Conflicting interests
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The new class of GLP-1 drugs exemplifies both the potential of pharmaceutical innovation and the dangers of future developments from ill-conceived government policies. The unbelievable The benefits of GLP-1 are clear – they significantly improve our health and well-being. The risks arise because the current federal policies allow activities that compromise patient safety and undermine the ability of innovators to cover their large, private capital costs.
Branded as Mounjaro and Ozempic, GLP-1s help patients whose type 2 diabetes has different it was mismanaged. Research shows that diabetes annually imposes $412.9 billion in total economic costs including over $300 billion in direct medical costs. These same drugs, under the brand name Wegovy or Zepbound, have actually helped to reduce it America’s obesity crisis. Obesity is just as costly, with one is appreciated combined economic burden of more than $425 billion annually.
The potential benefits of these drugs are even greater. There is promising evidence that GLP-1 may help patients living with cardiovascular disease, chronic kidney disease, and neurodegenerative diseases such as Alzheimer’s and Parkinson’s. If only some of these links are confirmed, these drugs have the potential to be among the most important pharmaceutical discoveries in generations.
Continuous progress is not inevitable. It will only happen if innovative companies have the opportunity to recoup the cost of capital required to develop these new medicines. These costs are not just the billions spent on R&D. These include high failure risks and extremely long-term ones the time required to bring these medicines to market. This includes the years it takes to prove the safety and effectiveness of these drugs in FDA clinical trials. Estimates drive up costs $2.9 billion per successful drugincluding post launch costs. It takes about 12 years to get FDA approval, and only one in 10 makes it to the consumer.
Historically, the US has fostered an environment conducive to breakthrough pharmaceutical innovation. And Americans have benefited greatly from becoming the medicine chest of the world. US drug R&D is responsible for 55% of total global activity. These efforts helped create more than 4 million good-paying jobs and generates $1.4 trillion in annual economic activity.
Beyond the economic benefits, patients in the US also benefit from access to significantly more innovative medicines than anywhere else in the world. About two-thirds of all new drugs developed in the past decade have come from the US patients have access to 74% of all new medicines, which is 22 percentage points higher than patient access in Germany, the country with the next highest access rates. Britons had access to only 43 per cent and Canadians just 28 per cent. As demonstrated by GLP-1s, greater access to safe and effective drugs means improved patient health outcomes, including longer life expectancy, shorter hospital stays and lower costs.
Recent actions by the federal government undermine the foundations that drive these benefits for US patients. Many of the threats are visible, such as the one proposed by the Administration drug tariffs and most-favoured-nation (MFN) drug pricing policies. (which are just value checks by another name).
Others, such as misuse of compounding pharmacies, pharmacies that provide patients with personalized medications, while they are less obvious, however, they are harmful. Compounding pharmacy misuse undermines innovators’ opportunity (and only one opportunity) to recoup their estimated $2.9 billion in capital costs, jeopardizing continued innovation.
The misuse of compounding pharmacies occurred because patient demand for GLP-1 far exceeded the supply of these drugs starting in 2022. As a result, the FDA declared a drug shortage that lasted until February 2025. During the shortage, compounding pharmacies were able to widely supply GLP-1 drugs.
That principle ceased with the declared end of the shortage this year. Now, with the shortage over, like the Food and Drug Administration notes“compound drugs should be used only in patients whose medical needs cannot be met by an FDA-approved drug.”
From an innovation perspective, this limited exemption makes sense. It creates the necessary flexibility for patients with unique needs, but protects the innovative ecosystem necessary to drive continued medical advances.
The limited exemption is also important to ensure patient safety. As the FDA also notes when discussing compounded drugs,
Unnecessary use of compounded drugs can expose patients to potentially serious health risks. For example, poor compounding practices can lead to serious drug quality problems, such as contamination of a drug containing too much or too little of an active ingredient. This can lead to serious patient injury and death.”
Despite these concerns and the stated end of the shortage, GLP-1s are still commonly obtained from compounding pharmacies. Not surprisingly, security concerns have arisen. Because of these security risks, thirty-eight Attorneys General signed a February 2025 agreement letter to the FDA who expressed their concern
that counterfeit GLP-1 drugs have infiltrated the US supply chain from China, Turkey, India and other foreign sources. These counterfeits may contain impurities, other unknown drugs, or dangerously high amounts of active ingredients. Fraudsters have also repackaged injectable insulin and falsely sold it as Ozempic. Injecting these counterfeit drugs can lead to serious side effects for consumers, sometimes requiring hospitalization.
GLP-1s exemplify the transformative benefits of innovative drugs when the policy environment supports innovation. Allowing compounding pharmacies to bypass intellectual property of innovative companies and the sale of potentially unsafe or less effective versions of these drugs jeopardizes patient safety and discourages continued innovation in the pharmaceutical industry. Consequently, it is important to prevent inappropriate sales of compounded medicines and to promote innovation.
