The trend: Demand for affordable weight loss medications has spurred competition between drugmakers and D2C companies selling compounded GLP-1s, which are much cheaper than their branded counterparts.
Editor’s note: This article is part of our Health Trends to Watch in 2025 report. Read the report in full here.
Why it matters: The emerging D2C weight loss drug market threatens sales for Novo Nordisk and Eli Lilly.
Annual compounded GLP-1 drug sales have reached at least $1 billion, according to banker estimates cited by Bloomberg. The burgeoning parallel market is becoming more problematic for Novo and Lilly, as each has spent billions developing, manufacturing, and promoting GLP-1 products.
Both firms have taken legal action against companies that sell alternative forms of their drugs and asked the FDA to ban GLP-1 compounding. Their arguments center on the improving availability of their branded GLP-1s and the safety risk posed by copycat versions.
What’s next? The FDA’s forthcoming decision on compounded GLP-1s will have major implications for D2C companies in the weight loss drug market, Big Pharma, and patients.
A compounding ban would hurt some D2C healthcare players and raise prices for patients. Telehealth companies such as Hims & Hers, Ro, and Noom increasingly rely on compounded GLP-1s to drive sales. Some could sell branded GLP-1s when shortages end, but their competitive advantage from offering lower-priced compounded drugs would be gone.
Allowing compounded GLP-1s to remain on the market would force drugmakers to embrace new sales strategies. Consumers acquire up to 30% of GLP-1s from compounders, per industry estimates cited by KFF. If the FDA permits their continued sale, Novo and Lilly will need to make their versions more accessible.
For example, Lilly already dropped the price of Zepbound on its D2C online platform and is partnering with Ro to sell single-dose vials directly to consumers. This shows that even as Eli Lilly battles compounded GLP-1 sellers, it's willing to partner with some of them to improve product distribution.
Read next: Click here to read our predictions on how the GLP-1 battle between drugmakers and D2C sellers will shake out in 2025.
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