What the shortage exception did
Section 503A of the Federal Food, Drug, and Cosmetic Act generally prohibits compounding a drug that is essentially a copy of a commercially available drug. But there's a longstanding exception for products on the FDA's Drug Shortages list — pharmacies can compound a drug that's in shortage to maintain patient access.
From 2022 through 2024, the brand-name GLP-1 manufacturers (Novo Nordisk for semaglutide, Eli Lilly for tirzepatide) reported manufacturing constraints that the FDA recognized as shortage status. Compounded semaglutide and tirzepatide became a legitimate parallel supply during this window — the entire compounded-telehealth industry built itself on this exception.
What delisting did
FDA removed tirzepatide from the Shortages list on October 2, 2024, and semaglutide on February 21, 2025. Both delistings closed the broad shortage exception. Compounding under section 503A continues to be permissible, but on much narrower grounds — typically a documented medical necessity at the prescriber level (e.g., a documented allergy to an excipient in the brand-name product) that the brand-name version cannot accommodate.
What did not change: the legality of 503B FDA-registered outsourcing facility preparation under cGMP-equivalent standards. The 503B pathway is governed by different statutory language and is not gated by Shortages-list status.
Downstream effects
Three things changed at the patient level. First, the marketing of compounded GLP-1s as 'available because of the shortage' is no longer accurate, and FDA warning letters in early 2026 specifically targeted providers still making that claim.
Second, a portion of the compounded-telehealth industry has either pivoted (Hims's Novo Nordisk partnership being the largest example) or consolidated around tighter clinical-documentation practices. The programs that remain in steady operation are generally those that have clean 503A or 503B pathway documentation and that can demonstrate documented-necessity grounds where applicable.
Third, the price spread between compounded and brand-name has narrowed slightly as compounded supply chains internalized higher compliance costs. But the spread has not closed — compounded preparations are still typically a quarter to a half of brand-name list pricing.
Where it goes next
The most consequential pending action is the FDA's April 30, 2026 proposal to exclude semaglutide, tirzepatide, and liraglutide from the 503B Bulks List. If finalized, this would constrain — though not eliminate — the 503B side of the compounded market. The 503A patient-specific pathway is explicitly unaffected.
What we think the practical end state looks like by late 2026: a smaller, more compliance-heavy compounded segment for documented-necessity and cash-pay scenarios; a larger brand-name segment for the insured population, with manufacturer cash-pay programs (LillyDirect) anchoring the middle of the price spectrum; and a clearer regulatory line between the two.