Weight loss drugs: liability challenges, legal landscape and insurance exposure

Over the past five years, medications like semaglutide (Ozempic/Wegovy) and tirzepatide (Mounjaro) have spurred a weight loss revolution. Designed to mimic hormones regulating blood sugar, digestion, and appetite, their popularity has soared: 12% of adults in the US and 3% in the UK are reportedly using these drugs. This article explores the scientific basis, emerging risks, and legal landscape surrounding weight loss drugs, focusing on their implications for insurers, regulators, and healthcare providers in 2025.

Scientific Foundations and Mechanisms

Semaglutides act as GLP-1 receptor agonists, imitating glucagon-like peptide-1 to regulate appetite and blood sugar. Tirzepatides add a second mechanism, targeting both GLP-1 and glucose-dependent insulinotropic polypeptide (GIP), which enhances weight loss. These drugs are administered through weekly injections or daily tablets, suppressing hunger and slowing gastric emptying to promote fullness.

New drugs such as ofrorglipron, retrarutides, cargisema, and bimagrumab are in development. Pending clinical trials, these may offer easier administration and more targeted outcomes, potentially preserving lean muscle mass more effectively.

Side Effects and Safety Concerns

Although effective for weight loss, these medications carry risks. Common side effects include nausea, vomiting, and diarrhea. More serious complications have been reported, such as gastroparesis, pancreatitis, gallbladder disease, ischemic bowel, and possibly vision loss due to rare eye conditions. There is ongoing investigation into a potential link with deep vein thrombosis.

The rapid expansion of weight loss drug use has raised questions about prescribing practices and off-label use, especially via online pharmacies and telehealth services. Some companies have promoted off-label "microdoses" for individuals outside the approved drug indications, sometimes dispensing prescriptions after only brief online consultations without thorough medical oversight.

Regulatory Response

On September 9, 2025, the US Department of Health and Human Services (HHS) and Food and Drug Administration (FDA) announced significant reforms to curb misleading direct-to-consumer pharmaceutical advertising[1]. The FDA's concern centers on the lack of balanced information about risks—particularly for seniors—and the prevalence of deceptive ads from compounding pharmacies marketing unapproved versions of semaglutides. Thousands of cease and desist letters were sent to companies violating advertising standards[2].

Legal Landscape: The ‘Ozempic MDL’

Litigation is underway in the US, with 2,900 claims consolidated in a multidistrict litigation (MDL) in Pennsylvania, informally known as the "Ozempic MDL." These cases involve various weight loss drugs and manufacturers and allege failure to warn, strict liability, negligent design, negligent marketing, concealment of risks, and consumer protection violations.

Central legal issues include:

• Intended vs. Off-Label Use: Liability may depend on whether drugs were prescribed for their approved uses (e.g., Ozempic for diabetes, Wegovy for weight loss) or off-label.

• Adequacy of Warnings: While some risks carry "black box" warnings, others—like gastrointestinal injuries—do not, raising questions about manufacturers’ duty to inform.

• Learned Intermediary Doctrine: This principle can protect manufacturers if physicians were adequately warned, though misleading or incomplete warnings may still result in liability.

Directors and officers (D&O) may also face liability, especially if executives are found to have knowingly understated risks, echoing precedents from opioid litigation.

Healthcare and Insurance Considerations

Insurance exposure is expanding, particularly for medical providers, med spas, and telehealth companies offering compounded weight loss drugs. The FDA has already issued warnings to companies like “Hims & Hers Health” for illegal marketing of compounded semaglutide, suggesting potential forthcoming enforcement actions against healthcare professionals and organizations[3].

Med Spas, Compounding Pharmacies, and Expanding Risks

Med spas and compounding pharmacies are increasingly producing and marketing off-brand versions of these drugs directly to consumers. Some supplements claim to mimic GLP-1 effects, blurring the lines between regulated medicine and unregulated wellness products. Regulatory scrutiny has intensified, with cease and desist orders targeting compounding pharmacies for misleading advertising.

The pool of defendants may broaden beyond drug manufacturers to include med spas, compounding pharmacies, and telehealth providers. In addition to liability cases, trademark infringement suits have emerged, raising new coverage issues involving advertising injury and intellectual property under general liability policies.

Future Litigation and Trends

Plaintiff attorneys active in the Ozempic MDL have a track record in major cases involving tobacco, asbestos, and opioids. Their strategy includes broadly-worded pleadings to maximize recovery. As the MDL continues, expert testimony will be vital to determine causation and damages.

Insurers should pay close attention to new injury reports, such as vision impairment, which has led to separate litigation in New Jersey. In November 2025, the New Jersey Supreme Court consolidated numerous vision loss claims into a multicounty litigation, running parallel to the main MDL and expanding the scope of cases beyond gastrointestinal injuries.

Regulatory Contradictions and Market Growth

Despite ongoing litigation, regulators continue to approve new uses for weight loss drugs. The FDA’s recent endorsement of Ozempic for reducing kidney disease risk highlights its therapeutic potential. Meanwhile, global spending on these drugs is projected to exceed $130 billion within five years, and the market value of leading companies continues to climb, reflecting strong investor confidence.

Strategic Considerations for Insurers

As liability risks evolve, insurers should consider:

• Developing weight loss drug-specific exclusions to manage exposure, similar to PFAS exclusions.

• Monitoring claims involving off-label use and reserving rights where appropriate.

• Evaluating D&O liability as litigation broadens, especially regarding alleged misrepresentation.

• Understanding exposure related to telehealth providers and compounding pharmacies, particularly in light of regulatory actions and the possibility of increased enforcement.

Employers may also weigh the benefits of improved health and productivity from weight loss drugs, which can lower healthcare costs associated with obesity-related diseases.

Conclusion

Weight loss drugs represent a paradigm shift in managing obesity and chronic disease. While their adoption brings undeniable public health benefits, the rapid pace of adoption positions them as an emerging risk with complex legal, regulatory, and insurance implications. For insurers, healthcare professionals, and regulators, the challenge in 2025 is to balance the promise of innovation with the need for vigilant oversight and accountability.

[1]  FDA Launches Crackdown on Deceptive Drug Advertising | FDA

[2] FDA posts more than 100 warning and untitled letters in ad crackdown | RAPS

[3] Hims & Hers Health, Inc. dba Hers - 09/09/2025 | FDA