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Edited by: TJVNews.com
In recent years, the demand for weight-loss drugs such as Ozempic has surged, driven by their effectiveness and widespread media attention. However, the increasing popularity of these medications has also led to supply shortages, leaving many patients struggling to access the treatments they need. According to a recently published report in The New York Times, in response, a novel marketplace has emerged, offering patients alternative options through telehealth platforms. These platforms provide online prescriptions for compounded versions of popular weight-loss drugs at a fraction of the cost of brand-name options. Now, with the entry of pharmaceutical giant Eli Lilly into this space, the dynamics of the market could shift significantly.
As the demand for drugs such as Ozempic and Mounjaro has outpaced supply, telehealth companies have stepped in to fill the gap. These companies offer compounded versions of these medications, which are mixed by compounding pharmacies and sold at a lower cost than their brand-name counterparts, as per the information in the NYT report. Patients receive these alternatives in vials, along with syringes to self-administer the doses. The affordability of these compounded drugs has made them an attractive option for patients whose insurance does not cover the more expensive, brand-name versions.
The appeal of compounded medications is further bolstered by the growing number of insurers who have restricted or eliminated coverage for weight-loss drugs. As these medications gain popularity, the associated costs have become unsustainable for many insurance plans, prompting patients to seek out cheaper alternatives. The NYT report pointed out that compounding pharmacies have been able to capitalize on this demand by offering copycat versions of drugs listed by the FDA as being in short supply, including tirzepatide, the active ingredient in both Mounjaro and Lilly’s new weight-loss drug, Zepbound.
On Tuesday, Eli Lilly made a significant move that could disrupt the current telehealth and compounding pharmacy market. The company announced that it would begin selling low doses of its weight-loss drug, Zepbound, in vials at a lower price point than its pre-filled pens, as was revealed in the NYT report. These vials will be available exclusively through LillyDirect, a telehealth platform launched by the company earlier this year. This platform connects patients with healthcare providers who can prescribe obesity drugs and facilitates direct delivery of the medications to patients’ homes.
By offering Zepbound in vials at a reduced cost, Eli Lilly is positioning itself to regain market share that may have been lost to telehealth companies offering compounded alternatives. This move is particularly significant because it undercuts one of the primary advantages of compounded drugs: their affordability. For patients whose insurance does not cover weight-loss medications, the lower-priced vials could provide a more accessible and reliable option than compounded versions, which may vary in quality and consistency.
The NYT also reported that Lindsay Allen, a health economist at Northwestern Medicine, highlighted the potential impact of Lilly’s strategy. The lower-cost vials could make Zepbound more accessible to a broader range of patients, particularly those who have been excluded from coverage by their insurance providers. This could, in turn, reduce the demand for compounded alternatives, as patients opt for the assurance and reliability of a brand-name drug offered at a competitive price.
Dr. Timothy Mackey, a professor at the University of California, San Diego, who has studied the counterfeit weight-loss drug market, sees Lilly’s announcement as a strategic response to the growing influence of telehealth companies in the weight-loss space. “Maybe this is a signal to that space: ‘We will get this market share back from you, even if it means lower pricing,’” Dr. Mackey suggested when speaking to the NYT. By lowering the price of Zepbound and offering it through a proprietary platform, Lilly is sending a clear message to the market: it intends to reclaim the customers who have turned to compounded alternatives.
These vials, priced considerably lower than the pre-filled pens, offer a more accessible option for a broader range of consumers, including those on Medicare. However, this move also raises questions about safety, affordability, and the broader implications for the pharmaceutical industry.
Eli Lilly’s Zepbound pens, which cost over $1,000 per month without insurance, have been prohibitively expensive for many patients. In response, the company has introduced vials that offer a more affordable alternative. The NYT report said that a month’s supply of the 2.5-milligram dose is priced at $399, while the 5-milligram dose costs $549. This significant price reduction makes Zepbound more accessible, particularly for those without insurance coverage, including Medicare recipients.
Patrik Jonsson, executive vice president of Eli Lilly, emphasized the potential benefits for patients who lack insurance coverage for Zepbound. By offering a lower-cost option, Lilly is addressing a critical need in the market, especially for those who might otherwise turn to less regulated, compounded versions of the drug. These compounded drugs, often available at prices ranging from $250 to $450 per month, have become a popular alternative for patients seeking more affordable weight-loss solutions.
While the introduction of lower-priced vials is seen as a positive step toward making weight-loss drugs more accessible, it also raises important safety concerns, particularly for older adults. Dr. Adriane Fugh-Berman, a professor of pharmacology and physiology at Georgetown University Medical Center, expressed concern about the appeal of these drugs to Medicare beneficiaries, as was reported by the NYT. Medicare has historically declined to cover medications solely for weight loss, citing various risks associated with these treatments, especially for older patients.
One of the primary concerns is the potential loss of muscle mass, which can be particularly detrimental to individuals over 65. “Older people do not need to lose muscle,” Dr. Fugh-Berman told the NYT, highlighting the increased risk of fractures and frailty that can result from muscle loss in this population. As Zepbound and similar medications become more widely available to older adults, the medical community will need to carefully monitor the long-term effects and potential risks associated with their use.
Patrik Jonsson, executive vice president of Eli Lilly, has made it clear that once the FDA removes tirzepatide from its shortage list, the need for compounded versions should diminish significantly. “When we are off the shortage list, there should be no space for mass compounders,” Jonsson told the NYT.
Lilly has already initiated legal challenges against compounding pharmacies, signaling its commitment to protecting its market position and ensuring that patients receive medications that meet FDA standards. By eliminating the shortage and providing direct access to its drugs, Lilly seeks to minimize the appeal of compounded alternatives, which, despite their lower cost, lack the regulatory assurances that come with FDA approval.
The NYT also reported that Lilly’s strategy to sell Zepbound vials directly to consumers through its LillyDirect platform represents a significant shift in how pharmaceutical companies interact with patients. Traditionally, patients would obtain their medications through pharmacies, often with insurance coverage playing a crucial role in determining cost. However, LillyDirect bypasses these traditional channels, allowing patients to purchase vials, needles, and syringes directly from the company.
This direct-to-consumer model is part of Lilly’s broader effort to offer what it calls “transparent pricing.” By removing third-party supply chain entities, Lilly can set and control the price of its vials, offering them at a lower cost than the pre-filled pens. However, patients will need to self-pay for these vials, as Lilly will not accept insurance coverage for them, as was noted in the NYT report. This approach is designed to appeal to patients who might otherwise turn to compounded versions due to cost concerns, offering a more affordable and safer alternative directly from the manufacturer.
