The GLP-1 Shortage Explained: Supply, Demand, What's Next
GLP-1 Access and Cost
587% increase
GLP-1 prescriptions rose 587% from 2019 to 2024, overwhelming manufacturing capacity built for a much smaller diabetes market.
FDA / Contrary Research analysis, 2025
FDA / Contrary Research analysis, 2025
View as imageFor nearly three years, millions of patients prescribed semaglutide or tirzepatide could not fill their prescriptions. Pharmacies displayed "out of stock" notices for months at a time. Diabetes patients who depended on these drugs for blood sugar control found themselves competing with a wave of new weight loss prescriptions for a supply that could not keep up. The cost of GLP-1 drugs was already a barrier. The shortage made access even harder.
The GLP-1 shortage was not a simple manufacturing failure. It was the result of exponential demand growth colliding with the fundamental difficulty of peptide-based drug production. Understanding what health economists say about GLP-1 cost-effectiveness requires understanding what happened to supply first.
Key Takeaways
- GLP-1 prescriptions increased 587% from 2019 to 2024, driven largely by off-label and approved weight loss indications
- The FDA resolved the tirzepatide shortage in October 2024 and the semaglutide shortage in February 2025
- Peptide manufacturing requires sequential addition of up to 40 amino acids per chain, with each step taking hours and entire batches requiring days[1]
- Choe et al. (2025) documented glycemic deterioration in diabetes patients who lost access during the shortage[2]
- The FDA received 605 adverse event reports tied to compounded semaglutide as of July 2025, with potency variations ranging from 68% to 122% of label strength[3]
- Eli Lilly and Novo Nordisk have committed over $50 billion combined to new manufacturing facilities, with full capacity expected by late 2026
How the Shortage Started
The GLP-1 shortage began in early 2022. Novo Nordisk's semaglutide (sold as Ozempic for diabetes and Wegovy for weight loss) and Eli Lilly's tirzepatide (sold as Mounjaro for diabetes and Zepbound for weight loss) entered shortage status on the FDA's drug shortage list as demand outstripped supply.
The trigger was weight loss. GLP-1 receptor agonists had been approved for type 2 diabetes for years, but the approval of higher-dose semaglutide (Wegovy) for chronic weight management in 2021, followed by tirzepatide (Zepbound) in 2023, opened a market orders of magnitude larger than the diabetes population. Ibrahim et al. (2024) tracked how updated ADA guidelines and the medication shortage together reshaped GLP-1 prescribing trends across the United States.[4]
The scale of demand growth was without precedent in the pharmaceutical industry. A 587% increase in prescriptions over five years meant that manufacturing infrastructure designed for a chronic disease population of roughly 37 million Americans with type 2 diabetes was suddenly expected to serve an obesity population of over 100 million.
Why Peptide Manufacturing Cannot Scale Quickly
GLP-1 receptor agonists are peptide drugs, not small molecules. That distinction matters for manufacturing. A drug like metformin has a simple chemical structure that can be synthesized in bulk at commodity scale. Semaglutide is a 31-amino-acid peptide with a C18 fatty acid chain attached to a specific lysine residue. Tirzepatide is a 39-amino-acid dual agonist with a C20 fatty acid modification.
Ostergaard (2026) reviewed the manufacturing challenges in therapeutic peptide production. Peptide synthesis requires sequential addition of amino acids to a growing chain, with each coupling step taking hours. A single batch can require days of synthesis followed by lengthy purification to remove incomplete sequences and impurities. Scaling production means building entirely new synthesis and purification infrastructure, not simply running existing equipment longer.[1]
Hach et al. (2024) demonstrated that manufacturing process differences directly impact the properties and quality of follow-on GLP-1 polypeptides. Even small variations in synthesis conditions can affect peptide folding, aggregation, and bioactivity. This is why peptide drug manufacturing requires specialized facilities with tight process controls rather than general-purpose chemical plants.[5]
Chawathe et al. (2025) reviewed the full pipeline from manufacturing to market for short peptide drugs, identifying analytical challenges and delivery strategy constraints that compound the difficulty of rapid scale-up.[6]
New manufacturing facilities take 3 to 5 years to build, validate, and bring to full capacity. Eli Lilly announced $27 billion in U.S. manufacturing investment across sites in North Carolina, Texas, and Virginia. Novo Nordisk acquired Catalent manufacturing sites and committed to expansion in Ireland. Both companies project full capacity by late 2026.
What Happened to Patients During the Shortage
The shortage had measurable clinical consequences, particularly for diabetes patients who were already stable on GLP-1 therapy before the demand surge.
Choe et al. (2025) published data in Endocrinology and Metabolism showing metabolic deterioration in patients who lost access to GLP-1 receptor agonists during the shortage. Glycemic control worsened as patients were forced to switch to less effective alternatives or go without treatment.[2]
Nanayakkara et al. (2024) documented the same pattern in Australian patients. Their study in Diabetes Research and Clinical Practice found that GLP-1 RA shortages led to measurable declines in glycaemic control among specialist diabetes clinic patients.[7]
Phakey and Shen (2024) tracked the impact on Australia's Pharmaceutical Benefits Scheme prescriptions, showing how semaglutide and dulaglutide shortages disrupted prescribing patterns and forced clinicians to make suboptimal substitutions.[8]
The shortage also exposed equity gaps. Eberly et al. (2021) had already demonstrated racial, ethnic, and socioeconomic inequities in GLP-1 RA use among patients with type 2 diabetes, published in JAMA Health Forum. Patients in lower socioeconomic groups were less likely to be prescribed GLP-1 drugs even before the shortage.[9] Hasselbalch et al. (2025) confirmed in The Lancet Regional Health that socioeconomic factors strongly predicted semaglutide use for weight loss, meaning the shortage disproportionately affected those who already had less access.[10]
The Compounding Pharmacy Response
Federal law allows compounding pharmacies to produce copies of drugs that are on the FDA shortage list. During the semaglutide and tirzepatide shortages, hundreds of compounding pharmacies and direct-to-consumer telehealth platforms began producing and distributing compounded versions of these drugs at prices between $100 and $300 per month, compared to the $1,000+ monthly cost of brand-name products.
Chun et al. (2025) published real-world data in Diabetes, Obesity & Metabolism showing that compounded semaglutide produced meaningful weight loss and body composition changes, providing evidence that compounded versions could achieve clinical outcomes.[11]
Liu et al. (2025) published guidance in The American Journal of Managed Care on what healthcare providers need to know about navigating compounded semaglutide, including regulatory status, quality variability, and patient counseling considerations.[12]
The compounding response also brought safety concerns. Lambson et al. (2023) reported a case series of administration errors with compounded semaglutide reported to a poison control center, documenting dosing mistakes that led to adverse events.[3] The FDA received 605 adverse event reports tied to compounded semaglutide and over 320 for compounded tirzepatide by mid-2025. Independent assays found potency ranging from 68% to 122% of label strength across compounded products.
Some compounders used semaglutide salt forms (sodium and acetate) rather than the base form used in FDA-approved products. The FDA noted it does not have information on whether these salts have the same chemical and pharmacologic properties as the approved drug.
The Regulatory Fallout
When the FDA resolved the semaglutide shortage in February 2025, the legal basis for compounding semaglutide under the shortage exemption ended. The FDA set April 22, 2025 as the deadline for state-licensed pharmacies to stop compounding semaglutide injection products.
The transition was contentious. By September 2025, the FDA had issued more than 50 warning letters to U.S. and international companies that continued compounding or manufacturing GLP-1 receptor agonists. The warnings targeted claims that compounded products were "generic versions" or contained the "same active ingredient" as FDA-approved drugs.
Several compounding pharmacies and telehealth platforms filed legal challenges. The core argument: patients who had been stable on compounded GLP-1 drugs at affordable prices were now being forced back to brand-name products they could not afford, especially those without adequate insurance coverage.
Where Supply Stands Now
As of early 2026, both semaglutide and tirzepatide are off the FDA shortage list. Localized supply disruptions still occur as product moves through distribution chains, but the systemic nationwide shortage has ended.
The manufacturing buildout continues. Eli Lilly's facilities in Concord (North Carolina), a $6.5 billion site in Texas, and a $5 billion site in Virginia are all in various stages of construction and validation. The company also announced a $3 billion facility in the Netherlands for oral drug manufacturing. Novo Nordisk's Ireland-based expansion and acquired Catalent sites are being integrated into its production network.
Hach et al. (2024) emphasized that manufacturing process quality remains critical as production scales. Their analysis showed that even slight process variations in follow-on GLP-1 production can affect drug quality, a finding relevant both to brand manufacturers expanding capacity and to any future generic or biosimilar entrants.[5]
The pipeline adds complexity. Oral semaglutide (Rybelsus), retatrutide (a triple agonist in Phase 3), survodutide (a dual agonist), and several other GLP-1-based drugs are competing for the same manufacturing infrastructure. Ostergaard (2026) identified innovations in peptide design and manufacturing that may improve production efficiency, but new capacity takes years to come online.[1]
What the Shortage Revealed About Peptide Drug Markets
The GLP-1 shortage exposed a structural vulnerability in peptide therapeutics. When a peptide drug moves from a niche indication to a mass-market one, the manufacturing infrastructure cannot respond on the same timeline as demand. This is not a problem unique to GLP-1 drugs. Any peptide therapeutic that achieves broad-population approval will face the same scaling constraints.
The shortage also revealed the tension between drug safety regulation and patient access. Compounded GLP-1 drugs filled a real gap for millions of patients, but quality inconsistencies and dosing errors created genuine safety risks. The regulatory framework that allows compounding during shortages but prohibits it afterward creates a binary that does not account for the reality of patients who cannot afford brand-name products.
The equity data from Eberly et al. (2021) and Hasselbalch et al. (2025) suggests that resolving the supply shortage alone does not resolve the access problem.[9][10] If the drugs cost over $1,000 per month and insurance coverage remains inconsistent, the same populations who were underserved during the shortage will remain underserved after it.
The Bottom Line
The GLP-1 shortage lasted from early 2022 to early 2025, driven by a 587% increase in prescriptions that overwhelmed manufacturing infrastructure built for a smaller diabetes market. Peptide drug production cannot scale quickly because synthesis requires sequential amino acid coupling with multi-day batch times. The shortage forced patients onto less effective alternatives and exposed deep socioeconomic inequities in access. Compounding pharmacies filled the gap but introduced quality and safety concerns. Supply has stabilized as Novo Nordisk and Eli Lilly invest tens of billions in new capacity, but the access problem extends beyond supply into pricing and insurance coverage.