In the booming weight loss drug market, counterfeits and compound copycats have infiltrated the U.S. medical supply chain — and drugmakers aren’t happy about it.
Novo Nordisk warned consumers last year about counterfeit semaglutide — the active ingredient in Ozempic and Wegovy — found in the U.S. And the FDA issued an alert about counterfeit Ozempic in December, telling retailers, healthcare practitioners and patients to check for specific lot numbers that may be fake. Eli Lilly has similarly warned consumers about the risks associated with counterfeit versions of tirzepatide, the ingredient for its Mounjaro and Zepbound medications, as well as compounded versions.
How widespread is the problem? It’s nearly impossible to know, according to Geoffrey Potter, partner and chair of the Anti-Counterfeiting Practice and Brand Protection team at law firm Patterson Belknap, who has represented pharmaceutical companies in actions against hundreds of defendants allegedly selling counterfeit or materially different pharmaceuticals and medical devices.
“The amount of counterfeit medications is shockingly large, and there is no real way to measure it because there isn’t someone counting counterfeiting,” Potter said.
Despite attempted crackdowns by authorities, sales of fake medications are still big business. One 2020 study from the Pacific Research Institute’s Center for Medical Economics and Innovation pegged global sales of counterfeits between $200 billion and $431 billion annually. And with the weight loss drug market expected to reach up to $200 billion by 2030, there’s plenty of room for knockoffs to find their way into the hands of patients.
Compounding problems
As the obesity market’s clear leaders, Novo and Lilly are tackling the issue of knockoffs and dealing with both counterfeit medications and compounded versions being sold at alternative healthcare and wellness sites.
Lilly recently published an open letter in response to “certain practices” related to tirzepatide medication use and announced legal actions against med-spas, wellness centers and other retailers selling compounded tirzepatide.
Compounded medications are allowed by the FDA under certain conditions, including when there is a shortage, but these medications aren’t FDA approved or verified for safety or effectiveness. Compounded versions of semaglutide and tirzepatide have been cropping up at much lower costs to patients compared to list prices of the brand name GLP-1s. For example, the direct-to-consumer online wellness company Hims & Hers announced their weight loss program last month, offering compounded semaglutide starting at $199 per month — well below the $900-plus list price for a month’s supply of Ozempic.
According to Lilly, tirzepatide not manufactured by the company is risky. The company has also taken a stand against the use of tirzepatide for cosmetic weight loss, as “Mounjaro and Zepbound are indicated for the treatment of serious diseases.” Plus, Lilly said it discovered some compound sellers were piggy-backing on its clinical success, referring to Lilly’s trial results in their marketing for a different, compounded product.
“The amount of counterfeit medications is shockingly large, and there is no real way to measure it because there isn’t someone counting counterfeiting.”
Geoffrey Potter
Partner, chair, Anti-Counterfeiting Practice and Brand Protection, Patterson Belknap
The most recent wave of lawsuits announced by the company target compound sellers that misleadingly refer to Lilly’s products as if the compounded versions had the same results.
“Lilly’s lawsuits are not anti-counterfeiting actions,” Potter said. “None of the defendants are claiming that their products are actually manufactured by Lilly — rather, the defendants are alleged to be claiming that their compounded products are the same as Lilly’s products.”
By taking on only half a dozen lawsuits, Lilly may be trying to warn other sellers they mean business, according to Potter.
“Lilly has chosen to sue a small representative sample of sellers alleged to have made these false claims,” Potter said. “Lilly is attempting to deter others from making false claims and to encourage other wrongdoers to change their claims before they are sued.”
Lilly began the legal action last year with a series of lawsuits in September and October, and has now settled some of those cases, including one with Totality Medispa that involves a monetary payment as well as other med-spas. Lilly alleged the med-spas engaged in false advertising that misled consumers into believing they were selling Lilly’s tirzepatide products and infringed on Lilly’s trademarks.
Resource allocation
When it comes to counterfeits, drugmakers have the option to take on civil lawsuits or they can let authorities take the wheel. There are advantages to civil anti-counterfeiting actions, according to Potter, such as enabling trademark holders to move quickly to seize counterfeit drugs, freeze bank accounts and quickly dissolve distribution channels. Criminal actions by law enforcement and government agencies can be a longer process, he said.
“Going through the criminal process could take many years, and there's no guarantee you'll end up with a criminal prosecution — there's no way to stop the sales that are going on in the meantime,” Potter said.
With some versions of Wegovy in short supply, Novo Holdings is ramping up production, splashing down $16.5 billion in February to acquire contract manufacturer Catalent. And just this week, Novo announced it was spending another $4.1 billion to build a manufacturing facility in North Carolina to produce its injectables.
But Novo is also taking action against counterfeits — CEO Lars Fruergaard Jǿrgensen said the company was working with authorities earlier this year and testing suspicious supplies.
Like Lilly, Novo is tackling compound sellers and has launched 21 legal actions against med-spas, weight loss clinics and pharmacies. Novo has succeeded in permanently barring defendants in five final judgements “from engaging in deceptive, misleading and unlawful marketing practices” in sales of compounded semaglutide.
For Lilly, the coordinated effort is about communicating risks rather than shooting down fraudulent competition.
“Lilly is trying to teach patients [the] difference between authentic Lilly products and inauthentic products, whether they are potentially deadly counterfeits or more risky compounded medication,” Potter said. “Because Lilly cannot manufacture enough to meet the demand, it would be hard to argue that these wrongful sales are causing Lilly to lose business. Rather, Lilly is bringing these actions to protect patients.”
So far, both companies face an uphill battle to educate patients about counterfeit medications and deal with compound sellers edging into their trademark territory, and with no end to the drugs’ demand in sight, the war is likely to linger on.
