Fifth Circuit Affirms FDA's Decisions to End the GLP-1 Drug Shortages, Upholding Limits on Compounded Semaglutide and Tirzepatide

Much of the online market for weight loss and diabetes care runs on GLP-1 medicines, and for the past two years a large share of that market has run on compounded copies that filled shortage driven gaps. A federal appeals court has now upheld the government decisions that narrowed the legal room for that compounding. On August 27, 2026, the U.S. Court of Appeals for the Fifth Circuit issued two separate decisions affirming judgments in favor of the Food and Drug Administration (FDA), leaving in place the agency's conclusion that the branded GLP-1 drugs are no longer in shortage.

The cases were brought by compounding interests, and the drugs at issue are the same ones that dominate telehealth weight loss programs: semaglutide, the active ingredient in Novo Nordisk's Ozempic and Wegovy, and tirzepatide, the active ingredient in Eli Lilly's Mounjaro and Zepbound. Both rulings are appellate decisions that affirm the lower courts, but both are unpublished, and the losing parties may still seek further review.

What the Fifth Circuit decided

In two per curiam opinions dated August 27, 2026, a panel of Judges Richman, Duncan, and Oldham affirmed summary judgment for the FDA in a pair of related lawsuits. The plaintiffs in both cases were the Outsourcing Facilities Association and North American Custom Laboratories, LLC, a compounder doing business as FarmaKeio. The manufacturers intervened on the government's side: Eli Lilly in the tirzepatide case (No. 25-10600) and Novo Nordisk in the semaglutide case (No. 25-10758). Both appeals came from the U.S. District Court for the Northern District of Texas.

The panel did not consolidate the two appeals and issued separate opinions, but it decided them on the same reasoning. In each case the court held that any failure by the FDA to use formal notice and comment procedures was harmless, and that the FDA's decision to declare the shortage resolved was not arbitrary or capricious. The disposition in both opinions was the same: the court wrote that it would AFFIRM the district court's judgment. Both opinions state that they are not designated for publication under Fifth Circuit Rule 47.5, which means they are not binding precedent.

Why the drug shortage list matters for compounding

The legal stakes turn on how federal drug law treats compounding. Under the Federal Food, Drug, and Cosmetic Act, physicians, pharmacies, and outsourcing facilities are generally prohibited from compounding drugs that are essentially copies of an approved, commercially available drug. That prohibition is temporarily suspended when the drug product appears on the FDA's drug shortage list. The statute requires the FDA to keep an up to date list of drugs it determines to be in shortage, and it defines a shortage as a period when demand or projected demand for the drug in the United States exceeds supply.

The FDA's own guidance describes the same mechanism, stating that a drug is not considered commercially available if it is on the drug shortages list and that the limits on compounding essentially copies do not apply in those circumstances. The practical consequence is straightforward: while Ozempic, Wegovy, Mounjaro, and Zepbound were on the shortage list, compounders that met the statutory conditions could make copies to help meet demand. Once the FDA removed them, that legal exception fell away.

The tirzepatide case: Mounjaro and Zepbound

The FDA added Mounjaro to its shortage list in December 2022 and Zepbound in April 2024. On October 2, 2024, the agency posted that the tirzepatide injection shortage was resolved. After the compounders sued, the FDA sought a voluntary remand to reevaluate, and on December 19, 2024 it confirmed its conclusion that Eli Lilly's supply would meet or exceed projected demand, memorializing that determination in what the court called the Delisting Action.

According to the opinion, Eli Lilly spent roughly 23 billion dollars expanding manufacturing capacity while the drugs were listed, and gained FDA approval to sell single dose vials in addition to prefilled pens. The court noted that Eli Lilly reported a surplus at the end of every month in 2024, including an almost 11.6 million dose surplus in the month before the Delisting Action. The court affirmed the judgment for the FDA and Eli Lilly.

The semaglutide case: Ozempic and Wegovy

The FDA added Wegovy to the shortage list on March 31, 2022 and Ozempic on August 23, 2022. In early 2025 the agency removed both, determining the semaglutide injection shortage resolved, and issued a Declaratory Order dated February 21, 2025. The compounders raised the same two arguments, and the court affirmed for the FDA and Novo Nordisk for the same reasons it gave in the tirzepatide case.

The semaglutide opinion added detail on one recurring dispute: whether apparent supply gaps proved a continuing shortage. The court accepted the FDA's explanation that, after a period of limited availability, wholesalers placed system generated duplicate orders that were far in excess of actual demand for the three lowest doses of Wegovy, and that Novo Nordisk adjusted supply to align with real demand rather than to ration a scarce product. The court also credited the FDA's finding that a projected wave of demand from patients switching off compounded products was small relative to Novo Nordisk's production and inventory.

The two legal questions the court answered

The compounders argued first that the FDA had to remove the drugs through notice and comment rulemaking, publishing a proposed rule in the Federal Register and taking public comment, rather than through an informal adjudication. The court did not resolve whether the FDA proceeded correctly. Instead, assuming without deciding that the agency erred, it held any error was harmless. The compounders, it reasoned, had actual notice of the FDA's reconsideration, submitted numerous comments and data over a period longer than the minimum comment window the law requires, and did not identify any additional information they would have submitted had the FDA published a formal notice.

The compounders argued second that the shortage determinations were arbitrary and capricious. Applying the deferential standard that governs review of agency action, the court held they were not. It concluded the FDA disclosed the time periods and supply and demand measures it analyzed, reasonably credited the manufacturers' detailed business data, and adequately explained why it found screenshots of out of stock listings, patient survey data, and general news coverage less probative. The court repeatedly emphasized that its role was not to substitute its judgment for the agency's.

What this means for telehealth weight loss

Compounded semaglutide and tirzepatide spread largely through telehealth subscriptions during the shortages, and both opinions note that telehealth companies were among the parties that submitted information to the FDA. By affirming that the shortages have ended, the Fifth Circuit leaves in place the main legal basis on which large scale compounding of these specific products had been permitted. The FDA's guidance notes that outsourcing facilities generally cannot accept new orders for a copy once a drug leaves the shortage list, subject to a short transition window that has long since passed for these products.

The decisions do not change what a patient is prescribed today, and they do not address every route by which a compounded medicine can be dispensed. Compounding for an individual patient based on a documented clinical need, for example a change from the approved product, sits in a different legal category than mass production of copies, and the FDA's own materials note that other conditions and requirements still apply. The rulings also do not touch the separate disputes over how compounded GLP-1s are marketed, including the dismissed antitrust suit against Eli Lilly and Novo Nordisk brought by another compounder.

Limits and what is still unsettled

• The opinions are unpublished and non-precedential under Fifth Circuit Rule 47.5, so they do not bind future panels the way a published decision would.
• The compounders may seek rehearing before the panel or the full court, or petition the Supreme Court, so the litigation is not necessarily final.
• The rulings review the FDA's process and reasoning under the Administrative Procedure Act. They do not themselves prescribe what any individual clinician may prescribe or dispense.
• Access problems reported by individual patients were part of the record, and the court accepted the FDA's view that such reports can have many causes and did not outweigh the manufacturers' supply data.

This article is general information about court decisions and federal drug policy, not legal or medical advice. Patients taking or considering a GLP-1 medicine should talk with a licensed clinician about FDA approved options and about any compounded product they currently use, and should not stop or change treatment based on a news report. Providers and pharmacies with questions about compounding status should consult the FDA's published materials and qualified counsel. For how TeleRanked evaluates and ranks telehealth providers, see our methodology.