Legal Dispute Regarding Lilly's GLP-1 Shortages Sheds Light on FDA's Weaknesses in a Post-Chevron Era

Legal Dispute Regarding Lilly’s GLP-1 Shortages Sheds Light on FDA’s Weaknesses in a Post-Chevron Era

The increased popularity of GLP-1 medications has resulted in persistent shortages of Eli Lilly’s offerings and Novo Nordisk’s semaglutide-based products, Ozempic and Wegovy, ever since their launch. To address this unmet need, compounding pharmacies have stepped in to create alternative formulations of these drugs, a practice they are allowed to engage in for any drug listed on the FDA’s shortages list, provided they meet certain federal regulations.

In early October, following an update from the FDA indicating Eli Lilly’s drugs were no longer facing shortages, the opportunity for compounding pharmacies to produce these drugs seemed to diminish. However, this prompted a rapid response from the compounding sector, exemplified by the Outsourcing Facilities Association (OFA) filing a lawsuit against the FDA. The OFA contended that the removal was executed without due notice, despite concerns about localized supply interruptions from the agency.

This necessitated a review by the FDA, which subsequently chose not to enforce any immediate actions against compounding entities, according to a court status report from November 21.

“This represents a first in this context; no one has previously challenged the FDA’s decision to remove a therapy from the shortage list,” remarked David Rosen, a partner at Foley & Lardner, in an interview with BioSpace. “Traditionally, if the FDA provided a reasonable administrative basis and a thoughtful decision-making process, it would have been granted the benefit of the doubt, a scenario that proved hard to challenge. However, due to the recent Chevron decision, the FDA no longer enjoys the same level of deference it once did.”

FDA’s Decision Scrutinized

Prior to the FDA’s recent update, tensions had already arisen between pharmaceutical manufacturers of GLP-1 therapies and compounding pharmacies. Both Novo Nordisk and Eli Lilly initiated legal actions against compounding pharmacies regarding their compounded formulations, claiming these may not adhere to necessary safety, tolerability, and efficacy standards.

Additionally, the FDA has raised concerns that some patients and healthcare providers are turning to unapproved GLP-1 alternatives for weight loss, pointing out that these untested formulations pose risks to patient safety, as they haven’t been subjected to the FDA’s review processes.

Adam Bradbury, an analyst at GlobalData, noted in an email to BioSpace that patients often resort to compounding pharmacies due to an inability to access name-brand versions because of shortages or financial and insurance limitations. Nonetheless, the FDA has identified instances where compounded drugs contained ineffective or harmful dosages or ingredients.

Despite the FDA’s worries regarding compounded medications, the justification for removing tirzepatide from the shortage list hinged on perceived adequate supply levels. Conversations with the drug manufacturer indicated that Eli Lilly not only had sufficient product availability but also the manufacturing capabilities to meet current and anticipated national demands.

However, in its legal challenge, the OFA claimed that the FDA did not provide appropriate notice of its action, neglecting to solicit feedback from interested parties while failing to sufficiently explain its final decision—violating the requirements set forth in the Administrative Procedure Act (APA). The lawsuit further criticized the FDA for relying solely on data from Eli Lilly, a stakeholder with a potential conflict of interest.

A Shift in Chevron Deference

The OFA’s case proved compelling enough for the FDA to allow an additional 60 days for compounding pharmacies to fulfill orders placed before the list amendment. A month later, the regulatory body once again sought more time to assess whether tirzepatide should stay off the shortage list, possibly extending the timeline until December 19, as reported by Bloomberg Law .

This arrangement effectively allows pharmacies to sell compounded products despite the FDA’s assertion of adequate commercial supply, a scenario that Rosen views as exceptionally unusual. “I’m genuinely surprised the FDA has shifted its stance,” he remarked. “I believe the process for lifting drug shortages has not been adequately elucidated in guidance or communication, prompting the FDA to reconsider.”

In a statement, Eva Yin, Jonathan Trinhand, and Daniel Orr from the law firm Wilson Sonsini Goodrich & Rosati indicated that updating the drug shortage list was previously a routine procedure for the agency, relying on its interpretation of existing statutes. However, the overturning of the Chevron deference now compels the FDA to adhere strictly to the APA, which may present challenges regarding its management of the drug shortage list going forward.

To address these complications, the FDA must either formulate new regulations for drug shortage management or seek clearer authority from Congress. Until such changes occur, “the FDA will need to reconsider its decision several times before removing any product from the shortage list in the future.”