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Blurring the line between GLP-1 compounders, counterfeiters

Weak regulatory oversight has allowed 503A compounding facilities to abuse customization rules, blurring the line between GLP-1 compounders and unregulated drug manufacturers.

Alivia Kaylor, MSc
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Published: 26 Sep 2025

When the FDA declared last winter that the national shortage of semaglutide and tirzepatide was over, compounding pharmacies were expected to wind down the mass production of those GLP-1 drugs. But instead, many have illegally continued to manufacture and distribute large volumes of compounded GLP-1 products by exploiting the 503A customization loophole.

"Some [compounding pharmacies] have been playing fast and loose with the rules," Stan Loomis, RPh, co-founder of Olympia, said in an interview. "When the FDA said the shortage was over, that should've been the final whistle. But, [some] kept the game going by tossing in things like B12 and calling it 'personalized.'"

If compounding pharmacies are allowed to continue skirting federal regulations, the already blurred line between compounders and unregulated drug manufacturers could soon disappear.

Blurring the lines

Under Section 503A of the Food, Drug and Cosmetic Act (FD&C Act), medicine is allowed to be compounded to address a patient-specific need, such as removing an allergen or tailoring a dose not available from commercial products.

Numerous pharmacies across the nation have exploited this rule by applying the same GLP-1 formulation to broad patient groups, adding unnecessary excipients or altering doses under the guise of personalization.

"We're seeing compounders making the same formula for everyone and labeling it as customized because they added glycine or changed the dose by a few micrograms," said Naomi Loomis, RPh, also a co-founder of Olympia and Stan's counterpart. "That's not personalization. It is mass production in disguise, and it puts the entire profession at risk."

To prevent compounding pharmacies from operating like large-scale manufacturers, Section 503A of the FC&C Act includes a cap on interstate distribution. The rule prohibits 503A facilities from shipping more than 5% of their compounded drugs across state lines, but weak enforcement by the FDA has allowed pharmacies to exceed that threshold.

"If the FDA cracked down and enforced the 5% interstate shipping limit, it would shake up the compounding space overnight," Naomi added. "A lot of pharmacies acting like national manufacturers would have to register as drug manufacturers."

According to Naomi, tighter regulatory oversight would "clean up the bad actors, improve safety and restore some order to the supply chain," even if it restricts short-term access.

Compounding vs counterfeiting

As compounders continue to sidestep compliance, it is becoming increasingly difficult to distinguish compounded GLP-1 drugs from counterfeit versions.

Per Section 503A of the FD&C Act, licensed compounders must follow U.S. Pharmacopeia or National Formulary standards and source active pharmaceutical ingredients (APIs) from FDA-registered facilities.

However, the globalization of the pharmaceutical supply chain has formed a convoluted network of suppliers and manufacturers, resulting in a lack of transparency in sourcing.

Many compounded GLP-1 drugs are made with APIs sourced from unregistered and unregulated suppliers. More than 80% of these unregistered shipments enter the country without FDA inspection, and some are labeled "research only."

Compounding pharmacies that use sourced APIs from unregistered suppliers are essentially operating the same as unregulated drug manufacturers. Their products might look legitimate, but they share the same risks as counterfeit GLP-1 versions pushed online.

"Fake versions online or sketchy telehealth [providers] could use non-pharmaceutical grade APIs," Naomi Loomis said. "There's no oversight, no traceability, often no clue what's inside.”

Naomi added that deceptive advertising only makes the transparency issue worse, pointing to red flags that include false FDA approval claims, vague sourcing information and the lack of involvement of a licensed pharmacist.

"Transparency matters," Stan Loomis maintained. "Compounders should disclose their sources, follow USP standards and test for potency and sterility. Anything less is playing with patients' lives."

Recent regulatory action

Stan argues that eliminating personalization schemes would have the biggest impact on curbing illegal GLP-1 compounding.

"If that door closes, it stops the mass production of unauthorized GLP-1s almost overnight," Stan continued.

Although the FDA has not directly targeted personalization practices, it has recently taken more aggressive steps to tamp down illegal GLP-1 compounding.

Earlier this month, the FDA established a "green list" import alert intended to prevent foreign, unverified GLP-1 active ingredients from entering the U.S. Days later, the agency cracked down on false direct-to-consumer advertising by sending warning letters to more than 50 digital health providers.

Yet, some experts question whether these actions go far enough, leaving room for others to step in.

"State boards can step up inspections. We can push for mandatory adverse event reporting. Pharmacies can voluntarily follow higher quality standards and proudly advertise that transparency," Naomi concluded.

Alivia Kaylor is a scientist and the senior site editor of Pharma Life Sciences.

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