Time to Crack Down on GLP-1 Black Market

The market for illicit weight-loss drugs is booming in plain sight. And the U.S. Food and Drug Administration is starting to push back. 

This month, the FDA sent more than 50 warning letters to telehealth companies, medical spas, and others offering compounded GLP-1 drugs in regard to “false and misleading claims about the compounded products they market.” 

Compounded weight-loss drugs have flooded the market — and put patient safety at risk. These knock-offs also disrupt the incentives that entice drug companies to spend billions of dollars on research. 

Turning a blind eye to illegally compounded drugs could result in fewer innovative drugs being developed.

GLP-1 agonists like Wegovy are among the most powerful tools yet invented for fighting obesity. 

They could also be a boon to America’s healthcare finances over the long-term. Obesity costs us an estimated $173 billion a year. A medicine that can reduce the prevalence of obesity could prevent a host of expensive medical problems before they arise. 

But for GLP-1s to fulfill their potential, it’s critical that the FDA retain strict control over the quality and safety of these breakthrough therapies. 

In response to a 2022 shortage of the drugs, a number of telehealth brands and less-than-reputable pharmacies began making and selling their own “compounded” copies of GLP-1s to meet demand. 

Unlike traditionally manufactured medicines, such compounded drugs don’t have to go through the standard FDA approval process. This makes them inherently risky — which is why the FDA only permits compounding in special situations, such as drug shortages.

Yet even now that the GLP-1 shortage is over, compounders are continuing to make and sell their own copies of these medicines. The result is that many Americans are unknowingly relying on an unapproved medicine of dubious quality, safety, and origin.

The risks posed by compounded drugs are more than hypothetical. As of April, the FDA had received about 1,000 adverse event reports linked to compounded GLP-1 medicines. Compounded semaglutide — the active ingredient in Wegovy and Ozempic —  has been associated with numerous deaths.

There is also significant evidence that many compounded GLP-1s sold in the United States contain active pharmaceutical ingredients obtained from foreign sources that aren’t registered with the FDA.

In other words, large quantities of GLP-1 ingredients of dubious quality are entering the country without the FDA’s knowledge. They’re finding their way into seemingly safe weight-loss medicines. And patients are none the wiser. 

But there’s more at risk here than patient safety. The economics of drug development hang in the balance. 

It takes $2.6 billion and 10-12 years, on average, to bring a drug from the lab through the regulatory process and to the patient’s bedside. Only about one in 10 drugs succeeds. Why would investors and companies put such huge sums toward drug development if compounding pharmacies and telehealth start-ups can simply ignore innovators’ intellectual property rights and sell their own untested, potentially harmful copies?

The United States has led the world in pharmaceutical innovation for decades in large part thanks to our strong IP system and world-leading regulatory standards for drug quality and efficacy. 

The explosion in knock-off GLP-1s sales has weakened both of these foundational pillars. 

Until federal regulators put an end to this illicit drug trade, both patient safety and the rule of law will remain in needless peril.

Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is The World’s Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It (Encounter 2025). Follow her on X @sallypipes. This article originally appeared in the South Florida Sun Sentinel.