Business briefs
By NewsPress Now
FDA: Lilly
obesity drug knockoffs must come off the market
WASHINGTON | Specialty pharmacies and online companies that have been selling off-brand copies of two blockbuster drugs for obesity and diabetes will need to phase out their versions next year under a federal decision issued Thursday.
The Food and Drug Administration said that a nationwide shortage of Eli Lilly’s Zepbound and Mounjaro has been resolved, eliminating the need for copycat versions of the drugs that have become wildly popular with Americans trying to lose weight.
The decision is a win for Lilly — which had been pressing the FDA to take the step for months — and is expected to impact how patients access the drugs, including how much they pay.
Zepbound is FDA-approved to treat obesity and Mounjaro is approved for diabetes. They use the same active ingredient, tirzepatide.
The FDA said Thursday that “Lilly’s supply is currently meeting or exceeding demand,” after two years of shortages.
Both drugs are part of the GLP-1 class that has shown unprecedented results for helping people shed weight by decreasing appetite and boosting feelings of fullness. Wegovy and Ozempic — competing drugs from Novo Nordisk — remain on the FDA’s shortage list.
With demand for GLP-1 drugs booming, compounding pharmacies and telehealth companies like Hims and Ro have jumped into the market, selling cheaper versions online. People can usually get a month’s supply for several hundred dollars.
Thursday’s decision gives businesses between 60 and 90 days, depending on their size, to phase out their products.
The FDA permits compounded versions of brand name drugs when they are in shortage, and the shift back to Lilly’s medications could improve safety for consumers. The FDA warned patients last year about problems with the ingredients and formulations of some GLP-1 drugs sold online. The agency has limited oversight of compounding pharmacies, which are primarily overseen by state authorities.
Compounding pharmacies use raw drug ingredients to produce customized versions of prescription medications — for instance, when patients have allergies to certain ingredients. The industry has grown into a multibillion-dollar business over the past decade amid increasing drug shortages.
Demand for off-brand GLP-1 drugs has been amplified by aggressive online promotions from telehealth companies, which aren’t subject to the same marketing rules as drugmakers.
The FDA previously declared an end to the shortage of Mounjaro and Zepbound in early October, but reversed its decision after public pushback and a lawsuit filed by compounding pharmacies.
FDA updates the definition of ‘healthy’ foods
Packaged foods in the U.S. will have to follow new rules in order to call themselves “healthy,” according to changes finalized Thursday by the Food and Drug Administration.
It’s an update of the agency’s definition originally devised 30 years ago. The move is aimed at helping Americans navigate food labels at the grocery store and make choices that are aligned with federal dietary guidelines — in hopes of reducing rates of diet-related chronic disease, the FDA said.
Under the rule, products that claim to be “healthy” must contain a certain amount of food from one or more food groups such as fruit, vegetables, grains, dairy and protein. And for the first time, the rule sets certain limits for added sugars. Foods must also limit sodium and saturated fat at levels that depend on the type of product, the FDA said.
The change banishes foods such as sugary cereals, highly sweetened yogurts, white bread and some granola bars from bearing a “healthy” label, while allowing foods such as avocados, olive oil, salmon, eggs and some trail mix to use it. Even water can now be labeled as healthy, the agency said.
“It’s critical for the future of the country that food be a vehicle for wellness,” FDA Commissioner Robert Califf said in a statement. “Improving access to nutrition information is an important public health effort the FDA can undertake to help people build healthy eating patterns.”
The new rule will take effect within two months and food manufacturers will have until February 2028 to comply. A label that designates certain foods as healthy is still being developed, FDA officials said. Under the previous rule, about 15% of products were eligible for the healthy designation, but only 5% made the claim.
First proposed in 2022, the change is a much-needed update to “horribly outdated” guidance, said Dr. Dariush Mozaffarian, director of the Food is Medicine Institute at Tufts University.
“Big picture, this is a huge improvement from a 30-year-old outdated definition based on 40-year-old science,” he said.
The new rule acknowledges that dietary and nutrition knowledge has progressed over three decades and that the previous definition didn’t jibe with dietary guidelines that are the cornerstone of federal programs and policies.
Consumer Brands Association, a food industry trade group, said that the new rule “stands to exclude some packaged foods, despite countless years of industry innovation to provider healthier options.”
Sarah Gallo, an official for the group, said it is concerned the new rule “is not based on clear and unambiguous scientific evidence” and doesn’t fully consider the full potential economic impact on consumers.
The updated criteria are based on data that could improve public health, including diet-related chronic ailments such as heart disease and diabetes, the FDA said.
More than three-quarters of Americans have diets low in vegetables, fruit and dairy, according to the FDA. Nearly 80% exceed limits on saturated fat, more than 60% exceed limits on added sugars and about 90% exceed limits on sodium that can reduce chronic disease.
Home sales
hit fastest pace since March
Sales of previously occupied U.S. homes rose in November to their fastest pace since March with home shoppers encouraged by a wider selection of properties on the market, even as mortgage rates mostly ticked higher.
Existing home sales rose 4.8% last month, from October, to a seasonally adjusted annual rate of 4.15 million, the National Association of Realtors said Thursday.
Sales accelerated 6.1% compared with November last year, representing the biggest year-over-year gain since June 2021. The latest home sales topped the 4.1 million pace economists were expecting, according to FactSet.
Home prices increased on an annual basis for the 17th consecutive month. The national median sales price rose 4.7% from a year earlier, to $406,100.
Despite increasing in November and October, home sales are still running below last year’s pace, when they sank to a nearly 30-year low.
“Looks like we won’t match last year in terms of the annual total, so it will be the lowest home sales since 1995,” said Lawrence Yun, the NAR’s chief economist.
The U.S. housing market has been in a sales slump dating back to 2022, when mortgage rates began to climb from pandemic-era lows. A shortage of homes for sale has helped prop up prices, which as of last month are up 50% nationally since 2019.
Mortgage rates have come down this year after the average rate on a 30-year home loan reached a 23-year high of nearly 8% in October 2023, but not nearly enough to make a difference for many would-be homebuyers.
The average rate eased to a two-year low just above 6% in September following the Federal Reserve’s decision to cut its main interest rate for the first time in more than four years. But it has mostly risen since then. It was 6.6% last week, according to mortgage buyer Freddie Mac.
Home sales that closed last month likely reflect contracts signed in September and October, when mortgage rates were more attractive.
Heading into next year, the outlook for mortgage rates remains cloudy. Many economists predict that the average rate on a 30-year mortgage will ease next year, but generally hold above 6%.
Mortgage rates are influenced by several factors, including the moves in the yield on U.S. 10-year Treasury bonds, which lenders use as a guide to price home loans. Bond yields shot up Wednesday after the Fed signaled that it will likely deliver fewer cuts to rates next year than it forecast just a few months ago. While the central bank doesn’t set mortgage rates, its actions and the trajectory of inflation influence the moves in the 10-year Treasury yield.
Home shoppers who could afford to buy in November benefited from a pickup in the homes that are available. There were 1.33 million unsold homes at the end of last month, down 2.9% from October, but up 17.7% from November last year, NAR said.
That translates to a 3.8-month supply at the current sales pace, down from a 4.2-month pace at the end of October last year, but up from 3.5-month pace in November last year. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers.
“We are seeing sales increase because of this increase in inventory of inventory,” Yun said.
Still, the supply of homes on the market remains about 30% below what it was before the pandemic.
Limited inventory, especially in the more affordable price range of a given market, helps drive prices higher. That’s one reason first-time homebuyers, who don’t have any home equity to put toward their down payment, continue to struggle to afford a home.
They accounted for just 30% of all homes sold last month. That’s up from 27% in October, but down from 31% in November last year. First-time buyers have accounted for 40% of sales historically.
Homebuyers who can afford to sidestep mortgage rates and pay all cash for a home accounted for 25% of sales last month, down from 27% a year earlier.
U.S. applications for unemployment benefits come down
The number of Americans applying for unemployment benefits fell markedly last week following a big increase the week before.
Jobless claim applications declined by 22,000 to 220,000 for the week of Dec. 14, the Labor Department reported Thursday. That’s fewer than the 229,000 analysts were forecasting.
Continuing claims, the total number of Americans collecting jobless benefits, fell by 5,000 to 1.87 million for the week of Dec. 7. That was also fewer than analysts had projected.
The four-week average of weekly claims, which quiets some of the week-to-week volatility, rose by 1,250 to 225,500.
Weekly applications for jobless benefits are considered representative of U.S. layoffs.
While the job market has shown some softening recently, it remains broadly healthy and has held up better than many experts predicted considering that interest rates have been elevated for years. The Federal Reserve instituted a flurry of rate increases in 2022 and into 2023 to try to suppress the four-decade high inflation that took hold when the U.S. economy rebounded from the brief but sharp pandemic recession.
The Fed cut its benchmark rate again on Wednesday — its third cut in a row — in response to broadly receding inflation, though it has proven difficult to get down to the U.S. central bank’s target of 2%.
The bigger surprise, which led to a huge selloff on Wall Street Wednesday, was that the Fed projected just two rate cuts in 2025, down from the previous four.
Earlier this month, the government reported that U.S. job openings rebounded to 7.7 million in October from a 3 1/2 year low of 7.4 million in September, a sign that businesses are still seeking workers even though hiring has cooled.
In November, U.S. employers added a strong 227,000 jobs, following a paltry 36,000 in October, when the effects of strikes and hurricanes had sharply diminished employers’ payrolls. The government also revised up its estimate of job growth in September and October by a combined 56,000.
—From AP reports
