category:watercooler

Shortages threaten corporate profits, likely to end soon

We think the GLP1 shortage is going to end in the first half of 2025. Here's why.

GLP1.Guide Staff

08 Feb 2025 — 6 min read

GLP1 Receptor Agonists are tranformative treatments. The balance of positive and negative side-effects achieved by GLP1s like Semaglutide (Ozempic, Wegovy, Rybelsus) and Tirzepatide (Mounjaro, Zepbound) have never been witnessed before in the weight management space.

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Don't know what a GLP1 Receptor Agonist is, or how drugs like Ozempic, Mounjaro, Wegovy, or Zepbound work?

Check out our quick explainer

As most know, these drugs are so effective and highly demanded that they are in shortage. Amongst other things this means that compounders and suppliers may take measures to manufacture the drug themselves – this is how a growing amount of consumers (and many new consumers) purchase the drug.

This would all sound like good news, if it wasn't for the tension between the shortage and corporate profits for Novo Nordisk and Eli Lilly.

Novo Nordisk and Eli Lilly report continued explosive demand for GLP1s

Both Novo Nordisk and Eli Lilly have reported stellar demand in their earnings:

Both companies saw increases in demand, revenue and profit

But how can a company experience more demand but lower-than-expected sales? Competition. In this case, not necessarily competition between Novo Nordisk and Eli Lilly, but rather com the shortages

Both companies are vehemently (and obviously) against the proliferation of compounding companies who have taken up the lucrative responsibility of producing Semaglutide and Tirzepatide for consumers who prefer lower prices for GLP1s.

This is a tension that is only likely to be resolved in one way: the shortage of ending, and likely early in 2025.

Recall: the Tirzepatide shortage has already ended

Remember, the Tirzepatide shortage has already ended. While there was a back and forth with the FDA which lead to the FDA presently taking a no-litigation stance against compounders, it is incredibly unlikely that this armistice continues far into the future.

We've covered the situation here before:

While not much has changed in the recent weeks on the Tirzepatide front, companies like Eli Lilly and Novo Nordisk are maximally incentivized to pursue the complete enforcement of patent laws and out-of-shortage drug production restrictions.

The Ozempic shortage is likely next

Novo Nordisk has likely learned from the struggles and successes of Eli Lilly. In their recent earnings call they noted the likelihood of "good news" coming out of the FDA soon:

They've gone as far as to create a website updating consumers on shortages of Wegovy:

The logic here is simple – these companies have dealt with shortages on their drugs for over 2 years. The largest barrier to their profits now seems to be the cottage industry of compounders that are producing these drugs (and seeing massive profits themselves).

The laws around medical patents are unlikely to change (and may even truly be beneficial to innovation in the long term), and this system is one that the FDA and other government agencies exist in part to protect.

No company wants to face a patent cliff, and they certainly don't want to face premature reductions in profit from other organizations producing the formulations they innovated.

What can consumers do?

First, it's likely a good idea to push back against the idea that dosages can be saved. It's dangerous to store dosages of GLP1 formulations for a long time: