Eli Lilly's Legal Action Against Copycat Weight-Loss Drug Producers

Eli Lilly's Cease-and-Desist Orders

Pharmaceutical giant Eli Lilly has issued a series of cease-and-desist orders against compounding pharmacies, telehealth firms, and medical spas that manufacture and distribute "compounded" forms of tirzepatide. This is the active ingredient in Lilly's diabetes medication Mounjaro and the highly effective weight-loss drug Zepbound.

Tirzepatide's Shortage and Removal from the FDA's List

In December 2022, Tirzepatide was added to the Food and Drug Administration's (FDA) shortage list. This status enabled pharmacists, doctors, and licensed outsourcing facilities to create and distribute Zepbound replicas during the GLP-1 craze that swept the United States. However, it was taken off the list just last Wednesday. According to Bloomberg, Lilly began issuing cease-and-desist letters to telehealth companies and medical spas on Thursday. An excerpt from one of these letters read: "Because Lilly's FDA-approved medicines are available, you must immediately cease any production, sale, dispensing and marketing" of compounded copies.

The Impact on Compounding Pharmacies

Fierce Pharma estimates that up to two million Americans have been using "copycat versions of Eli Lilly and Novo Nordisk's incretin hormone drugs. This has led to a sudden boom in the compounding pharmacy industry, which has been instrumental in meeting the soaring demand for these products." When the FDA removed Lilly's tirzepatide from the shortage list, the Outsourcing Facilities Association (OFA), a compounding industry group, filed a lawsuit against the federal agency.

The OFA's Lawsuit Against the FDA

The OFA has filed a lawsuit in the US District Court in Fort Worth, Texas, alleging that the FDA's decision was unlawful and should be immediately revoked. The OFA is also seeking a temporary order to prevent the FDA from taking action against its members for producing compounded versions of tirzepatide until the lawsuit is resolved. The lawsuit criticizes the FDA for not seeking public input on the decision and for accepting Lilly's assurance that it can meet product demand. The OFA accuses Lilly of seeking to monopolize the market. Lee Rosebush, the OFA's chairman, stated in a release that the FDA's decision would have significant implications for patients, physicians, and outsourcing facilities that had made substantial investments to meet patient demand in light of product shortages and delays.

The Future of GLP-1s

The Goldman's index, which tracks companies with high exposure to GLP-1s, shows that momentum in these stocks has largely stalled throughout 2024. Companies threatened by the success of GLP-1s have been recouping their losses. There is growing evidence that GLP-1s like tirzepatide are highly effective treatments for obesity and diabetes. The key question for Wall Street is whether pharmaceutical companies can keep up with demand following the FDA's recent actions.

Bottom Line

This situation raises several important questions about the pharmaceutical industry and the role of regulatory bodies like the FDA. It also highlights the ongoing tension between the need for affordable, accessible medication and the rights of pharmaceutical companies to protect their products. What are your thoughts on this issue? Feel free to share this article with your friends to get their opinions. Remember, you can sign up for the Daily Briefing, which is delivered every day at 6pm.