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ACA’s rapid rise and sudden closure last year, as described by former employees and in internal documents, highlight the profitable but risky business spawned by the popularity of Ozempic and Mounjaro. The medications, which are coveted for their weight-loss effects, brought in more than $9 billion and nearly $3 billion, respectively, for their manufacturers in the first three quarters of 2023. Patients’ desire for these drugs has made them hard to get, leading the Food and Drug Administration to declare a shortage. The FDA’s designation — which could change at any time — has opened the door for pharmacies like ACA to make and sell custom versions of the medications in sterile labs.
Compounding pharmacies typically craft small-batch drugs for customers with special medication needs, but many have jumped at the opportunity to cash in by making weight-loss drugs. ACA’s pivot into weight loss was particularly forceful, with such products accounting for the vast majority of its orders, according to seven former employees. The pharmacy made millions in the first seven months of last year as it ramped up to fill more than 1,000 prescriptions per day, according to three former employees and internal records, although its exact haul couldn’t be determined. The Washington Post interviewed a total of eight former employees, most of whom spoke on the condition of anonymity to discuss sensitive internal matters, and some feared retaliation from their prior employer.
ACA’s leaders have attributed its closure to the death of a key employee, but that isn’t the whole story. As it increased production, ACA’s staff swelled to about a dozen pharmacists and 30 technicians, including some with little to no experience working in a pharmacy, two former employees said. The Post found that clients complained that patient medications were sent to the wrong address, the company’s national accreditation lapsed after just a few weeks, and an inspection by state regulators went poorly.
Three former employees told The Post that staffers openly used ACA’s weight-loss medications on themselves, including two who said they had done so without a prescription.
Ned Ashley, chief executive of ACA’s parent company, Rx Partners, said in a statement that closing ACA was a “nuanced and multifaceted” decision, adding that the death of its chief operating officer “played a large part.” The death was a suicide, according to public records.
Ashley said questions submitted by The Post about ACA’s finances, operations and regulatory problems contained “various inaccuracies” but declined to elaborate. ACA has no record of receiving any reports of serious patient harm linked to its compounded weight-loss medications, he said, adding that he has no knowledge of employees using the pharmacy’s drugs without a prescription.
Dean Flener, a spokesman for the Tennessee Department of Health, wouldn’t comment on the findings of the inspection.
The state health agency issued a disciplinary order to ACA in August that doesn’t cite specific deficiencies but indicates areas where staff would have to be retrained before ACA could resume compounding, including keeping equipment free of contaminants and ensuring proper employee hygiene and cleaning.
“It’s apparent they were having issues maintaining sterility,” said Dan Troy, a former FDA chief counsel who’s now a managing director at Berkeley Research Group who reviewed the disciplinary order.
“Maintaining sterility is hard even for the largest, best-funded, most sophisticated pharmaceutical manufacturers,” he said, adding that compounding pharmacies have struggled with this for years.
ACA shared office space with other Rx Partners pharmacies in a nearly 27,000 square-foot concrete building, separated by a thin, grassy strip from a freeway in southwest Nashville.
Initially, ACA specialized in products as varied as anti-aging and pediatrics, according to a local media report in March 2022. That month, the FDA placed semaglutide — the active ingredient in appetite-suppressing drugs Ozempic and Wegovy — on its shortage list, and ACA began advertising semaglutide on Facebook and Instagram a few months later.
“A generic is NOT available commercially … but we make it in our lab at a low cost to you!” the post states, name-dropping the two blockbuster drugs with hashtags.
By early 2023, tirzepatide — the active ingredient in Mounjaro — and semaglutide made up the vast majority of ACA’s orders, according to seven former employees.
It doesn’t take advanced chemistry to convert raw semaglutide from powder form into a solution that can be injected, pharmacists say, but producing sterile drugs is a high-wire act.
Unlike a pill, which passes through the digestive system, injectable drugs present a greater risk if contaminated. ACA emerged as an attractive option for prescribers looking for a compounding pharmacy that could ship semaglutide and tirzepatide nationwide, according to several former clients.
FDA has cautioned that it can’t vouch for the safety or effectiveness of compounded semaglutide.
“Compounding pharmacies have really saved the day for millions of patients” when it comes to weight-loss drugs, said Scott Brunner, chief executive of the trade group Alliance for Pharmacy Compounding, although he said he was unfamiliar with details of ACA’s operation.
Seven people who used ACA’s weight-loss medication told The Post that it was generally effective, and they didn’t experience any harmful reactions. “I think they had a good product,” said Kara De la Pena, a nurse practitioner and founder of telehealth service NP2GO, adding that she lost 20 pounds on ACA’s semaglutide.
But inside ACA, not everyone was comfortable with filling such a large volume of prescriptions and the dosages ordered by some physicians.
“If you questioned the clinical appropriateness of anything, you were told, ‘Don’t worry about it,’” said Miranda Lane, a pharmacist who worked at ACA from February until resigning in May over what she described as a toxic culture.
For patients, the allure of compounded semaglutide is that they can obtain it much more cheaply than FDA-approved weight-loss drugs like Wegovy. ACA sold its highest dose of semaglutide, combined with vitamin B6, to health-care providers for $175 for a month’s dose, according to internal records. That’s just 13 percent of Wegovy’s list price, although providers typically would mark it up.
Ashley, Rx Partners’ CEO, said ACA’s raw ingredients were “lawfully purchased from a reputable drug manufacturer.”
“Rise and grind,” an ACA employee texted colleagues early on April 18.
“Woooo let’s do this,” responded Jocelyn Freimuth, the pharmacy director at the time. Freimuth did not respond to repeated requests for comment.
They had set out to fill 10,000 prescriptions that day — more than 10 times what they had recently been averaging — according to three former employees and screenshots of text messages.
“If we do 6700 scripts today that is literally the entire month of JAN 2023 at 1 million dollars,” Freimuth texted colleagues, apparently referring to the number of prescriptions ACA had shipped in January and the revenue it earned. “And if we do 10,000 that averages 1.5million in one day. Like what [the] actual heck,” she continued, adding, “we surely could do a business class presentation on this I would think at this point lol.”
ACA didn’t appear to reach the 10,000 goal that day. But between February and early June last year, an internal system used by ACA and one other pharmacy showed they completed more than 80,000 prescription orders. ACA accounted for the vast majority, according to two former employees familiar with the figures who said the orders were mostly weight-loss products.
To keep up with the flow of orders, ACA added staffers who weren’t always familiar with the job. One former employee said she had been working at a Wendy’s restaurant before she started as a technician at ACA — printing prescriptions, matching them with medications and verifying their accuracy. “Our first day, they threw us on prescriptions. Nobody really trained us,” the employee said.
It was clear to employees that ACA was making a lot of money, based on the figures displayed on the internal TV screens as well as monthly bonuses that they said were tied to financial performance. But not everything was running smoothly.
Muhammad Zafar, an internal medicine doctor in Illinois, emailed ACA in April to say that one patient had received a prescription from ACA that was written for someone else, while another patient’s medication was sent to the wrong person. Such mistakes hadn’t occurred with other pharmacies the practice used, according to Azam Zafar, the doctor’s son who manages his medical weight-loss business.
ACA had informed Muhammad Zafar earlier that month that it had received accreditation from the National Association of Boards of Pharmacy, emails show, which gave the Zafars confidence in its quality.
But the accreditation only lasted about three weeks, according to Kevin McGlynn, director of NABP’s accreditation and inspection programs. What’s more, the brief accreditation was specific to ACA’s prior location in downtown Nashville. ACA was never accredited at its latest location, which became its official address in February 2022, according to McGlynn and public records.
McGlynn declined to say why ACA’s accreditation ended, citing confidentiality obligations.
“Wow, that was not how it was portrayed to us,” said Azam Zafar when informed of this by The Post.
Christy Smith, 52, of Indiana, said she was satisfied with ACA’s tirzepatide initially. It wasn’t quite as effective as taking Mounjaro, Smith said, but “close enough to where I felt it was something I wanted to keep doing.” That changed by about the third or fourth month, she said, when her weight started going back up. She began wondering whether the dose was diluted, and said she found other patients with similar questions.
Ashley said ACA had “industry-standard protocols in place to ensure that each customer received the correct prescription, with the required dosage, and without any alleged dilution of the active ingredient.”
Then, on July 31, ACA told clients by email that it would be pausing shipments of sterile medications, saying it was trying to “pick up the pieces operationally” after the sudden death of a director.
What few outside ACA knew was that state health inspectors had arrived at ACA a week earlier, on July 24. The sterile-compounding director had left the previous month, and employees struggled to answer the inspectors’ questions, according to one employee who was there. One pharmacy technician who didn’t work in compounding walked into the sterile area of the lab, prompting questions from inspectors about whether she had followed proper protocols, this person said.
Brantley Wescott, Rx Partners’ chief operating officer, died by suicide three days later. Ashley said Wescott also oversaw ACA’s operations. He told police that Wescott had struggled with anxiety but he hadn’t known Wescott to be depressed. Ashley added that a recent pharmacy audit “was stressing [Wescott] out,” according to a police report.
Wescott “was a long-standing part of our community and his tragic death was a shock to all,” said Ashley, who is also Wescott’s cousin. “We are still in the process of understanding and grieving this terrible loss.”
On Aug. 3, the Tennessee Board of Pharmacy met to discuss immediately suspending ACA’s operations. ACA preemptively surrendered its sterile compounding registration, state records show.
Employees who expected ACA to resume compounding were stunned when the company laid them off in early October and said it would close.
A few days later, ACA broke the news in an email to customers, saying that “several interruptions has prevented us from operating at a high level of customer service.”
Lee Ann Keeling, a Texas doctor with a telehealth weight-loss practice who was one of ACA’s largest clients, was surprised. “As far as I knew, they were doing well. My patients loved their products,” she said. The disciplinary action, she said, “was a shock.”
Kate Harrison Belz in Chattanooga, Tenn., contributed to this report.
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