FDA Proposal Targets Compounded Weight-Loss Drugs

The FDA proposed excluding Novo Nordisk's and Eli Lilly's weight-loss drugs from a key compounding list, potentially affecting telehealth companies reliant on large-scale production. This move supports the companies' battle against unauthorized versions of their drugs, which has already spurred significant stock increases for both firms.

The U.S. Food and Drug Administration has proposed excluding weight-loss drugs from Novo Nordisk and Eli Lilly from a key compounding list. The move, if finalized, could limit the large-scale production of these drugs by outsourcing facilities, affecting telehealth companies dependent on such methods.

This proposal is designed to boost efforts by Novo and Lilly against unauthorized versions of their treatments, which have been cutting into the companies' sales. Shares for both companies saw increments—Novo's rose by nearly 6% and Lilly's jumped by nearly 10% in afternoon trading.

The FDA's proposal notes no clinical need for outsourcing facilities to compound the active ingredients of Novo's drugs Wegovy and Ozempic, and Lilly's Zepbound and Mounjaro, from bulk substances. The proposal also covers Novo's older drug liraglutide. The FDA seeks public comments until June 29 before making a final decision.