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Semaglutide Gold Rush Is On, Compounding Pharmacies

June 5, 2023

There is no doubt that the new obesity drugs (Wegovy, Ozempic) are hot and in high demand, but there is a disturbing new trend developing. Since the brand name drugs often cost $1,000 to $1,300 per month and are not covered by insurance, people are looking for cheaper alternatives.

That’s where compounding pharmacies come into the picture. New “business opportunities” are being pitched to investors and entrepreneurs whereby a pharmacy will create custom blended meds using the semaglutide ingredient and sell it at a highly discounted rate ($99 per month), via a “partnership. The FDA HAS approved the brand name drugs (Ozempic and Wegovy, by Novo Nordisk) for weight loss, but it has NOT approved these compounded meds.

One such company that is selling “partnerships” (licenses or business opportunities, not franchises) is Doctor’s Medical Weight Loss Clinic, based in Tallahassee, FL. They are selling licenses to their program for $99,700, plus $20,000 in initial operating capital. This company apparently has set up a clinic model where they have access to compounding pharmacies as well as physicians who will approve the prescriptions, and placement agencies that identify available MDs, and marketing/ad agencies that will generate leads.

Research by us reveals that the MDs used will “screen” potential patients via Zoom, taking 5 minutes to evaluate them (no blood work required). If approved, the patient visits a retail “office” once per month to pick up the meds and get weighed. Meds are pills or injections taken once a week. The initial exam costs $299, and then patients typically pay $399/month for the meds on an ongoing basis (but partners can charge more if they desire). The partner/owner pays the MD $50 per screening. There are no coaches or counselors used, and there are no custom meal plans provided. This is basically a DIY plan based solely on the meds.

Doctor’s Medical Weight Loss Clinic claims to have signed up 85 licensees so far. The program is hyped with income possibility claims of $1+ million per year, or $90,000 net profit per month, based on 300 active patients. It says that they can get clinics up and running fast, and that it takes about 6-8 months for the clinic to get to 300 active patients. They recommend spending $2,500 to $5,000 per month on marketing/advertising. That means you will spend $17,500 to $35,000, plus monthly: office rent, staff salaries, the $50 MD screening fees, and initial office build out/furniture, etc. –  all in addition to the $99,700 to sign up.

We have major reservations about operating this type of program, as follows:

  • This venture is being touted as FDA approved. Brand name Ozempic and Wegovy are approved, but compounded versions of it are not.
  • If side effects start emerging with these meds or of Ozempic and Wegovy are taken off the market in the future, what happens to this business? Does it fold, or can the company shift to use other meds?
  • There are no protected territories.
  • There is nothing similar to a Franchise Disclosure Document (FDD) that provides actual earnings, a list of active owners/operators.
  • Can a physician really properly screen potential patients in just 5 minutes, without any blood work?
  • There are NO coaches or counselors used – no one to provide ongoing motivation, support, progress checks, meal plans, tips, advice regarding the psychological aspects of weight loss. The clinic would be staffed by an office manager or the partner/owner, a person who most likely has no medical or weight loss experience.
  • There is no contract guarantee that the price of the compounded meds will remain at $99 per month.
  • What happens when people stop taking the meds? They will gain the weight back.

The FDA says it has received reports some compounders may be using salt forms of semaglutide, including semaglutide sodium and semaglutide acetate, which are different from the active ingredient used in Ozempic and Wegovy. Products containing these salts have not been shown to be safe and effective, the agency warns. Semaglutide sodium is a cheaper and modified version of the compound intended for research use only. Compounding pharmacists could also be buying high doses of semaglutide from wholesalers and then separating it into smaller dosages or mixing it with other drug ingredients.

The FDA does not verify the safety, effectiveness or quality of compounded drugs, the agency reminds consumers in its May 31 warning. It does not offer details about what types of “adverse events” patients who used compounded semaglutide have experienced. Poor compounding practices can result in quality problems, such as contamination or a drug that contains too much active ingredient, which can lead to serious injury and death, the FDA cautions in a general note about compounding.

In our opinion, this venture is very risky for the owner, and has many characteristics of the pain management “pill mills” that were rampant during the opioid crisis — oversight primarily by entrepreneurs and investors (business people)  rather than by weight loss experts, lots of hype, and a program lacking many of the key components of safe and successful weight loss, with an emphasis on ongoing prescriptions. We have now entered the “wild west”, gold rush mentality of jumping on the Semaglutide bandwagon. Investors beware!

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