The recent ruling by Judge Mark T. Pittman of the U.S. District Court for the Northern District of Texas, which granted summary judgment in favor of FDA and Eli Lilly, has significant implications for the GLP-1 compounding industry. Judge Pittman’s decision upheld the FDA’s determination that there was no longer a shortage for tirzepatide, effectively barring compounders from producing products in a manner that are considered to be “essentially copies” of the commercially available versions of the medications. This ruling not only reinforces FDA’s authority but also establishes a precedent that could lead to more litigation against tirzepatide compounders. However, as detailed below, this decision is being appealed to the Fifth Circuit Court of Appeals. 

The case arose from a challenge by the Plaintiffs, the Outsourcing Facilities Association (OFA) and FarmaKeio Custom Compounding, which argued that FDA’s decision to remove tirzepatide from the drug shortage list was arbitrary and capricious and that public comments should have been solicited prior to this action. However, the court held in favor of the Defendants in the case, the FDA and Eli Lilly, and concluded that the FDA acted lawfully in its assessment. Very soon after the court’s ruling, the OFA filed a Notice of Appeal with the Fifth Circuit which is now pending.

The District Court’s ruling is pivotal as it clarifies the legal landscape regarding compounded medications, particularly for drugs that are commercially available. As a result, compounders can no longer produce tirzepatide in a manner that is considered to be “essentially a copy.” Compounders must therefore navigate a complex regulatory environment governed by Sections 503A and 503B of the FDCA. For 503A pharmacies, compliance with patient-specific prescription requirements is essential, and compounding cannot occur if a drug is commercially available unless a prescriber certifies a clinical difference. The legal ramifications of failing to comply with these regulations could be severe and all compounders must ensure a complete understanding of the legal framework governing this marketplace.

Prior to Judge Pittman’s decision, Eli Lilly had already intensified its legal strategy, focusing on deceptive marketing and formulation modifications, particularly targeting telehealth and digital health platforms. This shift represents a significant evolution in how pharmaceutical companies are addressing the compounded drug market. The new focus on deceptive marketing practices and formulation modifications—where telehealth companies are accused of altering compounded products to evade legal scrutiny—could expose these businesses to legal risks that were previously less pronounced. For instance, if a telemedicine company adds vitamins or amino acids to a compounded version of tirzepatide, claiming it enhances efficacy, it may face allegations of violating federal law and misleading patients.

The implications of this ruling are considerable and may result in a surge of litigation against compounders producing tirzepatide products. We anticipate that Eli Lilly will continue to escalate its litigation efforts following the court’s ruling. Consequently, all entities involved in compounding tirzepatide, including 503A pharmacies, should be prepared for increased legal scrutiny.

Conclusion

Judge Pittman’s ruling not only solidifies the FDA’s authority over drug shortages but also signals a potential increase in litigation against compounders. As pharmaceutical companies like Eli Lilly intensify legal efforts and actions, compounders must be ready to navigate a more hostile legal landscape. This situation underscores the importance of regulatory compliance and legally compliant and ethical marketing practices in the compounding industry. Stakeholders must adapt to the evolving legal environment to mitigate risks.

We work with pharmacies, prescribers, and digital health companies (among other stakeholders) across the country to navigate GLP-1 regulatory issues, respond to cease and desist letters, and proactively audit compounding and marketing practices. We are fully prepared to defend stakeholders on all aspects of litigation, in federal and state court, or other related proceedings including with federal and state agencies (e.g., state boards of pharmacy).