pharmacos face judicial resistance to claims against compounding pharmacies for weight loss drugs

Three cases showing aspects of the challenges, only one of which even partially survives:

Novo Nordisk, Inc. v. Brooksville Pharm. Inc., 785 F.Supp.3d 1123 (M.D. Fla. 2025)

Novo Nordisk sells FDA-approved drugs containing semaglutide, Wegovy, Ozempic, and Rybelsus. Brooksville is a pharmacy that sells compounded drugs containing semaglutide.

Under Section 503A of the FDCA, a pharmacist may not compound “any drug products that are essentially copies of a commercially available drug product.” But an exemption allows compounded drugs “for an identified individual patient based on the receipt of a valid prescription order or a notation, approved by the prescribing practitioner, on the prescription order that a compounded product is necessary for the identified patient.” And it also allows compounding when drugs are on the FDA’s drug shortage list, which was true of Ozempic and Wegovy from approximately March 31, 2022, until February 21, 2025. Brooksville was thus permitted to compound “essentially copies” of Ozempic and Wegovy without a patient-specific prescription, and “outsourcing facilities” were allowed to compound the active pharmaceutical ingredients.

With the drugs off the shortage list, Brooksville claims it will now revert to the FDCA’s traditional compounding standard and “only sell compounded drugs containing semaglutide pursuant to individualized prescriptions calling for a custom compound that is materially different from Novo’s FDA-approved drugs.”

Novo Nordisk alleged that Brooksville was manufacturing and selling adulterated and misbranded drugs in violation of the Florida Drug and Cosmetic Act. Novo Nordisk acquired samples of Brooksville’s compounded semaglutide in 2023 and 2024; its tests in Norway showed that Brooksville’s samples had potency in the 81-87% range of labeled potency, while third party testing of the 2024 samples showed a potency of 92.9% and 95.8%. The level of impurities in Brooksville’s compounded semaglutide was mostly within Novo Nordisk’s own drug product specifications.

Unlike Novo Nordisk, compounders such as Brooksville are not required to report adverse events to the FDA. Novo Nordisk alleged that the impurities in Brooksville compounded semaglutide pose immunogenicity risks, but there are no reports of injury due to impurities in Brooksville’s compounded semaglutide in the record. Five Brooksville customers complained that their prescriptions were ineffective.

Novo Nordisk sought injunctive relief under FDUTPA for violations of a “statute ... which proscribes unfair methods of competition, or unfair, deceptive, or unconscionable acts or practices,” here the Florida DCA’s prohibition on selling adulterated and misbranded drugs.

Article III standing: injury-in-fact was present because each sale of compounded semaglutide was likely a sale taken from Novo Nordisk, even if some of Brooksville’s 24,000 customers might choose another compounder over Novo Nordisk and even if Brooksville was right that at least 50% of customers cannot afford Novo Nordisk’s branded version. But was the claim moot and unredressable? Now that the shortage for Ozempic and Wegovy is over, compounding is only allowed where “a change [is] made for an identified individual patient, which produces for that patient a significant difference, as determined by the prescribing practitioner, between the compounded drug and the comparable commercially available drug product.”

Novo responded that, “because Brooksville intends to continue compounding semaglutide products [via individualized patient prescriptions], Novo continues to have claims that such conduct is unlawful because those products are adulterated and misbranded.” Moreover, because Brooksville was compounding in bulk prior to the FDA’s declaration of a shortage for Ozempic and Wegovy, Novo speculated that “there is nothing stopping [Brooksville] from making that same unilateral judgment in the future,” so the Court should “doubt that Brooksville will engage in any cessation of its current activities.”

“There are circumstances where a defendant’s voluntary cessation of challenged conduct may moot a case after all, but the standard for that is ‘stringent’: A defendant’s voluntary conduct may moot a case only if ‘subsequent events made it absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.’ ”

Despite not finding the record entirely clear, the court reasoned that “the patient-specific semaglutide that Brooksville compounds post-shortage would presumably be ‘materially different’ from the semaglutide it was compounding during the shortage.” Plus, Brooksville’s decision to cease compounding copies was not necessarily a “voluntary” cessation since it was legally required to do so. “Brooksville continued to litigate this suit from its inception all the way to summary judgment, and only raised a voluntary cessation argument after a change in the FDA’s shortage list during the pendency of the litigation.” Thus, the allegedly wrongful behavior (i.e., compounding misbranded and adulterated semaglutide in bulk) could not reasonably be expected to reoccur. The court could longer provide “meaningful relief” to Novo because the case was moot.

Also, Novo sought an impermissible “obey-the-law” injunction with a prohibition on selling a “drug ... that is adulterated [and] misbranded.” “While the Florida DCA defines what counts as an adulterated and misbranded drug, these definitions are incredibly vague and wholly lack any specificity to put Brooksville on notice of what specific conduct would be enjoined”:

For example, what impurities with amino acid additions and deletions in Brooksville’s compounded semaglutide would count as “contaminated” or “injurious to health?” Who would test the “purity” and “quality” of Brooksville’s semaglutide to determine if it fell below a certain standard? What labeling counts as “false or misleading” when each semaglutide prescription compounded is discrete and patient-specific post-shortage?

This couldn’t be defined within the four corners of an injunction. And to do so would be to allow private enforcement of the Florida DCA, even though there’s an explicit commitment of enforcement authority to the state.

Even without mootness, the claim was impliedly preempted by the FDCA. To “escape implied preemption,” the alleged conduct must “give rise to liability under state law even if the Act did not exist.” A claim that “relies on a state statute which itself relies on the federal statute, not traditional state tort law theory,” “exist[s] solely by virtue of the FDCA ... requirements.” An FDCA-related FDUTPA claim has to fit through a “narrow gap”: “a plaintiff has to sue for conduct that violates a federal requirement (avoiding express preemption) but cannot sue only because the conduct violated that federal requirement (avoiding implied preemption).” Novo did not squeeze through that gap. The FDUTPA claim was based on “unlawfulness,” that is, predicate violations of the Florida DCA, whose express goal was conformity and uniformity with the FDCA. This wasn’t a “traditional state tort law” claim which “predate[s] the federal enactments in question[.]” (A deception-based claim, by contrast, wouldn’t exist just because of the violation of the FDCA.)

Finally, the FDUTPA claim failed on the merits. Under FDUTPA, a plaintiff must prove “(1) a deceptive act or unfair practice; (2) causation; and (3) actual damages.” Plaintiffs need not be consumers, but “Florida case law requires a plaintiff to prove harm to a consumer or consumers.” Actual patient harm was the proper standard at the summary judgment stage, and it wasn’t in the record.

Novo argued that, since compounders like Brooksville are not required to report adverse events to the FDA, Novo should not have a burden to show actual consumer injury. “But most defendants in a FDUTPA lawsuit are not sending adverse event reports to a state or federal agency. That’s why parties in a lawsuit conduct discovery. Plaintiff’s hypothetical possibility of some future injury to Florida consumers based on impurities in compounded semaglutide (which could be materially different given that Brooksville is only providing patient-specific prescriptions post-shortage) is insufficient to survive summary judgment.”

As for deception, the allegation was that Brooksville deceived consumers by selling compounded semaglutide with a potency less than what is reported on the label. But, while five (out of 24,000) Brooksville customers reported that their semaglutide perceptions were “ineffective,” Novo didn’t test the potency of the compounded semaglutide these customers received. Without evidence of consumer harm, Novo was entitled to summary judgment. (The harm from deception can also be from paying too much for what the compound was worth, but the court doesn’t seem interested in that or the fact that deception-based claims should escape preemption.)

Eli Lilly & Co. v. Adonis Health, Inc., 2025 WL 2721684, No. 25-cv-03536-JST (N.D. Cal. Sept. 24, 2025)

Lilly sells Mounjaro and Zepbound, which are FDA-approved drugs for the treatment of diabetes, weight management and sleep apnea. Defendant Henry is a telehealth platform that markets compounded versions of FDA-approved medications. Lilly alleged that Henry markets and sells compounded versions of Lilly’s drugs and misrepresents that these drugs are as safe and effective as Lilly’s products. Henry also allegedly advertises its medications as being “patient-specific,” but instead “sells the same mass-produced, compounded tirzepatide products for all patients.” Lilly also alleged that the lack of efficacy of Henry’s untested compounded tirzepatide medications causes harm to Lilly’s goodwill in the marketplace.

Lilly brought federal and California false advertising claims against Henry.

Statutory standing: Henry argued that it didn’t compete with Lilly because Henry is not a drug manufacturer but a “telehealth platform” that “provides medical practice management and services to independent licensed healthcare providers” who can “in turn assess, diagnose and treat patients, which may include prescribing medications like compounded tirzepatide.” The court disagreed. Henry’s “competition with” Lilly was “reflected in [Henry’s] advertising itself, which draws direct comparisons between” Lilly’s FDA-approved tirzepatide medications and Henry’s compounded tirzepatide products. The parties were direct competitors in the market for tirzepatide products because both Henry and Lilly market and sell tirzepatide-containing drugs to the same potential customers. In addition, Lilly plausibly alleged financial harm. Also, even if the market has numerous competing weight loss products, Lilly alleged that Henry competes in the market for tirzepatide-containing medications used for weight loss, a significantly narrower segment of the market.

Henry argues that the fact that both the FDA-approved and compounded versions of the medications require a prescription “breaks any chain of proximate cause” because “[i]t is ultimately the provider’s decision to prescribe an appropriate medication for a particular patient.” But courts have routinely found that Lanham Act claims can be maintained for prescription drugs. For similar reasons, Lilly had standing to bring state law claims.

Lilly alleged two broad types of false statements in its complaint: (1) that Henry falsely claims that its medications are “safe and effective” even though “no clinical trials demonstrate that compounded tirzepatide—in any form—is safe, effective, or even approved for human use,” and (2) that Henry “deceives consumers by touting its products as ‘patient-specific medication[s]’ ” when “[i]n reality, Henry does not sell ‘patient-specific’ tirzepatide at all, but rather sells the same mass-produced, compounded tirzepatide products for all patients.”

Applying the heightened pleading standards for fraud under Rule 9(b), “a plaintiff may not sustain false advertising claims based solely on ‘lack of substantiation’ grounds.” The court found that claims under theory (1) were impermissible for that reason. [I’d have been inclined to say that statements about prescription drugs are likely to be establishment claims, even implicitly, such that Lilly could disprove them by showing that they weren’t proven as long as Lilly also was able to show that they were establishment claims, e.g. with evidence of consumer perception.]

However, Lilly’s personalization-based claims survived. Lilly alleged that these false statements lure patients away from FDA-approved tirzepatide products because patients could believe that they will receive “patient-specific” weight-loss medications from Henry. Henry argued that, because it adheres to FDA’s compounding requirements, Lilly’s claims were preempted. I

Lilly adequately alleged falsity of “individualized treatments,” “Tailored Treatments,” and “patient-specific” medications that “meet[ ] each patient’s unique needs,” by alleging that Henry in fact offers a “standard treatment plan [where] each patient will receive the same pre-made dosage of tirzepatide, over the same amount of time, regardless of any patient’s individualized circumstances.”

Henry’s alleged compliance with the FDCA was immaterial to whether the advertising of “patient-specific” “tailored” or “individualized treatment” is false. As understood by “any linguistically competent person,” the statements indicated Henry specifically creates individualized medication plans for each patient, and thus Lilly plausibly alleged literal falsity.

Nor was there preemption. Even if the FDCA didn’t exist, it was perfectly possible to evaluate the truth or falsity of “tailor-made” or “individualized treatments” when the treatment is in fact standardized. And anyway, even if the FDCA preempted Lilly’s state UCL and FAL claims as to personalization statements, the Lanham Act claims would still survive.

Eli Lilly & Co. v. Willow Health Services, Inc., 2025 WL 2631620, No. 2:25-cv-03570-AB-MAR (C.D. Cal. Aug. 29, 2025)

Defendant Willow is a “technology platform to connect registered users of [its] Website with Physicians and pharmacies for medical consultations and dispensing of medications prescribed by the Physicians.” It sells compounded medications, which incorporate tirzepatide, also the active ingredient in Mounjaro and Zepbound. Lilly alleged that its tirzepatide medicines are tested and approved only for under-the-skin injections (not for administration in any oral form), to treat serious diseases, such as type 2 diabetes and chronic weight management issues in obese adults and overweight adults with at least one weight-related condition (not for cosmetic weight loss), and without additives, such as vitamins.

By contrast, Willow’s compound tirzepatide drugs are allegedly in “oral form,” mixed with “additives,” and are marketed for “cosmetic weight loss,” even though no clinical trial has studied tirzepatide for cosmetic weight loss, for safety and efficacy of oral use, or for the effect of additives. In addition, Lilly alleged that Willow’s claim of “personalized” drugs was false because its drugs were “standardized compound tirzepatide drugs in predetermined dosages.” Finally, Willow allegedly falsely claimed that the compounding pharmacies it works with “pass rigorous evaluations and are subject to the same high standards,” but Willow allegedly sourced its drugs from compounding pharmacies who have “serial records of regulatory violations.” Lilly brought California state and federal false advertising claims.

Willow argued that it wasn’t a direct competitor because it sold a different product (oral, and with additives) for a different condition (cosmetic weight loss), which Lilly didn’t.  Nonetheless, competition with Lilly was “reflected in [Defendant’s] advertising itself,” which “draws direct comparisons” between both tirzepatide products. Again, the parties “vie for the same dollars from the same consumer group”—consumers with diabetes or obesity who want to lose weight.

Nonetheless, Lily failed to plead a single lost sale or a single instance where a consumer decided to select a compounded tirzepatide provided by Willow instead of Lilly’s products because of any allegedly false ads. It was not enough to allege that Willow’s ads might make consumers “conclude that any tirzepatide is ineffective,” or “may even draw unwarranted conclusions about the safety and effectiveness of [Plaintiff’s] FDA-approved tirzepatide medicines,” or to allege that the advertisements may “steer patients away from [Plaintiff’s] tested, proven medicines.” There was no plausible “chain of inferences” showing how Willow’s advertisements could harm Lilly’s business. “Even if Plaintiff did not have data about lost sales, Plaintiff could have presented testimony or survey evidence that indicated consumers may be swayed one way or another to Defendant’s product. Instead, Plaintiff only provides conclusory allegations.”

Thus, Lilly failed to sufficiently allege a commercial injury under the Lanham Act. It also failed to allege proximate cause, which ordinarily requires “economic or reputational injury flowing directly from the deception wrought by the defendant’s advertising; and that that occurs when deception of consumers causes them to withhold trade from the plaintiff.” Proximate causation may be adequately alleged when “there is likely to be something very close to a 1:1 relationship between” a plaintiff’s lost sales and the sales diverted to a defendant. Here, though, “regardless of what an advertisement says or what a consumer wants to buy, obtaining a prescription medication requires a physician to prescribe it. A physician prescribing a compounded medication is the proximate cause of a consumer/patient using compounded medication instead of Plaintiff’s medication.” Thus, Willow’s ads were not what “causes [consumers] to withhold trade from the plaintiff.” [I don’t think this accurately reflects the reality of what doctors—especially doctors accessed through Willow’s site—do these days.]

This Lanham Act standing analysis also applied in similar fashion to the California claims, which require lost money or property.

As to the merits, on the safety/effectiveness claims, these were mere lack of substantiation claims and not actionable by private parties. Lilly responded that it was challenging Willow’s claim that its products were clinically proven to cause and maintain weight loss, because the products themselves have not undergone any clinical testing at all. But Willow wasn’t alleged to have advertised that its products were clinically tested, only that Tirzepatide was. [This is the kind of implication that really should be actionable; Lilly can surely afford a consumer survey, even if it shouldn’t have had to do so before a motion to dismiss.]

Personalization: Unlike the previous case, the court here considered that a properly compounded drug, manufactured for “an identified individual patient based on the receipt of a valid prescription order or a notation, approved by the prescribing practitioner, on the prescription order that a compounded product is necessary for the identified patient,” was personalized by definition. “Personalization does not mean that every compounded medication must be different for every patient; it, instead, need only be tailored to the specific goals of the patient.” Thus, the claim that compounded tirzepatide “is a custom-prepared version of the drug, mixed specifically for a patient by a compounding pharmacy” was true.

Compliance: The court found the statement that Willow “partner[s] with leading compounding pharmacies that pass rigorous evaluations” was non-actionable puffery and opinion. The claim didn’t identify any specific type of testing or evaluation.