Ozempic's Napster Moment

The free-for-all era of compounded GLP-1 weight-loss drugs is running into regulators.

The Trump administration referred Hims & Hers Health $HIMS ( ▼ 1.2% ) to the Justice Department over potential violations tied to mass compounding of knockoff versions of Ozempic and Wegovy.

Novo Nordisk $NVO ( ▼ 2.13% ) is also suing, alleging patent violations. Hims shares have fallen sharply since the move.

There are parallels to the rise of Napster in the aughts. The service exploded in popularity by acting first and asking for forgiveness later. File sharing was ultimately ruled illegal. But it permanently changed how people consume music.

Pharma may be entering a similar transition. Compounded GLP-1s surged during shortages, offering cheaper access to blockbuster drugs. That window has narrowed now that supply constraints have eased and enforcement is tightening.

But the broader shift may not disappear. Patients paying cash for GLP-1s have bypassed insurers, wholesalers, and pharmacy-benefit managers, exposing the opaque pricing web that defines US drug distribution.

Startups like Ro are partnering directly with branded manufacturers, while models like Cost Plus Drugs push transparent pricing.

At the same time, policy pressure is building.

The Federal Trade Commission recently moved against Cigna’s $CI ( ▼ 1.96% ) Express Scripts, and Congress enacted changes that may weaken the traditional rebate-driven PBM model.

Mass compounding may fade. The demand for transparency and direct access likely won’t. If GLP-1s showed anything, it is what happens when the patient also becomes the customer.