One of the internet's biggest scams is the weight-loss drug craze.

• Lilly and Novo Nordisk are expanding their production facilities and capacity for weight-loss drugs such as Wegovy and Zepbound, with Lilly investing $3 billion to increase obesity drug production at a Wisconsin plant.
• Cybersecurity firm McAfee's Threat Research Team has observed a surge in pharmaceutical cybercrime due to supply and demand issues, with malicious websites, scam emails and texts, social media posts, and online marketplace listings being the main sources of the problem.
• People are increasingly turning to TikTok and other social media platforms and websites to buy branded and illegal GLP-1s, frequently without a prescription.

The law of supply and demand suggests that when demand exceeds supply, scammers become active. This is evident in the case of Eli Lilly and Novo Nordisk's super-popular weight-loss drugs.

The high demand for GLP-1 drugs such as Ozempic, Mounjaro, Wegovy, and Zepbound for treating type 2 diabetes and obesity, as well as those without prescriptions seeking them for weight loss, has led to production shortages. These drugs are expensive, and insurance coverage is often limited, making it difficult for consumers to access them.

The combination of various elements has led to a complex online marketplace for compounded versions of GLP-1 drugs, which are allowed by the FDA when proprietary ingredients are scarce, as well as an increase in fraudulent schemes selling both brand-name and counterfeit GLP-1s on websites and social media platforms.

Unauthorized sellers have been providing consumers with counterfeit, different, or no medication at all, resulting in expensive rip-offs. Novo has reported 14 deaths and 144 hospitalizations of people who took compounded semaglutide, the active ingredient in Ozempic and Wegovy. Novo has recently requested the FDA to ban the copycat drugs.

Numerous accounts and content on social media platforms and websites have been discovered by cybersecurity experts, consumer advocates, pharma researchers, and media investigators, revealing that bad actors have been conducting business, much of which is illegal or unethical.

In May, a joint investigation by Digital Citizens Alliance and Coalition for a Safer Web found that consumers are increasingly turning to TikTok and other social media platforms and websites to purchase branded and illicit GLP-1s, often without a prescription. The report revealed that scammers create accounts promising to sell the drugs for between $200 and $400 for a month's supply, which is significantly below market prices. These scammers use payment methods such as Zelle, Venmo, and PayPal to avoid tracking, rather than traditional credit cards.

"Scammers exploit people's emotions and desires, particularly the current desire to lose weight, according to Eric Feinberg, vice president of content moderation for the Coalition for a Safer Web. This makes them an ideal target for online scams that manipulate individuals psychologically and emotionally."

The investigation uncovered a common scam where sellers claimed the drugs were coming from overseas and then demanded an additional payment of $300 to $500 to release the order, which was actually held up in customs. The scammers were cunning, according to Tom Galvin, executive director of Digital Citizens Alliance. "They provided a tracking number from a delivery service that appeared to show the location of your package, but the tracking number was false." Digital Citizens spent just over $3,000 on GLP-1s, but despite the payment, no deliveries of the drugs were received.

"The scariest no-delivery ploys are those where you receive a product but are unsure if it's trustworthy or a legitimate company," said Abhishek Karnik, director for threat research and response for cybersecurity firm McAfee.

Phishing for weight-loss drug victims

McAfee's Threat Research Team found that weight-loss scams have become increasingly common across various platforms, including malicious websites, scam emails and texts, social media posts, and online marketplace listings. From January to April 2023, researchers discovered 449 risky website URLs and 176,871 dangerous phishing attempts related to Ozempic, Wegovy, and semaglutide, which is an increase of 183% compared to the same period in 2022.

Karnik's team has identified over 367,000 phishing attempts and found a 135% increase in risky URLs between May and August.

An international group of researchers published a study in JAMA Network Open in August, revealing that over 42% of the 317 online pharmacies they found advertising semaglutide for sale were operating illegally. These pharmacies were selling medications without prescriptions and shipping unregistered and falsified products. Out of the six purchases made, only three were delivered.

An investigation by CNBC uncovered the shady international market for fake weight-loss drugs. In the UK, authorities seized hundreds of pens labeled as Ozempic, but which were actually insulin pens disguised as Ozempic. Additionally, Lilly was found to be marketing its retatrutide, a GLP-1 drug still in clinical trials and not yet approved by the FDA, to the public.

Branded GLP-1s sold on the black market, which are counterfeits and diverted drugs, originate from various countries such as India, China, the UK, Mexico, and Turkey. These drugs often end up in the US, with New York's JFK International Airport being one of their destinations. The US Customs and Border Protection has made over 198 seizures of such products labeled as Ozempic since January 1.

Social media companies and web operators have implemented human monitors and technology to detect and shut down online scammers. A TikTok representative stated that the company strictly prohibits the sale of drugs and attempts to defraud or scam its community members. Additionally, TikTok's advertising policies do not allow the advertising of weight-loss products, including weight-loss injections and fat-burning pills.

Although official policies prohibit it, undeterred violators find ways to circumvent the shutdown of their accounts by using alternative methods such as misspelling drug names, using spaces between letters or combining semaglutide and terzepitide. They instruct interested buyers to communicate with them through direct messaging or by providing links to encrypted websites that offer anonymity and secrecy.

"Drug dealers now use social media platforms as their new street corners, constantly moving from one location to another, according to Galvin. This game of cat-and-mouse is becoming increasingly difficult to control."

TikTok removed all but one of the more than a dozen accounts that were found to be selling GLP-1s in violation of its policies, including @ozempic_weightloss, @sema.irel and @semaglutideandtr.

The shortage of semaglutide and tirzepatide in April and December 2022 led to an increase in the production and distribution of GLP-1s by compounding pharmacies and outsourcing facilities, which are typically sold through telehealth companies, medical spas, and wellness centers.

Unlike Lilly's and Novo's compounded GLP-1s, which are FDA-approved, the FDA and state boards of pharmacy oversee compounding facilities and ingredients. While some compounders comply with regulatory requirements, such as Henry Meds, Noom Med, Ro and others, many do not.

In 2017, Hims & Hers launched its gender-focused telehealth platform and added compounded semaglutide to its weight-loss program in May. Dr. Patrick Carroll, the company's chief medical officer, stated, "We waited until we were able to find the right compounding partner." Besides BPI Labs, Hims & Hers acquired MetasourceRx in September. The company also sells branded Ozempic and will offer liraglutide, the first generic GLP-1, next year.

FDA scrutiny

The FDA is currently investigating the unregulated and unlicensed sources of prescription drugs, and a spokesperson for the agency advised consumers to be cautious when purchasing drugs online. The agency's BeSafeRx campaign provides tips and tools to help consumers make informed decisions when buying drugs online.

In May, a survey by the KFF Health Tracking Poll revealed that approximately 12% of adults had taken a GLP-1 drug, with about half of them actively using the medications. Nearly 80% of those who took the drugs purchased them or a prescription for them from a primary care doctor or specialist, at a monthly cost of between $936 to $1,349 before insurance coverage, rebates, or coupons. Fewer individuals reported obtaining GLP-1s from an online provider or medical spa/aesthetic medical center (11% and 10%, respectively), while only 2% obtained them from somewhere else. However, it is estimated that many individuals have obtained GLP-1s without prescriptions through unregulated online channels and illicit online compounding pharmacies, many of which operate overseas.

Despite social media companies cracking down on illegal GLP-1 sellers, hundreds of influencers are promoting the drugs and their experiences with them on social media without consequences, according to a Fast Company report. Many of these influencers are sponsored and compensated by telehealth companies.

Celebrities are increasingly speaking out about their personal use of weight-loss drugs, which increases familiarity and curiosity among the public. In October, People profiled 64 celebrities who have talked about their weight-loss drug experiences, mostly on social media.

As researchers discover more conditions that can be treated with GLP-1 drugs, such as cardiovascular disease, kidney disease, dementia, addiction, and knee pain, prescriptions for Lilly's and Novo's GLP-1s will increase exponentially.

In September, a warning was issued in the Annals of Pharmacotherapy to manufacturers who use a legal loophole to sell vials containing semaglutide and tirzepatide to consumers without a prescription by stating that the drugs are for "research purposes only" and/or "not for human consumption." The authors found 40 websites selling what were labeled as "peptides" to consumers through an internet search.

The FDA issued warning letters to several companies, including Miami-based US Chem Labs in February, for multiple violations and demanded immediate action. Despite this, CNBC found on December 6th that US Chem Labs still listed compounded semaglutide on its website. Despite attempts to contact the company by phone and email, no response was received by press time.

The three companies identified by the authors of the Annals of Pharmacotherapy article were advertising GLP-1s on Facebook, which is owned by Meta. A Meta spokesperson stated that their policies prohibit content that defrauds people by promoting false or misleading health claims, including those related to weight loss, and they remove such content when they become aware of it. Following this, CNBC sent Meta the names of the three companies, and their Facebook pages were subsequently removed several days later.

Eli Lilly, Novo Nordisk battle with copycat drugs

Lilly and Novo are facing a dilemma over compounders, as the copycat versions have filled a gap left by the shortage of branded GLP-1s, drawing in patients who cannot obtain or afford the originals.

The pharmaceutical companies are now seeking to protect their domains from being used by compounding sellers. Lilly has sent cease-and-desist letters to many compounding sellers, while both companies have filed lawsuits against numerous compounding pharmacies for trademark infringement and deceptive marketing.

The FDA declared on October 2 that Lilly's tirzepatide was no longer in short supply, which could have put compounders of that ingredient out of business. However, two weeks later, after a public outcry from compounders' patients and a federal lawsuit brought by compounding pharmacies, the FDA backtracked and said it would reevaluate whether the drug is available, making a decision in mid-November.

The FDA stated on November 22 that it was still evaluating the situation and would not take any action against tirzepatide compounders until December 19, unless the agency made an earlier decision.

Despite the FDA listing Novo's semaglutide as "currently in shortage," Ozempic and Wegovy are "available." However, a Novo Nordisk spokesperson informed CNBC that availability does not necessarily mean immediate accessibility at every pharmacy, and patients may encounter variability at specific locations, regardless of whether a drug is in shortage.

Lilly and Novo have advocated for broadening insurance coverage for obesity medications, and the Biden administration recently proposed that Medicare and Medicaid extend their coverage for such drugs. However, the incoming Trump administration may scuttle this plan. Robert F. Kennedy, Jr., Trump's nominee to head the Department of Health and Human Services, has suggested that obesity should be tackled through healthy eating, not drugs.

The volatility in the obesity drug market has been reflected in recent earnings reports. In its third-quarter report on October 30, fell short of profit and revenue expectations, partly due to disappointing sales of its GLP-1s, even as demand for them continued to soar. A week later, reported third-quarter earnings in line with expectations, strengthened by robust sales of Ozempic and Wegovy. Despite this, the Danish company narrowed its 2024 full-year growth guidance, reflecting "expected continued periodic supply constraints and related drug shortage notifications."

This week, Lilly announced a $3 billion investment to expand its obesity drug production facilities in Wisconsin.

The demand for GLP-1s, regardless of their brand, compound, or source, will continue to increase, putting more pressure on social media platforms and web operators to prevent scams.

Galvin proposed that the companies should collaborate to identify scammers across platforms to avoid detection. He stated that many platforms view this as a PR issue rather than an internet safety issue. If they shared information about bad actors, people would find fewer of them.