Highlights:
– Eli Lilly's lawsuits against telehealth companies reveal the complex interplay between drug shortages, compounding regulations, and patent protection, underscoring the need for stricter oversight in the telehealth industry to ensure patient safety and regulatory compliance.
– The legal actions by Eli Lilly shed light on the evolving landscape of pharmaceutical patent enforcement and telehealth regulation, highlighting the crucial tension between maintaining innovation protection, drug safety, and patient accessibility in an increasingly digital healthcare era.
– The FDA's cautionary warning about the risks associated with obtaining compounded drugs through online or telehealth platforms emphasizes the importance of verifying pharmacy credentials and adherence to regulatory standards, bringing attention to the need for consumer awareness and vigilance in medication procurement.
Summary
Eli Lilly’s 2023 lawsuits against four telehealth companies—Mochi Health, Fella Health, Willow Health, and Henry Meds—center on allegations that these firms illegally produced and sold compounded versions of the company’s patented GLP-1 receptor agonist drugs, Mounjaro and Zepbound. These medications, approved in 2022 and 2023 respectively, are used to treat diabetes and obesity and quickly became high-demand treatments, leading to temporary shortages that allowed compounding pharmacies to legally produce limited alternatives. However, Eli Lilly contends that the telehealth companies exploited these allowances by mass-producing and marketing “untested, unapproved” compounded formulations, often incorporating additives and promoting cheaper knockoffs that circumvent federal regulations and mislead consumers.
The legal action highlights significant regulatory and safety concerns regarding the rise of telehealth-facilitated compounding and distribution of prescription drugs. While the FDA initially permitted compounded versions during drug shortages, it removed Mounjaro and Zepbound from its shortage list in early 2024, reinstating restrictions on mass compounding. Despite this, some compounders continued producing modified tirzepatide products, prompting Eli Lilly to pursue litigation to protect its intellectual property and patient safety. The lawsuits raise issues of trademark infringement, false advertising, unfair competition, and alleged violations of medical practice laws.
This dispute unfolds against a complex regulatory backdrop involving ongoing negotiations between the FDA and compounding pharmacy trade groups, as well as evolving telemedicine prescribing rules overseen by federal agencies like the DEA. A U.S. District Court ruling temporarily allowed some compounded tirzepatide sales to continue during these discussions, illustrating the tension between ensuring patient access to medications and enforcing drug quality and safety standards. The FDA has warned consumers about risks associated with compounded drugs obtained via online or telehealth platforms, emphasizing the importance of verifying pharmacy credentials and regulatory compliance.
Eli Lilly’s lawsuits mark a pivotal moment in pharmaceutical patent enforcement and telehealth regulation, testing the limits of compounded drug production in the rapidly growing market for GLP-1 treatments. The outcomes may shape future policies balancing innovation protection, drug safety, and patient access in an increasingly digital healthcare environment.
Background
Eli Lilly’s lawsuit against four telehealth companies—Mochi Health, Fella Health, Willow Health, and Henry Meds—stems from the rising popularity and subsequent shortages of its GLP-1 medications Mounjaro and Zepbound, used respectively for diabetes and obesity treatment. Mounjaro was approved in May 2022 and quickly surged in demand, leading the FDA to declare certain doses in shortage by the end of that year. Similarly, Zepbound received approval in November 2023, with some doses also becoming scarce within months of its release.
During periods of official drug shortages, compounding pharmacies are legally permitted to produce compounded versions—custom-mixed or duplicated copies—of the affected medications to meet patient needs. This practice escalated dramatically with the rise of GLP-1 drugs, which were not widely compounded with additives prior to these shortages. Some telehealth companies began offering compounded tirzepatide vials at substantially lower prices, sometimes under $100, compared to the brand-name medications. These products were often shipped quickly after patients completed brief online assessments.
Eli Lilly alleges that these telehealth companies switched dosages and prescriptions en masse based on corporate interests rather than medical decisions and deceptively marketed “untested, unapproved drugs,” misleading consumers away from Lilly’s authorized medications. Despite an FDA declaration in early 2024 that the shortages had resolved and that mass compounding restrictions were reinstated, some pharmacies and telehealth providers continued producing compounded versions, potentially exploiting regulatory gaps by making slight alterations to the drugs to evade FDA enforcement.
The issue has broader regulatory and safety implications. The FDA cautions that compounding under insanitary conditions poses significant patient risks, and encourages consumers to thoroughly research online pharmacies and telehealth services, especially those marketing compounded drugs. Moreover, telemedicine prescribing rules and the establishment of national prescription drug monitoring programs aim to balance patient access to needed medications with preventing abuse and diversion into illegal markets. This complex backdrop underscores Eli Lilly’s legal efforts to protect its patented drugs and ensure patient safety amid a rapidly evolving telehealth and compounding landscape.
Legal Action
In a series of lawsuits filed in 2023, pharmaceutical giant Eli Lilly targeted four telehealth companies—Mochi Health, Fella & Delilah Health, Willow Health, and Henry Meds—alleging that these companies were selling illegal, compounded knockoffs of its patented GLP-1 drugs, Mounjaro and Zepbound, used to treat diabetes and obesity. The lawsuits assert that the telehealth firms deceptively marketed these compounded drugs as “custom-prepared” for patients, despite the products being mass-produced and, in some cases, containing untested added ingredients such as vitamins and amino acids to differentiate them from Lilly’s brand-name medications.
Eli Lilly’s legal claims include allegations of trademark infringement, false claims, unfair competition, and the corporate practice of medicine, accusing some defendants of exerting control over affiliated medical groups without physician ownership, which is prohibited. The company also contends that these telehealth sites mislead consumers by promoting unapproved formulations, including oral droplet and compounded tirzepatide variants with added substances like niacinamide that have not undergone clinical testing.
The lawsuits follow the Food and Drug Administration’s (FDA) removal of Mounjaro and Zepbound from its drug shortage list, which reinstated restrictions on mass production of compounded versions of these drugs by pharmacies and outsourcing facilities. While the FDA’s decision signaled that branded drug availability met national demand, some compounding pharmacies continued producing modified versions of tirzepatide, attempting to circumvent the ban by altering dosages or combining the drugs with other ingredients. As a result, a U.S. District Court ruling temporarily allowed certain compounded tirzepatide makers to continue sales while negotiations between the FDA and compounding trade groups proceed.
Eli Lilly’s lawsuits represent a concerted effort to curb the growing telehealth and compounding pharmacy industry’s production and sale of cheaper, off-brand versions of its high-demand medications amid ongoing legal battles against multiple companies involved in compounding GLP-1 drugs. These cases will test the company’s ability to enforce its patents and regulatory protections now that the FDA no longer classifies Mounjaro and Zepbound as in shortage. Meanwhile, the FDA has cautioned consumers about the risks of obtaining compounded drugs through online pharmacies or telehealth platforms, emphasizing concerns over drug quality, safety, and regulatory compliance.
Regulatory and Legal Framework
The legal and regulatory landscape surrounding compounded versions of tirzepatide, the active ingredient in Eli Lilly’s branded drugs Zepbound and Mounjaro, is complex and evolving. The Food and Drug Administration (FDA) plays a central role in overseeing the production and availability of these drugs, particularly in relation to drug shortages and the legality of compounded alternatives. In early 2023, the FDA officially declared that the national demand for tirzepatide products could be met by existing manufacturers, thereby reinstating legal restrictions on the mass production of compounded copycats by pharmacies and outsourcing facilities.
Following the FDA’s announcement, many compounding pharmacies and outsourcing facilities were expected to cease large-scale production of tirzepatide copies. However, some continued to produce versions with altered dosages or combined with additional ingredients like vitamins, potentially exploiting regulatory loopholes to evade the FDA’s ban. This practice has raised significant concerns regarding the safety, efficacy, and truthful marketing of such compounded products, as compounded drugs produced under unsanitary conditions or without adequate regulatory oversight can put patients at risk.
Eli Lilly has taken aggressive legal action against entities involved in manufacturing and selling these compounded tirzepatide versions. The company filed lawsuits targeting several telehealth companies and compounding pharmacies, including Strive Pharmacy LLC, Empower Clinic Services LLC, and telehealth brands such as Mochi Health, Fella & Delilah Health, Willow Health, and Henry Meds. These lawsuits allege false marketing and illegal distribution of unapproved knockoffs, some of which contain untested added ingredients intended to differentiate them from the brand-name drugs.
The FDA and the Outsourcing Facilities Association (OFA), a trade group representing compounders, have engaged in ongoing negotiations. The OFA challenged the FDA’s declaration in court, arguing that the agency’s determination of no shortage contradicted evidence of continued supply chain issues. In a notable ruling, a U.S. District Court permitted certain compounders to temporarily continue selling their tirzepatide versions while discussions persist between stakeholders.
In addition to FDA oversight, federal regulations govern telehealth prescribing practices, especially for controlled substances. The Drug Enforcement Administration (DEA), in coordination with the Department of Health and Human Services (HHS), has implemented telemedicine flexibilities that allow authorized providers to prescribe controlled medications remotely under specific conditions. These measures aim to balance patient access with safeguards against medication diversion and abuse.
Despite these regulatory frameworks, consumers face challenges when purchasing compounded drugs online or through telehealth platforms. They may lack transparency regarding the origin, quality, and licensing of the compounders producing these medications. The FDA encourages consumers to research online pharmacies and consult healthcare providers to mitigate risks associated with compounded drug use.
Context and Significance
The lawsuits filed by Eli Lilly against four telehealth companies—Mochi Health, Fella Health, Willow Health, and Henry Meds—occur amid a growing dispute over compounded versions of the pharmaceutical giant’s drugs Zepbound and Mounjaro, which are used for weight loss and diabetes treatment respectively. These medications, categorized as GLP-1 receptor agonists, have experienced unprecedented demand that initially led to manufacturing shortages and opened a market for compounded alternatives produced by telehealth firms and compounding pharmacies.
Compounded drugs are customized formulations often created for patients who cannot tolerate standard FDA-approved medications due to allergies or dosage form preferences. However, the mass production and sale of compounded versions of existing branded drugs, particularly those combining additives or altering dosages, have only recently become widespread, largely driven by the demand for GLP-1 medicines. This practice has raised regulatory and safety concerns because compounded drugs may not always meet the rigorous quality and licensing standards imposed on commercial pharmaceuticals.
Eli Lilly’s lawsuits highlight the company’s position that these telehealth companies are not providing truly personalized medicines but are instead mass-marketing slightly modified copies of its FDA-approved drugs to circumvent federal regulations. The company alleges that such practices mislead consumers by promoting untested and unapproved drugs and divert patients away from proven treatments. Additionally, Eli Lilly contends that some of these companies have engaged in inappropriate medical practices, including frequent switching of dosages without clinical justification, driven by corporate interests rather than medical decisions.
The legal actions mark a significant test of the pharmaceutical industry’s ability to enforce intellectual property and regulatory protections against emerging telehealth and compounding sectors that offer alternative drug formulations. They also underscore ongoing tensions between ensuring patient access to personalized medications and maintaining drug safety, efficacy, and quality standards as regulated by the FDA. The outcome of these lawsuits may influence how compounded medications are regulated and the future role of telehealth companies in dispensing complex pharmaceutical treatments.
Litigation Timeline and Current Status
Eli Lilly and Company initiated lawsuits against several telehealth-related entities, including Strive Pharmacy LLC and Empower Clinic Services LLC, marking the company’s first legal challenge against compounding pharmacies selling compounded versions of its drugs Zepbound and Mounjaro after these drugs were removed from the FDA’s shortage list. This legal action aims to protect Lilly’s market exclusivity and address the unauthorized production and sale of compounded tirzepatide, the active ingredient in these medications.
In response, a significant development occurred when the U.S. District Court for the Northern District of Texas issued a ruling permitting compounders to temporarily continue selling their versions of tirzepatide. This decision allows compounded versions to remain on the market while negotiations between the FDA and a coalition of compounders, led by the Outsourcing Facilities Association, proceed.
The FDA has actively defended its position against preliminary injunction requests by relying on confidential data supplied by Lilly, asserting that Lilly’s current supply of Mounjaro and Zepbound exceeds demand and is projected to continue meeting or surpassing future demand across all product strengths. This data-driven stance by the FDA is expected to significantly undermine the plaintiffs’ case, although legal battles are anticipated to persist for some time.
Aftermath and Future Considerations
Following Eli Lilly’s lawsuit against four telehealth companies—Fella, Willow, Henry Meds, and Mochi Health—alleging the unauthorized sale of compounded versions of its diabetes drugs Zepbound and Mounjaro, several legal and regulatory developments have unfolded. A notable ruling by the U.S. District Court for the Northern District of Texas temporarily permits the continued sale of compounded tirzepatide formulations by these manufacturers while negotiations between the FDA and compounders, led by the Outsourcing Facilities Association, remain ongoing. This decision underscores the complex balance between addressing drug shortages and enforcing federal regulations governing drug manufacturing and compounding.
The FDA maintains concerns regarding the quality and safety of compounded drugs sold through online pharmacies and telehealth platforms. Consumers often lack clear information about the identity and regulatory compliance of compounders, raising potential risks related to product safety and efficacy. The agency emphasizes the need for truthful and non-misleading promotion of compounded drugs, alongside adherence to sanitary conditions during drug preparation to prevent widespread patient harm.
From a regulatory perspective, federal authorities, including the Drug Enforcement Administration (DEA), are attempting to expand telehealth access to necessary medications while ensuring patient safety and preventing drug diversion into illicit markets. DEA Administrator Anne Milgram has highlighted the agency’s commitment to easing access burdens for patients who face challenges visiting providers in person, simultaneously implementing safeguards to maintain control over medication distribution.
Eli Lilly’s claims further allege that some telehealth companies are marketing unstudied formulations, such as oral tablets and drops, which could circumvent FDA oversight and compromise patient safety. These practices raise concerns about the legitimacy of “personalized” drug options being offered and the potential for mass-marketing strategies that exploit regulatory gaps.
Looking ahead, the ongoing negotiations between the FDA and compounding stakeholders, combined with court rulings, will shape the regulatory landscape governing compounded drugs, particularly those accessed via telehealth platforms. Policymakers and industry participants are expected to refine federal legislation and enforcement policies related to telehealth and drug compounding to better protect public health without unduly restricting access to essential medications. Additionally, enhanced collaboration among healthcare providers, pharmaceutical manufacturers, and regulatory agencies—supported by secure data-sharing practices compliant with HIPAA—may improve pharmacovigilance efforts and drug safety monitoring.
The content is provided by Harper Eastwood, Scopewires
