FDA’s compounded GLP-1 limits will have ripple effects throughout the retail industry

The situation: It’s about to get more difficult for consumers to access inexpensive GLP-1s.

• The US Food & Drug Administration (FDA) removed tirzepatide—the active ingredient in the weight loss drug Zepbound—from its shortage list last year. That will prevent most compounding pharmacies from making and selling cheaper versions of the drug within the next few months.
• Some doctors may pivot to prescribing compounded semaglutide—the active ingredient in Ozempic and Wegovy. However, that workaround won’t last—the FDA plans to end its shortage designation as well.
• While the FDA recently approved the first generic version of Victoza, or liraglutide—a first-generation GLP-1 that has been on the FDA's shortage list since 2023—demand for the once-daily injection has waned as patients move to more effective once-weekly treatments like Ozempic and Mounjaro.

Why it matters: GLP-1s have been incredibly popular—and they’re reshaping consumer spending habits.

• Roughly 1 in 8 (12%) consumers have taken a GLP-1 drug, per KFF, and that share is likely to rise: 26% of US consumers plan to take a weight loss drug to achieve their 2025 New Year's resolution goals, per Tebra.
• GLP-1s have had a considerable impact on people’s grocery bills. Households with at least one GLP-1 user slashed their grocery spending by approximately 6% within six months of starting the medication as they pulled back on calorie-dense processed foods, according to a recent study by Cornell University and Numerator.
• And it’s not just affecting processed food sales. A year into their regimen, GLP-1 users’ spending surged on items like gum (+14.6%), beans (+9.8%), and rice (+8.7%), per a Circana study, while dropping significantly for refrigerated salad dressing (-19.5%), dried meat snacks (-17.0%), and wine (-12.1%). Spending also rose in categories like oral care, fitness trackers, cosmetics, and apparel.

Our take: Rising drug costs may force consumers to cut back on discretionary spending for non-essential items like apparel, electronics, and home goods, creating headwinds for retailers already grappling with tariff-driven cost increases.

Other consumers may decide to stop taking the GLP-1s and opt for less expensive health and weight management alternatives, which could benefit retailers that sell dietary supplements and health-focused foods. They may turn to yoga and holistic lifestyle solutions as well, creating an opportunity for merchants selling activewear and other related products.

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