Hello to over 1300(!) readers who have chosen to dive down the pharma rabbit hole with me! I want to give a huge thank you to all of you who shared last week’s newsletter about the ketamine boom. I got a ton of great messages from everyone who was as fascinated as I am about what’s happening in that realm. As a reminder, you can reply to any of these emails and your note will come directly to me. I read every response - and while it may take me a few days to reply, I promise I eventually write back to everyone!

I have a feeling today’s letter is going to ruffle some feathers. I’m making a major effort to present both sides of the story in everything I write about, but this is one topic where I can’t help but show my cards. I expect that many of you will not agree with all that I say below. That’s ok! This is my newsletter, and this is just my opinion. I welcome any and all dissent. With that being said…

We’ve all seen the ads.

“Get personalized semaglutide shipped to your door.”
“Lose weight with compounded GLP-1s, tailored just for you.”

On Instagram. In the subways. Even on TV during the Super Bowl.

And if you don’t know any better, I wouldn’t blame you for thinking that sounds like an awfully good deal. But you read Drugstore Cowboy, so you do know better. 

To steal a line from my favorite movie character of all time, Lt. Aldo Raine…

Drugstore Cowboy readers know that’s especially true in the world of pharmacy. Buckle up and let me explain how this is all just a legal workaround - and a dangerous one at that...

Pharmaceutical compounding, in its intended form, is a good thing. Most medications you get at a pharmacy are manufactured at mass by a drug company in a facility, purchased by the pharmacy, and then sold to patients. Compounding is when you need a medication that isn’t commercially manufactured, so the pharmacist makes it bespoke - from scratch - just for you.

It’s how pharmacists help when your toddler can’t swallow pills, or when a patient is allergic to a dye or filler. It’s how we create niche formulations that the big manufacturers don’t bother with because the market isn’t big enough for them to invest in. Think of a compounding pharmacy like a restaurant that makes gluten-free pasta. For most people, it doesn’t make a difference. But for a select few, it can change their life.

However, there’s an important distinction: compounding is not meant to compete with FDA-approved drugs when those drugs are readily available. It’s not a hall pass to repackage a blockbuster drug and sell it under a new label. At least, it’s not supposed to be.

In 2023, the FDA declared that semaglutide (Ozempic, Wegovy) and tirzepatide (Mounjaro, Zepbound) were in shortage due to the incredible demand outpacing supply.

That declaration triggered a legal loophole: under federal law, pharmacies are allowed to compound drugs that appear on the FDA’s official shortage list - but only while they are temporarily on that list. It’s a safeguard meant to help patients when supply chains break down.

Instead, it’s become a business model.

Direct-to-consumer startups saw their moment. Suddenly, your Instagram feed was full of slickly branded sites offering “compounded GLP-1s” via telehealth. No in-person appointments. No long-term oversight. Just a form, a payment, and a package in the mail.

Most of these DTC companies separate themselves from legal backlash because they aren’t compounding anything themselves. They aren’t pharmacies, and they actually aren’t prescribers either. They’re essentially acting as marketplaces connecting you to a prescriber for the prescription, and then contracting with third-party facilities who compound medication and send it to you. They take a cut for connecting the dots - and keep their hands clean if anything goes wrong. On top of that, many of these compounding facilities operate in regulatory gray zones, and they’re relying on a legal technicality to claim they’re helping with access - when in reality, they’re just chasing margin. Now that the government has officially declared the shortage of both drugs resolved, we’re finding out how far these compounders are willing to push the boundaries of the law.

It mostly isn’t. Or at least not in the way people assume.

According to the American Pharmacists Association, there are ~7500 compounding facilities in the United States. The FDA does not have the resources to inspect even a fraction of them on a regular basis. In fact, many are never inspected at all. They basically start operating under the honor system until they cause a problem. There are two different types of compounding pharmacies, 503A and 503B…

Only 503B “outsourcing facilities” are subject to routine FDA oversight. But even those inspections are inconsistent and reactive - usually triggered after something goes wrong. It’s no different than how the IRS doesn’t have enough manpower to audit everyone in America, so they selectively choose to look at people that have a higher likelihood of cheating the system.

The result: a system where almost anyone with a pharmacy license, a website, and a shipping partner can start mailing out injectables. And when the money’s this good, plenty of them do.

To be clear, not every compounding pharmacy is dangerous. Many are reputable, well-run, and serve a crucial purpose in our healthcare system.

HIMS, for example, recently acquired a respected 503B facility. That’s a smart move - if you’re going to sell compounded meds, you should control the supply chain and take responsibility for quality.

But what the semaglutide surge revealed is just how easy it is to capitalize on a temporary loophole. One shortage notice, and suddenly a cottage industry of DTC weight-loss providers springs up overnight looking to capitalize on a short window of opportunity.

And when the goal is to make as much money as possible in the shortest possible time, corners get cut. Quality gets rushed. Sterility gets compromised. And people get hurt.

Let’s talk about the marketing…

Compounded GLP-1s are often advertised as “customized” or “personalized.” This is really just semantics masking another loophole in the system. If a compounding pharmacy is making a medication, or a strength, or a dosage form that is not commercially manufactured, then it’s technically legal. So what do they do? They add Vitamin B12 or other harmless vitamins to patented drugs and claim this creates a totally different, life changing medication that patients can’t live without. They also promote unique doses not available from the manufacturer. And they’ll even take something like Ozempic and make it in an oral formulation instead of an injection (without any proof that the safety and efficacy are the same).

I know I’ll catch some flak for saying this, but let’s call that what it is: shameless bullshit.

There is no clinical evidence that semaglutide plus B12 is more effective or necessary. There’s no evidence that a “low-dose” compounded injection works better. And there’s a reason that Novo Nordisk and Eli Lilly only make injectable GLP-1s and not oral tablets - the body metabolizes drugs differently when they are administered in different ways. These are not innovations - they’re excuses to circumvent the law.

They exist to justify compounding in the absence of true medical necessity. It’s the supplement industry playbook: If you can’t prove it works, just make it sound like a breakthrough.

Here’s my attempt to put it in simpler terms…

This isn’t the first time we’ve watched safety get sacrificed for speed.

In 2012, the New England Compounding Center (NECC) caused one of the deadliest public health disasters in modern memory. A batch of contaminated injectable steroids led to a fungal meningitis outbreak that killed over 60 people and sickened ~800 more.

NECC was rushing production. Skipping sterility checks. Cutting corners in pursuit of profit.

Sound familiar?

I don’t mean to cause panic. We’re not there yet with GLP-1s. But we’re flirting with the same dynamics - a gold rush, a weak regulatory structure, and a flood of injectable drugs being churned out with minimal oversight.

In my own pharmacy practice, I often use a term I made up myself.

I call it: “The Mom Test”.

Would I let my mother take this medication? In the case of compounded GLP-1s from the companies below who targeted me on Instagram yesterday, my answer is a hard no.

Safety concerns aside, there’s a bigger reason I can’t support what is happening.

I don’t say this often, but I think the drug companies are right. 

**For this next part, try to ignore the (extremely valid) issues we all have with how obscenely these drugs are priced. That’s a separate issue I will discuss in a future newsletter.**

Novo Nordisk and Eli Lilly are suing every compounding pharmacy they can find for patent infringement - and I get it. They spent decades (and billions of dollars) developing these molecules. They ran the trials, earned FDA approval, and secured patents that give them the right to earn back what they spent in development (and more). And now, copycats are using a legal technicality to sell unapproved, potentially dangerous versions of their drugs that eat away at sales and erode the credibility of their brands.

If we allow this precedent to hold - that patents don’t matter when a drug is popular and hard to get - then why would any drug company invest in the next breakthrough?

No patents means no exclusivity.
No exclusivity means no ROI.
No ROI means no R&D.

Semaglutide didn’t fall from the sky. It was the result of real, sustained scientific progress. Undermining that process might feel satisfying in the short term, but it’s how progress dies in the long term. The system is flawed, but the uncomfortable truth is that U.S. drug profits fund global innovation. Undermining that engine has real consequences. The impending legal wars between the drug companies and the compounding pharmacies will have undeniable consequences on the future of medicine.

There’s a difference between expanding access and exploiting a loophole.

Right now, we’re watching the latter become the standard operating procedure. And if we don’t course-correct soon, we’re going to see a lot more shady compounding, a lot more medical marketing theater, and eventually a lot more harm.

The compounded semaglutide boom isn’t just a story about weight loss.
It’s a story about what happens when our rules can’t keep up with our appetites.
And if history’s any guide, it doesn’t end well.

So ask yourself: when the next wonder drug hits the market - will it go through the FDA or your Instagram feed?

Ride on.

Alec Wade Ginsberg, PharmD, RPh
4th-Gen Pharmacist | Owner & COO, C.O. Bigelow
Founder, Drugstore Cowboy