Regulating and monitoring the online GLP-1 market

Transcript - Regulating and monitoring the online GLP-1 market

Alivia Kaylor: Hi, and welcome to another episode of Healthcare Strategies. I'm Alivia Kaylor, senior editor of Pharma Life Sciences. Today, we are unpacking the rise of GLP-1 medications, which have reshaped diabetes and weight loss management treatments while creating ripples in the online healthcare market. Joining me today are two industry experts from LegitScript: Scott Roth, the CEO, and Gerard Olson, the director of research. Scott and Gerard, thank you both for joining me today.

Scott Roth: Thank you for having us. We're excited to be a part of the conversation and really appreciate you opening up to get a lot of voices so we can all learn together.

Gerard Olson: Yeah, same. Excited to be here.

Kaylor: Yeah, definitely. This is a hot topic, so I appreciate both of you being on this episode. So, let's just go ahead and start by understanding the GLP-1 boom. We'll start with some context: GLP-1 medications have seen a dramatic rise in demand, particularly for weight management. For example, between 2022 and 2023, prescriptions for GLP-1 drugs more than doubled rates, and as a result, bariatric surgery fell by 26%. Now, Scott, these drugs have been around for diabetes management for a while now, so what's driving this recent surge in popularity?

Roth: First of all, I like to start pretty much every conversation by sharing our company's mission, which is to make the internet and payment ecosystem safer and more transparent. And I think that's just helpful context because it really shapes everything that we do and how Gerard, myself and the whole team here at LegitScript think about things. Thinking specifically about what's going on in this market right now, from my perspective, I feel like there are a couple of things that came together at once. One is in 2021; that's when we started to see semaglutide gain approval and start to really increase some of the performance and metrics that were coming from weight loss. I think that also really coincided with obesity being treated more as a chronic disease versus a lifestyle choice, and I think that was something that really has come into more of the mainstream today.

It's not quite there, but I think the combination of those two things really has opened up availability and access for so many people to be able to get these medications and drugs for their journey. And depending on the metrics that you trust or believe, thinking about obesity -- at least in America -- it's up to 50% or maybe even more of the population that is now eligible for these medications for something that they have been struggling with for quite some time. It's because of that we still see so much potential for this market and for people to be served by the medications that are available.

Kaylor: That's a good point. I do want to mention to our listeners that it wasn't only until, I think, 2013 that the American Medical Association listed obesity as a chronic disease. So yeah, about ten years later, here we are seeing these drugs in action specifically for weight loss, so it's kind of cool. All right. So, let's go ahead and look through a broader lens. Gerard, data shows that telehealth demand reached near-record levels in 2024, with a significant portion related to GLP-1 prescriptions. Does LegitScript's data also show the same trend? And if so, how has telemedicine contributed to this growth?

Olson: Yeah, so this is a really interesting question. I feel like we have actually a really good insight into this. One of the things that LegitScript does is have a certification program for online pharmacies and telehealth providers where we basically look at their practices and make sure they're compliant so that consumers and our business partners can feel confident using them. So, just in our certification applications alone, we've seen a real massive surge of telehealth companies applying to become LegitScript certified. Just in the first six months of this year, we received pretty much the same amount of new applications as we received in all of 2023. More than 60% of those who have applied are businesses that focus on weight loss medication, and 98% offer GLP-1 drugs. What we see here is that part of what's driving this trend is a real maturation of the telemedicine market.

During COVID, there started being these large developed networks of telehealth providers, and businesses and providers were also becoming a lot more comfortable with the idea of providing telehealth. At the same time, there was a loosening of a lot of telehealth regulations to accommodate all the COVID restrictions that were in place so that people could still access healthcare. This also led to a lot more consumer confidence in using telehealth as a way to get different healthcare. So, it basically helped create an almost entirely new customer base and a new industry really, which has been both good and bad. It has really increased patient access and increased attention to potential health signifiers. People seem much more likely to actually access healthcare when they feel like there might be a problem, but there's also the potential for a lack of standards. There's a real lack of substantive enforcement around telehealth just because it's so new, and I think a lot of the regulators don't have the ability to pursue significant action, and there's just a much higher possibility of over-prescription or patient fraud as well.

Kaylor: Yeah, absolutely. I want to go ahead and pivot to talk about the regulatory milestones that occurred in October. I think that's really important to mention. October was a very pivotal month for GLP-1 regulations, as you both know. So, Gerard, let's walk through the timeline real quick. On October 2, the FDA removed tirzepatide from the drug shortage list once Eli Lilly stated that they could meet the current and future demands at that moment. By mid-month, a lawsuit led by the Outsourcing Facilities Association prompted agencies to allow limited compounding. Can you elaborate a little bit more on these events, their implications, and where we are today with that shortage?

Olson: Yeah, absolutely. For the moment, it really means we're back to the status quo of the last few years. To give a little bit of context, compounding pharmacies -- I'm sure people are pretty familiar with them now -- are basically just pharmacies. They're allowed to manufacture certain drug products without obtaining any sort of FDA approval. In general, it's supposed to be produced for an individual patient based on a prescription by a doctor. And it's basically the theory there or the idea behind them is that compounding pharmacies are supposed to be able to ensure patient access to drugs in situations where that access would otherwise be jeopardized. Even though the products don't require FDA approval, they're generally limited to specific patients and specific situations. One of those situations where they're allowed is when there is a shortage, as we have with tirzepatide and semaglutide.

So, this has really been the nature of the market since 2022. There's just a huge amount of GLP-1 products on the market that are now compounded drugs because the manufacturers of the FDA-approved drugs have not been able to meet the supply. When the FDA declared the shortage to be resolved, basically what this would've meant was that tirzepatide could no longer be compounded -- at least not in the form that it's been compounded where it's basically a copy of the FDA-approved drug. So now that the FDA has pulled back on that a little bit and is reevaluating it, compounders can continue to compound them until the FDA moves forward and decides whether the shortage actually is over or whether they say, 'No, there still is a continuing shortage.' This doesn't mean that the FDA can't still take action if there are other concerns. If there are health concerns with certain compounded products, the FDA can still take action. The FDA is just saying that they will not take action solely for compounding the drug using tirzepatide.

Kaylor: Exactly. I just read right before we started this episode that the FDA won't go after these compounders until after December 19, or if they decide earlier. So, I guess these compounders can freely compound until the 19th. Until then, I guess we don't know, right?

Olson: Yeah, pretty much.

Kaylor: Okay. All right. Well, let's go ahead and continue on this track of safety and transparency. We know that safety and transparency are critical aspects when purchasing GLP-1 drugs online. A recent LegitScript report found an alarming 1,200% increase in violative GLP-1 ads online. Scott, can you explain more in-depth what these ads are, and what's driving the surge in problematic advertising?

Roth: For sure. Another part of our business, Gerard mentioned, is our certification part; we also have a monitoring portion of our business where we work with search engines, social media networks and e-commerce marketplaces to really help them flag any risky or problematic or violative advertisements or products sales that might be happening on their platform. As a part of this, typically, what we'll see is what we would consider maybe a good actor -- someone who is a legitimate provider that might be doing things that they shouldn't be doing. It might be things like misleading claims or advertising in a certain jurisdiction or geography where they're not approved to be able to do so and provide those medications.

The flip side of that is actually just bad actors who are looking to run a scam or take advantage of consumers by selling counterfeit products or are part of a nondelivery scam where you think you're going to actually be receiving something, but you don't actually get anything once you go through with the ultimate purchase. As a result of this, we're seeing things on both sides of that equation. So, we are constantly out there monitoring, trying to help with this. I think, on the good actor side, a lot of these companies who have more of this direct-to-consumer model -- maybe it's an online pharmacy or a telehealth provider -- aren't used to what's permissible when it comes to actually advertising in these areas.

And so, it's still a new and evolving field. Some compounding organizations might be doing something that they shouldn't be doing. Hopefully, in those cases, they'll receive notice, correct what they're doing and make sure they are doing things in line with the regulatory guidelines or the terms of service of the platforms they're advertising on. And then, unfortunately too, on the bad actor side -- just because this is such a huge market potential where there are so many people who are out there looking for these weight loss drugs and medications -- that's just what we see. Whenever there's a large population of folks who could be targeted, that's when the bad actors tend to come out of the woodwork and start to try to make a dollar by taking advantage of consumers who, unfortunately, in this case, really could benefit from some of what they're looking for online.

Kaylor: It's really unfortunate. I wrote an article back in early September that covered a study on the dangers of purchasing semaglutide from unregulated online sources. The study found that of the six ordered, three were part of the nondelivery schemes you were discussing. They were paid for but never delivered. So that's half that is out right there. And then, the other three had major issues. They had labeling discrepancies, inaccurate dosing and contamination. Especially for inaccurate dosing, one of those contained up to 39% more the active ingredient than what it had originally stated, which could heighten the risk of overdose. This is especially important because U.S. poison centers have documented a 1,500% increase in semaglutide-related calls -- many linked to overdoses from these exact types of products that we are talking about. It's clear that safe weight management requires medical oversight and stricter regulation, which you're saying these companies aren't necessarily used to. So Gerard, what does stronger regulation really look like for this online market, and how can we increase consumer confidence?

Olson: I think one thing we have to look at here is we've been talking a lot about the compounding pharmacies, but there are other avenues for illicit GLP-1 sales. A lot of these pharmacies, they're not really pharmacies. They're basically unapproved drug sellers. They're not compounding pharmacies. This is a trend that we've seen throughout the history of LegitScript. And what we've really been chasing is these large rogue pharmacy networks that find a drug trend, jump on it and start selling counterfeit or unapproved versions of these drugs to consumers without requiring a prescription or holding any sort of licensure. And that's what the main danger is behind those rogue pharmacies. There are also concerns about compounding pharmacies, but most of the danger comes from these rogue pharmacies that have no requirements at all and do not follow any regulations.

Better regulations look like more enforcement of the current regulations. We have the laws on the books. It's not really a case of folks operating inside the law, and the law is not doing a good enough job to make sure they're safe. It's more that people are operating outside of the law. These are clearly illegal websites. So, one thing that helps is better consumer education -- making sure consumers know what a legitimate online seller looks like and what the signals they need to look at to make sure they can feel confident that the drugs that they're getting are safe. As you said, there's really a wide range of potential problems that can arise from these drugs -- there are quality issues, unsafe ingredients and dosing issues.

This is an issue with both compounding pharmacies and unapproved rogue pharmacies. Consumers are not being properly informed about how much they're supposed to dose themselves since they're usually not coming in the prefilled injection pens that the approved forms do. And then, even with compounding pharmacies or telehealth, there can be really lax prescribing standards where maybe people might not be eligible for the drug, but there's not a clear following of the standards that you would meet in an in-person consultation. Then, you also have issues with counterfeits where a lot of these rogue pharmacies are creating counterfeit versions and selling them as the approved versions. They do not meet the standards and can be contaminated. So, there's a wide range of issues here, but it comes down to us just needing better consumer education and better enforcement of the existing regulations.

Kaylor: And something I guess I can't move on from is the ads, right? The problematic ads. Gerard, LegitScript data shows that 83% of problematic GLP-1 ads involve jurisdictional violations, while others fail to meet prescription requirements. Can you explain what this means in detail and how these violations impact consumer trust and the overall market?

Olson: Yeah, absolutely. Jurisdictional violations can mean a wide range of things, but we consider them to be violations of the law in the specific jurisdiction where operating. The main thing we see there is advertising to consumers in jurisdictions where that's not allowed. In the U.S., we're very different from most other countries in the world, where manufacturers can have direct-to-consumer advertising for pharmaceutical drugs. That's not the case in most other countries. So what we see a lot of times is advertising of these prescription-only drugs to consumers online. Those are the jurisdictional violations that we're most likely to see, which highlights part of the issue here in the U.S. -- as we've seen in the compounding pharmacy and advertising there. While there are restrictions on how manufacturers can advertise to consumers, there's no prohibition on advertising or the language that compounding pharmacies can use when advertising to consumers. So a lot of products are often marketed in a misleading manner. The FDA will sometimes go after this sort of advertising, but it's very limited and comes down to whether they are promoting it as being better or equal to the FDA-approved drug. But we see a lot of other claims and advertising that fall outside of that scope, so that's one thing that we are looking at from the advertising side at LegitScript. The prescription requirement for the ads we see applies to products clearly being sold without any prescription. Those are the real violations we're most concerned about, but they are much rarer compared to the jurisdictional violations.

Kaylor: I got it. Thank you. That was a really good explanation. Scott, we mentioned merchant certification applications in our conversation before. There has been a surge in healthcare merchant certification applications this year -- many tied to GLP-1 medications. Can you explain to our audience what these are and what this signals about the market?

Roth: Sure. LegitScript has an industry-recognized certification program consisting of a rigorous vetting process and ongoing monitoring of companies that are providing goods and services from a healthcare and wellness perspective. It could be an operator of an online pharmacy, telehealth platform, facility or pharmaceutical manufacturer. We even have a certification for addiction treatment centers. All of this information is fully available on our website, but the standards fall into three different categories. The first is registration and compliance -- so checking if this business is who they say they are. Do they have the proper licensure and registration for their company in place? The second part focuses on internal practices -- specifically, what procedures you follow regarding the medications you provide and how they align with established standards. Are you playing by the rules when it comes to the different providers or the networks that you're connected with on that side? So it's more about their business practices and making sure that they're doing things in an above-board manner.

The last part focuses on their external practices -- how they engage with the public. This includes a wide range of factors, such as whether their claims align with the type of business they operate and the services they provide. We collaborate with businesses in this space to vet them thoroughly, then monitor them on an ongoing basis to ensure they continue to meet the certification standards we've established. In return, they receive the LegitScript seal of approval, which they can display on their website. This seal helps build consumer confidence, assuring visitors that the business is LegitScript certified. Consumers can also search for certified providers through LegitScript, knowing these businesses have been vetted, continuously monitored, and adhere to rigorous standards.

What this means for the market is, again, this is a big, growing space. We continue to see more and more people coming to us to get this certification so they can build up that confidence, and have the ability to advertise and grow their business. And to me, it's really encouraging because it also means that people want to do things the right way, want to build, and be able to make sure that they're putting their best foot forward in how they're operating their business.

Kaylor: I'll throw this question to Scott or Gerard -- whoever wants to take it. If you both want to comment, please do. So, as we move forward, do you think that GLP-1 demand will continue to grow, or are we finally reaching a plateau?

Roth: I'll weigh in from my perspective -- we're still in the early innings of this, and it really comes down to math. Again, in the U.S., there are estimates that 50% of the population is struggling with chronic obesity. So, this is something where you then apply that to other countries across the globe. The numbers might vary a little bit, but there are so many people out there who can be served through proper medications around weight loss.

When you look at the number of people who are taking these medications now, it's still so small compared to the overall amount that could be benefiting from these. And so, that's what leads me to believe that we're still kind of in the early days of this and, again, one of the reasons why I'm really grateful for your podcast. We're all learning as this evolves -- the more voices we can have at the table as we see continued shifts, changes and adjustments in the market, the better it will be for health overall and for consumers and their wellness.

Kaylor: Excellent. Well, thank you, Scott. Thank you, Gerard, for sharing your insights into this GLP-1 boom.

Olson: Thanks.

Roth: Thanks for having us.

Kelsey Waddill: And thank you, listener, for tuning in. If you liked what you heard, head over to Spotify or Apple and drop us a review. We will be choosing some of our reviews to be right on the show in appreciation. So keep listening through to the end, because you might get name-dropped. See you next time! Music by Vice President of Editorial Kyle Murphy, and production by me, Kelsey Waddill. This is an Informa TechTarget production.