Grapevine

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.

Counterfeit medication

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.

Andy Morling, deputy director of criminal enforcement for the U.K.'s Medicines and Healthcare Products Regulatory Agency, holds up a real and fake Ozempic pen. CNBC

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.