Ozempic underworld: Inside the black market of obesity drugs

BOULDER, COLO. — Not far from the majestic Rocky Mountains is an ordinary suburban neighborhood, a tree-lined street and a modest light gray home.

It’s not the kind of place you’d imagine an investigation into black market Ozempic would lead. But it did.

A CNBC investigation into counterfeit weight loss drugs revealed an international illegal marketplace where criminals either brazenly alter the drugs or ship the real product from overseas — what’s known as drug diversion and against federal law.

The operations mainly involve phony or illegal versions of Novo Nordisk’s diabetes drug Ozempic and its obesity drug Wegovy as well as Eli Lilly’s Mounjaro and Zepbound. All four drugs are in a class of wildly popular weight loss drugs known as GLP-1s. The skyrocketing demand for the treatments has led to criminal schemes attempting to capitalize on the surge.

CNBC bought a drug marketed as Ozempic from a company called Laver Beauty, which on its website and corporate documents listed its address on that quiet residential street in Boulder. The drug cost $219 for a month’s supply, a fraction of the list price of $968 for a month’s supply of Ozempic in the U.S.

The owners of the home in Boulder say they have no connection to the company — though they’ve received mail and a 1099 IRS tax form addressed to Laver Beauty.

The drug CNBC purchased was shipped via DHL from an office building in Shijiazhuang, China, about a four-hour drive from Beijing. The package that arrived at CNBC headquarters in Englewood Cliffs, New Jersey, was a plain cardboard box with no refrigeration except for two melted ice packs. Ozempic is supposed to be stored refrigerated. The drug packaging, which appeared authentic, featured Chinese writing and the Novo Nordisk logo.

In an email, Novo Nordisk said the drug appeared to be “diverted legitimate product that was produced for, and distributed to, the Chinese market during late ’23 and early ’24. Therefore, it would be unauthorized/unapproved for the US market.”

The company added that it “cannot confirm the sterility, which may present an increased risk of infection for patients who use the counterfeit product.”

Law enforcement sources told CNBC that the Ozempic received from China is part of a larger ongoing federal investigation into Ozempic packages being shipped to the U.S.

Laver Beauty did not respond to CNBC’s request for comment, but a person who identified himself as a company representative told CNBC in a WhatsApp chat, “All our products are genuine. We don’t sell fake ones.” The person acknowledged that the product CNBC purchased was intended for the Chinese market.

The representative also messaged that the Boulder address “is the previous address of our U.S. warehouse.” A day after CNBC inquired about the Boulder address, it was removed from the company’s website.

The Ozempic that CNBC purchased is considered an illegally diverted drug. A separate but related growing problem is the rise of counterfeit drugs — fake products purporting to be the real thing.

In the United Kingdom, authorities last year seized hundreds of counterfeit Ozempic pens — insulin pens that had been relabeled as Ozempic.

“We saw that the demand increased and quite often as it happens in these situations, criminals try and fill a gap where the supply and demand aren’t balanced for a particular product, and we started seeing real counterfeit versions of the Ozempic product on the market,” said Andy Morling, deputy director of criminal enforcement for the U.K.’s Medicines and Healthcare Products Regulatory Agency.

Morling spoke to CNBC from a warehouse outside London where the counterfeits are stored. A total of 869 Ozempic counterfeit pens were seized in 2023.

Counterfeit weight loss drugs have serious health risks, according to the pharmaceutical companies and federal officials. In some cases they could be fatal to someone using them.

Eli Lilly, the maker of Mounjaro and Zepbound, said it is actively fighting the counterfeits.

“We have a very elaborate and rigorous system to test medicines before they’re allowed to be used in patients. But unfortunately [counterfeits] don’t go through that system at all,” said Dr. Daniel Skovronsky, Eli Lilly’s chief scientific officer and president of Lilly Research Labs.

He showed CNBC a sophisticated fake that was labeled as Mounjaro but that contained a different medication entirely — one for Type 2 diabetes that doesn’t cause weight loss.

“It looks to all the world like Mounjaro, comes in a box that’s labeled as Mounjaro,” he said. “And it has pens that are labeled as Mounjaro. But it’s not Mounjaro at all.”

Counterfeiters are already trying to cash in on a weight loss drug that the company hasn’t even put on the market yet: retatrutide. CNBC found it’s being sold online.

“We’re testing it in Phase 3 clinical trials today. We don’t know yet, but I hope to get those results next year and we’ll find out,” Skovronksy said.

Asked about sites selling what they claim is retatrutide, Skovronksy said, “Yeah, that’s crazy … Even the real retatrutide is not ready for patient use outside of clinical trials.”

Finding fake or diverted Ozempic and other obesity drugs is common at the sprawling international mail facility located on the grounds of John F. Kennedy International Airport in New York City. More than 60,000 seizures of counterfeit and illegal goods were made last year at the facility.

“I am not surprised, unfortunately, any of these new type of drugs that we’re seeing, whether it be weight loss drugs or other drugs,” Sal Ingrassia, the port director overseeing U.S. Customs and Border Protection (CBP) at JFK, told CNBC. “We’ll see them either diverted, counterfeited or illegally shipped through this facility.”

According to CBP, since Jan. 1 the agency has made more than 198 seizures of medication labeled as Ozempic. Nine shipments of medication labeled as Wegovy were also seized, as well as one shipment labeled as Mounjaro.

The CBP seizures data doesn’t specify how much of that medication was real and diverted to the U.S. or counterfeit.

CNBC showed Ingrassia the Ozempic that it purchased from Laver Beauty, the package lacking the required refrigeration, and he said it was clear the shipment had “broken the legal supply chain.”

“This to me, is something that if we see, we are going to intercept and take action on. This is a dangerous product,” he said.

Ingrassia said he expects the number of interceptions of weight loss products to double this year over last.

And what happens to the seized items? Unless they’re part of an active investigation by the FDA, Ingrassia said, U.S. Customs isn’t allowed to destroy them, because the injection pens are categorized as medical devices. They are then sent back to the foreign supplier.

Ingrassia said that for the most part, diverted products are ordered online or via social media.

“These are mostly individuals that are ordering this, going online and looking for a deal. And obviously taking a big risk by doing that. But we’ve also seen these products being ordered by doctors’ offices,” he said.

To go after the sellers of counterfeit or illegally diverted drugs, the pharmaceutical industry has teamed up with BrandShield, a cybersecurity company.

BrandShield CEO Yoav Keren showed CNBC various sites that the company flagged and that ultimately got shut down, including a Facebook account and a TikTok account that impersonated GLP-1 makers and sold versions of the drug.

Spokespeople for Meta, the parent company of Facebook and Instagram, and TikTok said their platforms do not allow the sale of prescription drugs and that the companies take action to remove those listings.

A Meta spokesperson in an email to CNBC said, “This is a challenge that spans platforms, industries, and communities which is why we work with law enforcement, regulators, and private industry to combat this problem. We continue to invest resources and further improve our enforcement on this kind of content.”

Keren said 250 sites identified by BrandShield as related to bogus weight loss products were removed last year, eight times the number in 2022.

“It’s kind of a whack-a-mole, but we’re on them. We’re chasing them, this is our technology, we find them very quickly,” he said.

Counterfeit Ozempic has been reported in 15 countries, according to the World Health Organization, which issued a global alert in June warning of the health risks of purchasing fake products.

For the U.S. government, it’s a big problem.

“We are seeing a lot of diverted medicines coming in from Europe and South America,” said Nicole Johnson, national program manager for the Intellectual Property Rights Coordination Center, which fights counterfeiting. “But for counterfeits, a lot of what we’re seeing currently in the United States is just the reuse of old Ozempic pens — so people can actually just take the original packaging and fill it with saline.”

Johnson said the top countries where counterfeits and diverted drugs originate are India, China, the United Kingdom, Mexico and Turkey. In Turkey, she says, government-subsidized pharmaceuticals have fueled the counterfeit drug market.

Istanbul may be known for the beauty of the Bosphorus, surrounded by stunning palaces and mosques. But it’s also one of the epicenters of the lucrative counterfeit drug trade, according to U.S. authorities who track counterfeit drugs.

“What the criminals normally do is they find something to exploit to make more money. So the pharmaceuticals were then bought up, and then sold throughout the world — something that was supposed to help people, and it’s being exploited,” Johnson said.

Last fall, the Turkish National Police conducted raids throughout Istanbul as part of a coordinated international crackdown.

Maziar Mike Doustdar, executive vice president of international operations for Novo Nordisk, agreed that Turkey has become a hot spot for pharmaceutical crime.

Counterfeiters have acquired sophisticated packaging equipment that is “on par with the original company equipment,” Doustdar said.

“They source the equipment from pretty much the same place as we or our competitors are sourcing it. So, they make the packaging look very, very, similar to the original product,” he said.

Direnc Bada, an Istanbul-based attorney who represents major pharmaceutical companies in Turkey, pointed to “an increasing amount of online channels promoting these products … and it’s forbidden in Turkey actually to sell these through online channels.”

In the U.S., the FDA announced in an alert in December that it had seized “thousands of units of counterfeit” Ozempic in the “legitimate U.S. supply chain.”

Asked about the status of the investigation into the counterfeit Ozempic, an FDA spokesperson said there were no updates to the original alert.

The risks in purchasing counterfeit drugs can be high. Given the delicate nature of the formulation and the specific shipping requirements for the drugs, consuming illegal versions can be dangerous to a person’s health.

“It’s one thing to counterfeit a luxury bag. It’s a very, very different thing when you counterfeit a medicine,” Doustdar said.

Reports of issues with weight loss drugs containing semaglutide, the active ingredient in Ozempic, or tirzepatide, the active ingredient in Mounjaro, have seen a sharp rise since 2019.

“This is a very serious problem for us as a pharma company, as an industry, because patient safety is our license to operate. And you’re playing with people’s safety,” Doustdar said.

“There is no good counterfeit,” he said.

— CNBC’s Eunice Yoon and Paige Tortorelli contributed to this report.