The Compounding Problems of Semaglutide, the Miracle Weight-Loss Drug

Semaglutide weight loss drugs are quite literally saving people’s lives. There are so many health benefits to losing weight that demand for the drugs is off the charts. Demand is so high that the manufacturer can’t keep up and the drugs are in short supply.

Where there is money to be made, there will be people willing to step in. Enter compounding pharmacies, who are catering to the demand by creating supposed duplicates of the drug.

But not all semaglutide is created equally, and concerns are rising that some pharmacies are creating inferior versions of the drug that are, at best, less effective or, at worst, dangerous.

How does semaglutide work?

Ozempic was approved by the U.S. Food and Drug Administration (FDA) in 2017 for use in adults with type 2 diabetes. After patients reported significant weight loss, Novo Nordisk rebranded the drug as Wegovy and received FDA approval in 2021 for use in chronic weight management in adults.

Semaglutide, the active ingredient for both drugs, mimics the function of a hormone that is naturally produced in the body. This hormone, released into the blood after you eat, helps lower blood sugar by stimulating insulin production, decreasing the amount of glycogen created in the liver, and ultimately making you feel fuller longer.

In short supply

These drugs work really, really well. So well, in fact, physicians prescribe Ozempic, the diabetes drug, “off-label” for weight loss. The manufacturer cannot make them fast enough due to a shortage of semaglutide. Both Ozempic and Wegovy have been on the FDA shortage list since March 2022.

This creates an attractive opportunity for compounding pharmacies. As long as the drugs stay on the official shortage list, they can be copied by compounders without fear of patent infringement.

And copy them they do. But how well?

Base or salt?

Ozempic and Wegovy use the base form of semaglutide. The base form has been approved by the FDA for the treatment of diabetes and obesity. But some compounding pharmacies are using different forms of semaglutide, known as semaglutide “salts,” that are chemically different from the base version.

Semaglutide salts have not been approved by the FDA, leading some authorities to caution patients about the efficacy or safety of the variant.

The FDA has received adverse reports from some patients after using the compounded semaglutide, which prompted them to send a public letter to the National Association of Boards of Pharmacy expressing agency concerns with the use of the salt forms of the compounded products. Some state pharmacy boards have also voiced concern.

The manufacturer of the brand-named drugs is making waves, too, and in some cases, threatening and filing lawsuits against pharmacies compounding the drugs and the health care providers administering them.

Best practices

Although the manufacturer is trying to step up production, the demand for semaglutide products will likely continue to outstrip the supply for the foreseeable future. Undoubtedly, many patients and their providers will turn to compounded variants to meet demand.

A physician’s responsibility goes beyond just prescribing the drug. They should understand how the drug is compounded and investigate the efficacy and safety of the salt forms of the product. Then decide if the salt form is appropriate for their patients.

If it is, providers should inform their patients. The Texas Medical Board considers the administration of non-FDA-approved drugs to be a form of alternative medicine. Medical board rules require that patients be informed that the drug is not FDA-approved and be told of the risks associated with the drug.

Pharmacies, too, play a key role as the backbone of our medication dispensing infrastructure. They should stay abreast of the regulations governing the compounding of semaglutide and the ethical considerations of preparing a medication for an individual patient.

They should follow the United States Pharmacopeia (USP) standards. Maintain a clean and safe environment, train personnel, appropriately label the medications, accurately identify the active ingredients, and provide accurate use instructions.

Patients have a responsibility, too. Talk to your doctor and discuss the risks and benefits of the compounded drug. If you and your doctor decide the drug is right for you, keep the lines of communication open with your physician and disclose any adverse reactions as soon as possible.

The future

The demand for these weight loss drugs will remain high for the foreseeable future. Until supply catches up with demand, growing pains will be felt in all corners of our healthcare delivery system.

From the companies that manufacture and compound the drugs to the physicians who prescribe them, the patients who take them, to the insurers who will be asked to pay for them – everyone has a responsible role to play.

Health Law Highlights

California Enacts First-in-Nation Pharmacy Medication Error Reporting Law

From Husch Blackwell, by Kevin Khachatryan:

On October 8, 2023, the California Governor signed Assembly Bill 1286 (AB 1286), a comprehensive pharmacy bill aimed at enhancing patient safety. The bill’s key mandate is a new requirement for community pharmacies to report outpatient medication errors to the California Board of Pharmacy. The legislation also includes several other provisions that regulate the practice of pharmacy in California.

The bill was enacted in response to a 2021 survey by the California Board of Pharmacy, which revealed significant staffing issues contributing to medication errors. The survey found that 91% of retail pharmacists reported inadequate staffing for safe patient care, 83% lacked sufficient time for safe patient consultation, and 78% had insufficient time to conduct proper health screenings before administering immunizations. This led to the establishment of a Medication Error Reduction and Task Force Ad Hoc Committee and the sponsorship of AB 1286.

AB 1286 also introduces several other changes, including amendments which govern staffing decisions in pharmacies and the responsibilities of the Pharmacist-in-Charge (PIC). The law now requires chain community pharmacies to be staffed at all times with at least one clerk or pharmacy technician dedicated to pharmacy-related services, subject to certain conditions. The bill also expands the list of actions that constitute unprofessional conduct and authorizes specially trained pharmacy technicians to prepare and administer certain vaccines and medications.

Health Law Highlights

The Knowledge Requirement in a Case Alleging False Claims Act Violations

From PharmacyToday, by David B. Brushwood, BSPharm, JD:

This matter involved a pharmacy corporation accused of violating the FCA due to falsification of prior authorization (PA) forms by a Clinical Pharmacy Manager (CPM). The CPM allegedly completed these forms with false information, leading to coverage of Medicaid patients who did not meet criteria for payment. This resulted in a substantial increase in the pharmacy’s revenue from just over $1.5 million to over $5 million in 15 months.

The pharmacy corporation moved to dismiss its case, arguing that it was unaware of the CPM’s illegal actions.

The court denied the motion, noting that the FCA holds liable any person who knowingly presents or causes to be presented a false or fraudulent claim for payment. “Knowingly” is defined as having “actual knowledge”, “deliberate ignorance”, or “reckless disregard of the truth or falsity.”

The court reasoned that the corporation was aware of the significant increase in revenue, which was discussed between the CPM and her supervisor. Furthermore, the corporation’s bonus program, which incentivized higher sales, could have potentially encouraged the increase in revenue by any means necessary.

The takeaway is that pharmacy supervisors should be vigilant about any unexpected increase in pharmacy revenues and should confirm a legitimate explanation to prevent liability for knowingly allowing fraudulent activity. Any unlawful request must be reported to a supervisor, and rules must be adhered to for the benefit of the patients.

Health Law Highlights

Cyberattack Shuts Down Pharmacies Across the US

From Brew Healthcare, by Quinn Sental:

Change Healthcare, a prominent health tech firm owned by UnitedHealth Group, suffered a cyberattack, disrupting patient payments and prescription processing across the US. The company, part of Optum, handles 15 billion healthcare transactions annually.

The cyberattack was first noticed as disruptions in the company’s applications, later identified as “enterprise-wide connectivity issues”, and eventually confirmed as a cybersecurity issue. In response, Change Healthcare disconnected its systems to prevent further spread.

The incident has affected pharmacies nationwide, preventing them from processing prescription orders. Some pharmacies could accept prescriptions but were unable to process them through patients’ insurance.

Change Healthcare said the disruption is expected to last at least a day and is specific to their systems, with all other UnitedHealth Group systems remaining operational.

Health Law Highlights

Ten Physicians and Local Execs Indicted in Pharmacy Kickback Scheme

From D Magazine, by Will Maddox:

A pharmaceutical kickback scheme in the Northern District of Texas has led to the indictment of 14 people, including several podiatrists, local businessmen, and executives at Next Health, a healthcare holding company. The scheme involved physicians receiving bribes and kickbacks from pharmacies for referring prescriptions to be filled at those pharmacies, with payments being proportional to the number of prescriptions received.

The scheme, which began in 2014, was concealed through complex business arrangements and involved multiple entities. Payments were funneled through management service organizations (MSOs) and a company called Med Left, which was used to conceal and funnel bribes from the pharmacies to the physicians.

The kickbacks were often disguised as legitimate returns on investments in the pharmacies. Physicians would purchase a percentage of the pharmacy for a nominal fee and were required to refer prescriptions to the pharmacy for ownership. The profits from these prescriptions were then shared with the prescribing doctors.

The owners of Next Health, Andrew Hillman and Semyon Narosov, previously pleaded guilty to charges connected with the scheme in 2018 and were sentenced to several years in prison. Ten physicians, including podiatrists, orthopedic surgeons, and a gastroenterologist, have been indicted for referring prescriptions to Next Health’s pharmacies and receiving kickbacks.

Health Law Highlights

Ozempic, Wegovy, and the New Compliance Risks for Providers

From Dentons, by Susan Freed:

Increase in Prescription of Diabetes and Obesity Drugs: There has been a significant rise in the popularity of diabetes and obesity drugs like Ozempic and Wegovy, with U.S healthcare providers writing over 9 million prescriptions in the last three months of 2022. This is a 300% increase from 2020, with almost half of the users potentially taking these medications for weight loss.

Supply and Cost Challenges: The demand for these medications has outpaced supply, making them increasingly difficult to access, especially for new patients. The high costs, ranging from $900 to $1300 per month, also limit patient access, making health insurance coverage crucial.

Compliance Risks for Providers: The popularity of these drugs, coupled with access issues, presents new compliance risks for providers. There’s a need for increased education, monitoring, and vigilance, especially in documenting medical necessity and other criteria required by insurers.

Risk Mitigation Strategies: Compliance officers should consider providing increased education to practitioners about these medications and insurance coverage requirements, implementing processes to track insurer coverage criteria, reviewing and responding to insurer requests for documentation, and monitoring prescribing habits of practitioners. If outliers are identified, a more in-depth review should be coordinated.

Drug Diversion and Theft Risks: As access to these medications becomes more difficult, the risk of drug diversion and theft increases. Healthcare providers should ensure proper safeguarding measures are in place, especially for drug samples and drug sample closets.