claiming they are generic versions or equivalent to approved drugs, or by stating that compounded drugs use the same active ingredient or produce the same clinical results.

Novo Nordisk's Legal Offensive

While the FDA pursued regulatory enforcement, Novo Nordisk waged a parallel battle in the courts.

The scale of litigation. Novo Nordisk has filed approximately 130 lawsuits related to compounded semaglutide, spanning 40 states. Defendants include compounding pharmacies, medical spas, weight loss clinics, and telehealth platforms.

Early lawsuits (2024). In May 2024, Novo filed 9 initial lawsuits against medical spas, weight loss clinics, and pharmacies. The company's legal theory combined patent infringement, consumer fraud, and deceptive marketing claims. These were test cases that established legal precedents.

Scaling up (2025). The campaign expanded to 14 new lawsuits and 132 total complaints across 40 states. Courts granted 44 permanent injunctions barring defendants from compounding semaglutide and marketing products as FDA-approved or equivalent to Novo Nordisk's branded medications.

What testing revealed. Novo Nordisk's legal filings included laboratory testing results that bolstered its safety arguments. Testing of compounded semaglutide purchased from defendants revealed products containing no semaglutide at all, impurities up to 24% in early testing, and up to 86% impurities in more recent samples. These findings gave courts concrete safety evidence to support injunctions.

The patent weapon. U.S. Patent No. 8,129,343 protects the chemical structure of the semaglutide molecule itself. This patent doesn't expire until December 2031. Any compounding pharmacy producing semaglutide --- regardless of whether it's in shortage or not --- potentially infringes this patent. The shortage exemption addressed FDA regulatory restrictions, not patent law. Novo Nordisk chose not to enforce its patent during the shortage period but has moved aggressively since.

The Hims and Hers Saga

The most dramatic chapter in the compounded semaglutide story involves Hims & Hers Health, one of the largest telehealth platforms in the United States.

The partnership that wasn't. In April 2025, Novo Nordisk and Hims & Hers announced a collaboration to make obesity care more accessible and affordable. Patients would access NovoCare Pharmacy through the Hims & Hers platform. It appeared to be a détente --- the pharmaceutical giant and the telehealth disruptor working together.

The truce lasted less than two months.

The breakup. Novo Nordisk terminated the deal in June 2025, accusing Hims of illegally mass-compounding drugs under the false guise of personalization. Novo alleged that Hims was producing standardized batches of compounded semaglutide and calling them "personalized" to exploit a regulatory loophole. The collaboration dissolved into hostility.

The lawsuit (February 2026). On February 9, 2026, Novo Nordisk filed a federal patent infringement lawsuit against Hims & Hers in the U.S. District Court for the District of Delaware. The case targets Hims' continued sale of compounded weight loss drugs that Novo alleges infringe U.S. Patent 8,129,343.

The lawsuit alleges willful infringement. Novo Nordisk notified Hims of the patent on February 8, 2026, demanding the company stop selling compounded semaglutide products. Hims continued offering the products after receiving notice --- a fact that, if proven, could increase damages in a patent case.

Market impact. The lawsuit sent shockwaves through financial markets. Novo Nordisk's Copenhagen-listed shares climbed more than 3% on the news, while Hims' NYSE-listed stock fell more than 18%.

Novo is asking the court to permanently ban Hims from selling compounded semaglutide products that infringe its patents and to award damages.

The DOJ referral. The Department of Health and Human Services Office of the General Counsel referred Hims & Hers to the Justice Department for potential violations of the Federal Food, Drug, and Cosmetics Act. This adds criminal liability risk on top of the civil patent dispute.

Safety Concerns: What Testing Revealed

The safety arguments against compounded semaglutide rest on both regulatory logic and specific findings.

Adverse event reports. As of April 30, 2025, the FDA had received 520 adverse event reports related to compounded semaglutide and 480 reports related to compounded tirzepatide. Many involved dosing errors --- patients measuring and self-administering incorrect doses from multi-dose vials, and healthcare professionals miscalculating doses. Some required hospitalization.

Purity testing. Novo Nordisk's testing of compounded products from defendants in its lawsuits found alarming results: some products contained no semaglutide at all, while others had impurity levels reaching up to 86%. Standard pharmaceutical manufacturing maintains impurity levels far below 1%.

Fraudulent products. The FDA documented cases of outright fraud --- compounded semaglutide marketed with false labels listing pharmacies that didn't exist, or bearing the name of licensed pharmacies that didn't actually compound the products.

Dosing risks specific to compounding. FDA-approved semaglutide products (Ozempic, Wegovy) come in pre-filled pens with fixed dosing. Compounded versions often come in multi-dose vials requiring patients to draw their own doses. The margin for error --- wrong concentration, wrong volume, wrong injection technique --- is substantially larger.

The no-clinical-data problem. Compounded semaglutide products have never been through clinical trials. While they contain (or claim to contain) the same molecule as Ozempic, differences in formulation, stabilizers, pH, and manufacturing conditions can affect how the drug behaves in the body. Bioequivalence --- the proof that a copy works like the original --- hasn't been demonstrated for any compounded semaglutide product.

The Salt Form Question

One of the most technically complex issues in the controversy involves salt forms.

Some compounded semaglutide products use semaglutide sodium or semaglutide acetate rather than the free-base semaglutide used in FDA-approved products. The FDA's position is that these are different active ingredients, not the same drug in a different form.

Why this matters: salt forms can affect a drug's stability, absorption, bioavailability, and potency. A semaglutide sodium product isn't necessarily equivalent to a semaglutide free-base product in clinical effect. Patients and prescribers may assume they're getting the same drug when they're actually getting a chemically distinct compound with no clinical data supporting its use.

The salt form issue also has legal implications. Compounding pharmacies argued that producing semaglutide sodium or acetate meant they weren't copying the FDA-approved drug --- they were making a different product. The FDA rejected this argument, maintaining that these products are marketed as semaglutide equivalents and should be treated accordingly.

The Compounding Industry Fights Back

The compounding industry hasn't accepted the FDA's position quietly.

The Outsourcing Facilities Association lawsuit. When the FDA removed semaglutide from the shortage list, the Outsourcing Facilities Association sued, calling the decision "reckless and arbitrary." The group argued that the shortage wasn't truly resolved and that removing semaglutide from the list would harm patients who relied on compounded alternatives.

Antitrust claims. An Arizona-based compounding pharmacy, Strive Specialties, filed an antitrust lawsuit accusing Eli Lilly and Novo Nordisk of unlawfully restricting competition in the GLP-1 market. Strive argues it introduced meaningful price competition by offering compounded GLP-1 medications "at a fraction of the price" and claims the pharmaceutical companies responded by working to limit prescriptions for compounded drugs rather than competing on price.

The access argument. Compounding advocates make a straightforward case: brand-name semaglutide is too expensive for many patients. Insurance coverage is inconsistent and often denied. Compounded alternatives provided access at $200-$500/month to patients who couldn't afford $1,000+ for brand-name products. Shutting down compounding without addressing the affordability problem hurts patients.

The personalization argument. Some compounding pharmacies argue their products aren't copies --- they're genuinely customized formulations adjusted for individual patient needs. Dose adjustments, different concentrations, combination products, and formulations for patients with allergies to specific excipients all represent legitimate compounding uses that don't compete directly with FDA-approved products.

Patient Impact: Caught in the Middle

The people most affected by this controversy are patients.

Patients who lost access. When compounding restrictions took effect in mid-2025, patients on compounded semaglutide faced a choice: switch to brand-name products (at significantly higher cost), find a new treatment, or stop treatment altogether. For patients without insurance coverage for weight loss medications, the options narrowed dramatically.

Patients who were harmed. The 520+ adverse event reports documented by the FDA represent real patients who experienced problems with compounded products. Dosing errors, contaminated products, and fraudulent medications caused genuine harm.

Patients who benefited. For every patient who experienced an adverse event, many more reported positive outcomes with compounded semaglutide. At lower price points and through accessible telehealth platforms, compounded products brought GLP-1 treatment to patients who would otherwise have gone without.

The ongoing uncertainty. As of February 2026, the legal and regulatory environment continues to shift. Patients on any remaining compounded semaglutide products face uncertainty about continued availability. The FDA's position is clear --- compounded semaglutide should not be available --- but enforcement gaps remain, and some products continue to circulate.

Where Things Stand in February 2026

The current state of the compounded semaglutide controversy:

Regulatory. The FDA has drawn a firm line. Compounded semaglutide is not authorized. The agency is restricting APIs, issuing warning letters, and targeting misleading advertising. Commissioner Makary has committed to "decisive steps" against non-FDA-approved compounded products.

Legal. Novo Nordisk has 130+ active lawsuits, 44 permanent injunctions, and a high-profile patent case against Hims & Hers. The Hims case, if Novo prevails, could effectively end the largest remaining source of compounded semaglutide for consumers. The DOJ referral adds potential criminal exposure.

Market. Compounded semaglutide shipments dropped 90% by mid-2025. Some compounders continue to operate, either in jurisdictions with slower enforcement or using arguments (salt forms, personalized compounding) that may or may not survive legal challenge.

Pricing. Brand-name semaglutide prices have fallen significantly --- from $1,300+/month to as low as $149/month through direct-to-consumer channels. This reduces the economic argument for compounded alternatives, though a gap remains for patients without access to the lowest prices.

Patent timeline. The core U.S. semaglutide patent runs until December 2031. Until then, any production of the semaglutide molecule --- compounded or generic --- potentially infringes Novo Nordisk's intellectual property. The compounding-vs-brand comparison is moot if compounding itself is legally prohibited.

International context. Outside the U.S., generic semaglutide is arriving in markets like Canada, India, China, and Brazil where patents are expiring. Chinese manufacturers that previously supplied U.S. compounders are pivoting to serve these legitimate generic markets.

FAQ

Is compounded semaglutide legal in 2026? The FDA's position is that compounded semaglutide should no longer be produced or sold, as the drug shortage that permitted compounding has been resolved. Novo Nordisk's patent further restricts production. Some pharmacies continue to operate in gray areas, but the legal trend is toward prohibition.

Is compounded semaglutide safe? There's no blanket answer. Some compounding pharmacies produced high-quality products; others produced dangerous ones. The FDA documented products with no semaglutide at all, products with 86% impurities, and fraudulent products with fake pharmacy labels. Without FDA oversight of manufacturing quality, patients had no reliable way to distinguish safe products from unsafe ones.

Why did Novo Nordisk wait to sue compounding pharmacies? During the drug shortage (2022-2025), compounding was permitted under federal law, and enforcing patents against pharmacies filling a supply gap would have been legally questionable and publicly unpopular. Once the shortage was resolved, both the legal authority and public relations calculus shifted in Novo Nordisk's favor.

What happens to patients currently using compounded semaglutide? Patients should discuss alternatives with their healthcare provider. Options include FDA-approved GLP-1 drugs (which have become more affordable through manufacturer programs and government pricing), the new oral Wegovy pill, and other weight management approaches. Continuing to use compounded semaglutide carries both legal and safety risks.

Could compounded semaglutide come back if there's another shortage? Yes. If the FDA places semaglutide back on the drug shortage list, the legal framework for compounding would reactivate. However, Novo Nordisk has invested heavily in manufacturing capacity to prevent future shortages, and multiple GLP-1 alternatives now exist, making another shortage less likely.

What's the difference between compounded semaglutide and generic semaglutide? Generic semaglutide (approved in Canada in January 2026, expected in other markets) goes through a regulatory approval process that verifies bioequivalence, purity, and manufacturing quality. Compounded semaglutide doesn't go through this process. Generics are regulated products; compounded versions are not.

The Bottom Line

The compounded semaglutide controversy is a collision of legitimate interests. Novo Nordisk has valid patent rights and real safety data showing that some compounded products were dangerous. The FDA has a mandate to protect public health from unregulated medications. Compounding pharmacies provided affordable access to patients priced out of the brand-name market. Patients need treatment they can afford and trust.

No one won cleanly. The 1.5 million Americans who used compounded semaglutide did so because the brand-name market failed them on price and access. The compounding market that filled that gap produced some quality products and some dangerous ones, with no reliable way for patients to tell the difference.

The path forward requires what hasn't existed simultaneously: GLP-1 drugs that are both safe and affordable. Brand-name prices are falling --- from $1,300+ to the $150-$350 range through various programs. Generic competition is arriving in international markets. If those trends continue, the conditions that created the compounded semaglutide market --- desperate demand meeting prohibitive pricing --- may gradually resolve.

Until then, the controversy is a case study in what happens when a drug is simultaneously too effective to ignore and too expensive for millions of people to access through legitimate channels. The system that created that gap --- not the patients who navigated it --- is what needs the most thorough examination.

References

FDA. "FDA's Concerns with Unapproved GLP-1 Drugs Used for Weight Loss." https://www.fda.gov/drugs/postmarket-drug-safety-information-patients-and-providers/fdas-concerns-unapproved-glp-1-drugs-used-weight-loss
CNBC. "Novo Nordisk Sues Hims & Hers Over Compounded Obesity Drugs." https://www.cnbc.com/2026/02/09/novo-nordisk-sues-hims-hers-compounded-obesity-drugs.html
Wilson Sonsini. "FDA Sends Warning Letters to More Than 50 GLP-1 Compounders and Manufacturers." https://www.wsgr.com/en/insights/fda-sends-warning-letters-to-more-than-50-glp-1-compounders-and-manufacturers.html
AJMC. "FDA to Restrict Ingredients Used in Mass-Marketed Compounded GLP-1s." https://www.ajmc.com/view/fda-to-restrict-ingredients-used-in-mass-marketed-compounded-glp-1s-crack-down-on-misleading-ads
Pharmacy Times. "FDA Ends Semaglutide Shortage Listing." https://www.pharmacytimes.com/view/fda-ends-semaglutide-shortage-listing-contributing-to-ongoing-legal-challenges
Novo Nordisk US. "Novo Nordisk Ramps Up Legal Fight Against Compounded Semaglutide." https://www.novonordisk-us.com/media/news-archive/news-details.html?id=168519
The Hill. "Novo Nordisk Sues Hims & Hers Over 'Knock-Off' Ozempic, Wegovy Sales." https://thehill.com/policy/healthcare/5731285-novo-nordisk-sues-hims-hers/
Partnership for Safe Medicines. "U.S. Compounding Restrictions Have Stemmed a Flood of Compounded Semaglutide." https://www.safemedicines.org/2025/09/sept-1-2025.html
University of Illinois Chicago Drug Information Group. "Safety Concerns Regarding Compounded GLP-1 Receptor Agonists." https://dig.pharmacy.uic.edu/faqs/2025-2/august-2025-faqs/what-are-the-safety-concerns-regarding-compounded-glp-1-receptor-agonists/
American Board of Cosmetic Surgery. "What Patients Need to Know About the GLP-1 FDA Policy Changes." https://www.americanboardcosmeticsurgery.org/news/may-2025-glp-1-fda-policy-changes/
Buchanan Ingersoll & Rooney. "Major Update on GLP-1 Litigation Involving Compounding Pharmacies." https://www.bipc.com/major-update-on-glp-1-litigation-involving-compounding-pharmacies
HMP Global Learning Network. "Compounding Pharmacy Sues Eli Lilly, Novo Nordisk Over Alleged GLP-1 Antitrust Violations." https://www.hmpgloballearningnetwork.com/site/pln/news/compounding-pharmacy-sues-eli-lilly-novo-nordisk-over-alleged-glp-1-antitrust-violations
Fierce Pharma. "US Court Decision Stops Compounders from Making Knockoffs of Novo Nordisk's Semaglutide." https://www.fiercepharma.com/pharma/us-court-decision-prevents-compounders-producing-knockoffs-novo-nordisks-semaglutide
Novo Nordisk NovoCare. "Compounded 'Semaglutide' is Not FDA-Approved." https://www.novomedlink.com/semaglutide/patient-safety/difference-fda-approved-compounded-semaglutide.html
HealthOn. "Compounded Semaglutide: Legal & Safe 2026." https://healthon.com/blogs/journal/compounded-semaglutide-is-it-legal-safe-in-2026

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