Last week, the Food and Drug Administration (FDA) said Novo Nordisk A/' (NYSE:NVO) semaglutide products, including Wegovy and Ozempic, are no longer in shortage.

Semaglutide injection products were first added to the FDA's drug shortage list for Wegovy in March 2022 and Ozempic in August 2022.

A lawsuit filed by the compounding groups Outsourcing Facilities Association (OFA) and North American Custom Laboratories, doing business as FarmaKeio Superior Custom Compounding, challenges the FDA's decision to remove semaglutide from the drug shortage list.

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The plaintiffs argue that this action was arbitrary, unlawful, and detrimental to patients who rely on compounded semaglutide for type 2 diabetes, obesity, and cardiovascular disease.

The lawsuit highlights that even the manufacturer of FDA-approved semaglutide acknowledged in its earnings release that supply issues and drug shortages were ongoing.

Despite this, the FDA proceeded with its decision without engaging in a formal notice-and-comment rulemaking process, which plaintiffs argue violates the Administrative Procedure Act (APA).

The APA requires federal agencies to provide public notice, solicit input from stakeholders, and offer reasoned explanations for regulatory actions.

In December, Novo Nordisk submitted a Citizen Petition to the FDA requesting the exclusion of liraglutide from the 503B Bulks List, a registry of substances that outsourcing facilities may use in drug compounding.

The petition argues that FDA-approved liraglutide-based products, Victoza, Saxenda, and Xultophy, meet patient needs without requiring additional compounded versions, which Novo Nordisk contends pose significant safety and efficacy risks.

Last year, the FDA determined that the Eli Lilly And Co's (NYSE:LLY) tirzepatide injection shortage had been resolved.

The compounding groups filed a complaint alleging that removing the drug from the shortage list is based solely on the manufacturer's production capabilities.

In January, Eli Lilly filed a motion to intervene as a defendant in a case against the FDA brought by the Outsourcing Facilities Association and FarmaKeio Custom Compounding.

Price Action: LLY stock is up 1.22% at $912.79 at the last check on Wednesday.

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