Eli Lilly’s juggernaut diabetes and obesity drugs Mounjaro and Zepbound have been erased from the FDA’s shortage list, freeing the company from competing with compounding pharmacies that have been producing copycat versions of the in-demand treatments.
The move ends a 22-month stretch in which tirzepatide products were in shortage. The FDA first listed Mounjaro on its shortage page in December of 2022 and then added Zepbound in April of this year. As a result, compounders were allowed to manufacture cheaper knock-off versions of the injected drugs, which were easy to access, particularly online, and surged in popularity as demand for the treatments has skyrocketed.
But their permission to produce the copycats ends with the removal of tirzepatide from the shortage list. Small compounding pharmacies must stop production immediately, while larger compounders—which operate under section 503B of the Food, Drug and Cosmetic Act—have a 60-day grace period.
By mid-morning on Thursday, the share price of Hims & Hers Health, a telehealth seller of prescription drugs, had fallen by 14%. In August, the company reported a 52% year-over-year increase in revenue for the second quarter.
Compounders will still be allowed to manufacture copycat versions of Novo Nordisk’s semaglutide, which has been on the shortage list since August of 2022. Last month, the Danish company said that it expected its shortage of diabetes blockbuster Ozempic to continue through the end of the year.
The end of the tirzepatide shortage is testament to Lilly’s massive scale-up and investment in manufacturing. On Wednesday, the company announced plans to build a $4.5 billion manufacturing and R&D facility in Lebanon, Indiana, due for completion by the end of 2027.
So far, Lilly has earmarked $13 billion for its LEAP Research and Innovation District in Lebanon, Indiana, which is 30 miles from its headquarters in Indianapolis.
“We know many people rely on our medicines, so we invested significantly to expand manufacturing and bring new options to the market,” Patrik Jonsson, Lilly’s president of cardiometabolic health, said in a statement.
Among the new options the company has brought is its online LillyDirect pharmacy, which sells Zepbound at a 50% discount to the list price of other GLP-1 medicines. Lilly unveiled the initiative in August.
"With Lilly able to adequately supply current and future demand for tirzepatide, we believe it could continue to grow market share in incretin products as manufacturing continues to expand," BMO Capital Markets senior research analyst Evan Seigerman wrote in a note to clients.
In its statement on Wednesday, Lilly explained that, while the shortage is over, some doses of Mounjaro and Zepbound may not be available immediately.
“The supply chain is complex, especially for refrigerated medicines, and there may be many reasons why a particular pharmacy does not have a particular dose of the medicine in stock,” the company said in a statement.
While Lilly toasted its success in ending the shortage, it is a blow to compounders and the patients who rely on their products, according to Alliance for Pharmacy Compounding CEO Scott Brunner.
“I suspect plenty of patients taking compounded tirzepatide are going to be caught flat-footed by this. They are being cut-off cold-turkey, their prescription no longer fillable,” Brunner said in a release. “It’s possible that so many patients presently taking compounded GLP-1s will be eventually switched to the FDA-approved versions—if they can afford them, of course—that it will push tirzepatide injection back into shortage."