Fifth Circuit upholds the FDA shortage decisions that closed off compounded semaglutide and tirzepatide

A federal appeals court has upheld the FDA decisions that ended the drug shortage listings for tirzepatide and semaglutide. Those listings were the legal opening that let compounding pharmacies sell low-cost copies at scale.

The U.S. Court of Appeals for the Fifth Circuit issued two opinions on August 27, 2026. One covers tirzepatide, sold as Mounjaro and Zepbound. The other covers semaglutide, sold as Ozempic and Wegovy. Both affirm district court judgments in favor of the FDA.

The ruling does not change what anyone can buy today. Compounded versions of these medicines have been outside the shortage exception for more than a year. What the court settled is whether the way the FDA closed that exception was lawful.

Two cases, two brand-name manufacturers, one legal question

The plaintiffs in both appeals were the Outsourcing Facilities Association and North American Custom Laboratories, which does business as Farmakeio Custom Compounding. They sued the FDA and its acting commissioner, Kyle Diamantas.

Eli Lilly intervened on the FDA's side in the tirzepatide case, docket number 25-10600. Novo Nordisk intervened in the semaglutide case, docket number 25-10758.

A shortage listing matters to compounders because of how federal compounding law works. An outsourcing facility registered under section 503B may compound from a bulk drug substance only when that substance is on the FDA's 503B bulks list, or when the finished drug is on the agency's shortage list. Once tirzepatide and then semaglutide came off the shortage list, neither condition was met.

According to the tirzepatide opinion, the FDA removed that drug from the shortage list on October 2, 2024 and confirmed the removal on December 19, 2024. The semaglutide removal followed in early 2025.

The court treated the missing rulemaking step as harmless

The compounders made two arguments. The first was procedural: taking a drug off the shortage list was effectively a new rule, so the FDA had to go through notice-and-comment rulemaking under the Administrative Procedure Act. The second was substantive: the decision was arbitrary and capricious because the agency misread the supply and demand evidence.

The panel rejected both. In the tirzepatide opinion it wrote that the FDA did not violate the Administrative Procedure Act in either respect. Any procedural shortfall was harmless, the court reasoned, because compounders had actual notice of what the agency was considering and a real opportunity to submit information.

The semaglutide opinion is short and rests on the first one. The court wrote that it affirmed the district court's judgment for the same reasons it affirmed in the Eli Lilly case, that any error in skipping notice and comment was harmless, and that the agency's action was not arbitrary or capricious.

Manufacturing capacity carried the supply analysis

On the merits, the court pointed to the roughly $23 billion Eli Lilly had put into expanding manufacturing capacity, which the FDA read as enough to meet projected demand.

In the semaglutide case the court found that the agency had weighed the supply and demand data reasonably, and that it had taken wholesaler stockpiling into account rather than ignoring it.

That reasoning is about the administrative record the FDA built in 2024 and 2025. It is not a finding that these drugs can never be relisted if supply fails again.

The narrow compounding paths that remain were not widened

Day-to-day practice is governed by the FDA's own compounding policy, which this ruling leaves in place.

Under that policy, a state-licensed 503A pharmacy that fills four or fewer prescriptions in a calendar month of a product that is essentially a copy of a commercially available drug is not a current enforcement priority for the agency. A prescriber can also document that a specific patient needs a product that differs in a clinically significant way from the approved version.

Neither of those is a general permission to sell compounded semaglutide or tirzepatide, and neither was created or expanded by the Fifth Circuit. Products still marketed as compounded GLP-1 medicines, particularly through online sellers, are worth asking a pharmacist or prescriber about before use.