The Shot Heard ‘Round the Pharmacy’: FDA Takes Aim at GLP-1 Compounders

Compounding 101: The Regulatory Basics

The market for compounded GLP-1s has grown exponentially over the past several years. Broadly speaking, compounding is the process of combining, mixing, or altering the ingredients of a drug product to create a custom medication. Importantly, compounded drugs are not FDA approved and, to qualify for exemptions from certain federal requirements, including premarket approval, they must meet a narrow set of conditions established under Sections 503A and 503B of the federal Food, Drug, and Cosmetic Act (FDCA). 

As a general matter, Section 503B allows outsourcing facilities to compound large volumes of drugs from bulk drug substances without individual patient prescriptions if (1) the substance appears on the 503B Bulks List, which is comprised of products for which the FDA has determined there is a clinical need, or (2) the compounded drug is on the FDA’s drug shortage list at the time of compounding, distribution, and dispensing. Notably, when assessing “clinical need” for the purposes of inclusion on the 503B Bulks List, the FDA does not consider supply issues such as backorders, convenience in administering a particular compounded drug product, or the cost of the compounded product compared with an FDA-approved drug. 

Section 503A, in turn, allows for patient-specific compounding performed by (1) a licensed pharmacist in a state-licensed pharmacy or federal facility, or (2) a licensed physician — for example, for patients who are allergic to certain inactive ingredients, need a liquid formulation rather than a pill, or need a lower strength than what is commercially available

The Rise and Fall of GLP-1 Compounding

As we detailed here, compounding pharmacies entered the GLP-1 market in 2022 when demand for semaglutide and tirzepatide outstripped supply and both drugs hit the FDA Drug Shortage List, resulting in the emergence of a multibillion-dollar sub-industry. Per the Kaiser Family Foundation, at their peak in 2024, compounded versions reportedly accounted for up to 30% of the total US GLP-1 supply — fueled by telehealth startups and cash-pay obesity clinics. 

The compounding pathway began to narrow when the FDA declared the tirzepatide shortage over in December 2024 and the semaglutide shortage over in February 2025, establishing phased enforcement deadlines for compounders to wind down operations. The Outsourcing Facilities Association (OFA) filed federal lawsuits challenging both determinations, discussed here, which are now pending appeal before the Fifth Circuit Court of Appeals. 

Meanwhile, the FDA has begun taking enforcement action in this space, issuing successive waves of Warning Letters targeting peptide compounding, marketing claims, and related practices. In March, the FDA issued 30 Warning Letters to telehealth companies offering GLP-1 products with misleading claims, followed by another round in April targeting companies marketing unapproved GLP-1, dual GLP-1/GIP, and triple agonist products — many labeled “research use only,” which the FDA does not recognize as a shield for products that are being promoted for human use. 

FDA’s May 1 Proposal

In 2024, the OFA nominated semaglutide, tirzepatide, and liraglutide for inclusion on the 503B Bulks List. In its May 1 notice, the FDA stated that it reviewed the nominations and did not identify sufficient evidence of clinical need to place any of the three substances on the list. Accordingly, the agency has proposed to exclude semaglutide, tirzepatide, and liraglutide from the list entirely.

If finalized, the FDA’s May 1 proposal carries immediate and potentially far-reaching consequences across the GLP-1 supply chain.

• 503B Outsourcing Facilities: The exclusion would prohibit outsourcing facilities from compounding semaglutide, tirzepatide, or liraglutide based on the bulks-list pathway. Instead, such facilities would have to fall back on the drug shortage list to support compounding of these substances.

• 503A Compounding Pharmacies: Narrow exceptions would continue to exist under Section 503A for patient-specific compounding.

• Telehealth Platforms and Cash-Pay Clinics: Companies that built business models around distributing compounded GLP-1s, including telehealth startups, face a serious commercial viability question as the regulatory landscape would offer no viable pathway for large-scale distribution of compounded versions of these drugs.

• Brand-Name Manufacturers: For companies like Novo Nordisk and Eli Lilly, the proposal reinforces the exclusivity that comes with their FDA-approved GLP-1s. 

The public comment period on the proposed exclusion of semaglutide, tirzepatide, and liraglutide from the 503B Bulks List closes on June 29. 

Looking Ahead

Interested parties should also take note of the upcoming July advisory committee meeting, during which the FDA intends to reconsider the 2023 classification of 12 peptides (none of which is a GLP-1) into Category 2, an FDA designation for bulk drug substances that present significant safety concerns and may no longer be used in compounding. At the July meeting, the FDA will consider the inclusion of these 12 peptides on the 503A Bulks List. The public comment period for this meeting closes on July 22, but the FDA states that only comments received on or before July 9 will be provided to the committee (though comments received after this date through July 22 will still be considered by the agency).

Companies operating in the GLP-1 and broader peptide space — whether as compounders, outsourcing facilities, telehealth platforms, ingredient suppliers, or branded manufacturers — should carefully evaluate the implications of the FDA’s May 1 proposal and July advisory committee meeting for their operations and consider whether to participate in the public comment process.