According to the Wisdom Financial APP, the US Food and Drug Administration (FDA) has agreed to reconsider the decision made last month to prohibit private drug preparers from selling their own compounded versions of the weight loss and diabetes treatment drugs by Eli Lilly and Co (LLY.US).

The institutions stated in a court document that they will now consider allowing compounding pharmacies and drug facilities to continue providing the corresponding drugs, while indicating a reevaluation of the shortage of their active ingredients. For the obese and diabetic population, the compounded versions of Eli Lilly's drugs, which combine weight loss and glucose lowering functions, are cheaper than Eli Lilly's official brand versions.

This latest decision is in response to a lawsuit filed on Monday by the Outsourcing Facilities Association, representing the compounded preparation industry. Following the FDA's decision to reconsider on Friday, Judge Mark Pittman of the Fort Worth, Texas area in the USA suspended the lawsuit.

The previous decision by the US Food and Drug Administration (FDA) on September 30 jeopardized the ability of compounding pharmacies to sell Lilly's Zepbound, known as the 'miracle weight loss drug,' and Mounjaro, a drug with weight loss and diabetes treatment functions. The FDA's earlier decision meant that the active ingredient of these highly demanded weight loss drugs by Eli Lilly, tirzepatide, was removed from the 'shortage drug list.'

These FDA decisions are seen as a response to the lawsuit filed by the Outsourcing Facilities Association on Monday. Following the FDA's decision to reconsider on Friday, Judge Mark Pittman of the Fort Worth, Texas area in the USA temporarily suspended the lawsuit.

The FDA's previous decision is set to cut off the access of many obese patients to the compounded formulations they relied on during the shortage period of Eli Lilly's official weight loss drugs. The compounded formulations prepared by these pharmacies are much cheaper than the official price of Eli Lilly's brand weight loss drugs. Some insurance companies typically provide insurance for diabetes treatment drugs, such as Eli Lilly's tirzepatide, but many insurance companies do not provide coverage for weight loss drugs.

The president of the Outsourcing Facilities Association, Lee Ross Bush, stated in a recent declaration that the association is very pleased for our members and the many patients they serve, as the FDA has agreed to reconsider its previous decision.

The weight loss drugs from Eli Lilly and Co are in short supply, competing with Danish competitors such as Novo-Nordisk A/S's Ozempic, stimulating the market's demand for compounded formulations. Since the end of 2022, one of Lilly's weight loss drugs, Mounjaro, has been on the FDA's shortage drug list, and Zepbound was added to the list in April.

The difference between traditional branded drugs or generic drugs is that pharmacies can sell their own compounded versions of Eli Lilly's weight loss drugs without FDA approval. Pharmacies specializing in compounding drugs may prepare customized drugs for specific patients to fill prescriptions, while so-called 'outsourcing facilities' mass-produce the compounded drugs needed by these pharmacies.

The reason for the FDA's reconsideration is that US federal regulations allow pharmacies to sell compounded versions of FDA-approved drugs to meet demand in times of drug shortages. If a drug is not severely in short supply, its compounded version cannot be regularly or extensively produced.

The Outsourcing Facilities Association emphasizes in its lawsuit that the actual supply situation remains shortage, but the FDA has removed the core component tirzepatide of Eli Lilly's weight loss drugs from the FDA's shortage list.

As early as August, Eli Lilly began sending cease-and-desist orders to remote medical companies, health centers, and medical spas selling the compounded versions of Zepbound and Mounjaro. Lilly's management also emphasized that lawsuits will be brought against sellers of compounded versions of weight loss drugs falsely claiming to be FDA approved.

The active ingredient in the weight loss drugs under Novo-Nordisk, semaglutide, is still on the FDA's shortage drug list.

Whether it is the official brand of Eli Lilly's weight loss drugs or compounded drugs, the key active ingredient, tirzepatide, is the same, so theoretically their biological effects should be similar. The main difference is that the excipients (such as solvents, preservatives, etc.) in Lilly's branded drugs are optimally designed to ensure the stability of the drug during transportation and storage, as well as to extend the drug's shelf life. The excipients and other ingredients used in compounded drugs may differ, which could affect drug absorption, metabolism speed, and potency. Some compounded drugs may have shortcomings in terms of drug stability, especially drugs sensitive to external factors such as temperature and light.

A recent study found that obese patients using Mounjaro, a pharmaceutical product launched by eli lilly and co that combines weight loss and diabetes treatment (with tirzepatide as the core ingredient), had significantly better weight loss results compared to patients using Ozempic, a similar product launched by novo-nordisk a/s that combines weight loss and diabetes treatment (with semaglutide as the core ingredient).

The above research is of great significance for the two pharmaceutical giants, 'Eli Lilly and Co' and 'Novo-nordisk a/s', which are forming a monopoly in the weight loss drug market. It may prompt more obese patients or people trying to lose weight through injections to turn to 'Eli Lilly and Co' instead of 'Novo-nordisk a/s', which may also have a boosting effect on 'Eli Lilly and Co's stock price.

Looking at a longer time frame, after using six months, the average weight loss of Mounjaro users reached as high as 10.1%, while the average weight loss of Ozempic users was only 5.8%. After 12 months, the average weight loss of Mounjaro users was 15.3%, while the average weight loss of Ozempic users was 8.3%. The study also showed that the risk of gastrointestinal adverse events for the two types of weight loss injection drugs was generally similar.