allegedly false claims for compounded weight loss drugs didn't plausibly threaten Eli Lilly's reputation

Eli Lilly & Co. v. Mochi Health Corp., 2025 WL 2998166, No. 25-cv-03534-JSC (N.D. Cal. Oct. 24, 2025)

Another of the cases in which Eli Lilly’s attempts to protect its GLP-antagonist market do surprisingly badly, once again highlighting the higher standards imposed on false advertising plaintiffs compared to trademark plaintiffs. Lilly sued defendants, alleging a scheme to mislead consumers into purchasing compounded versions of Lilly’s FDA-approved medications, Mounjaro and Zepbound, under California state and federal false advertising law. Defendants compound tirzepatide, which is the key ingredient in Lilly’s drugs.

Mochi allegedly changed the dosages for all its customers without consulting them or receiving a clinical indication from a physician, in violation of California’s prohibition on the corporate practice of medicine. In addition, Lilly alleged that Mochi also included “additives” such as niacinamide and pyridoxine, without patient consent or a clinical indication. Lilly points to a complaint posted by a Mochi customer on the Better Business Bureau’s website, indicating their dissatisfaction with the unilateral decision to add niacinamide to the compounded medication; the complaint said that the customer had broken out in a rash, which a dermatologist opined was caused by the niacinamide. Mochi released statements in response to customer queries, claiming that the additives were “not clinically significant” and changes were dependent on the pharmacy used to fill the prescription. Lilly alleged that this again violated the prohibition on the corporate practice of medicine.

As for false advertising, Mochi allegedly misrepresented the source of its products by claiming that it is a generic of Lilly’s Mounjaro and Zepbound; misrepresented its compounded tirzepatide medications as safe and effective based on studies conducted of Lilly’s products; falsely claimed that its compounded tirzepatide drug was “personalized”; falsely claimed that its pharmacy partner voluntarily stopped compounding tirzepatide medications; and falsely advertising Mochi’s founder and CEO as a licensed physician.

How did this allegedly harm Lilly? Lilly alleged that it suffered irreparable harm to its brand and goodwill because Mochi promised unobtainable results and traded on the credibility of Lilly products. The complaint alleged:

When consumers fail to achieve desired results from Mochi Health’s combination injection, consumers may conclude that tirzepatide is ineffective in general— an outcome made more likely given Defendants’ reliance on Lilly’s clinical studies and their explicit claims that their product functions identically to Lilly’s products, with the additives having no clinical significance. Worse still, if consumers are harmed using compounded tirzepatide products from Defendants—where their dosage and formulation are subject to repeated arbitrary changes based solely on Defendants’ business relationships without any clinical justification—consumers may even draw unwarranted conclusions about the safety and effectiveness of Lilly’s FDA-approved tirzepatide medicines.

The court found no Article III standing. The only harm Lilly alleged to itself was reputational: if Mochi’s products didn’t work, consumers might conclude that Lilly’s products were also ineffective, and if they harmed consumers, consumers might conclude that Lilly’s products were also harmful.

Lilly argued that, given its claim of reputational injury, competition wasn’t required for proximate cause; it was enough to allege that the defendant damages the product’s reputation “by, for example, equating it with an inferior product.” But that still required Lilly to allege a factual basis to support its conclusion that its reputation has been damaged by comparison to an inferior product. The complaint didn’t do so; it didn’t allege that Mochi’s compounded product failed to help consumers lose weight, nor did it allege facts that plausibly support an inference of failure. “Lilly appears to argue the mere fact a medication is compounded makes it an inferior version of an FDA-approved product with the same active pharmaceutical ingredient. But compounding is a federally recognized and regulated pharmaceutical practice ….” As a result [this is a proximate cause “as a result,” not a but-for cause “as a result”], “the existence of compounded tirzepatide medications does not, in itself, plausibly support harm to the reputation of a tirzepatide manufacturer.” More would be required for this theory: “facts supporting an inference that Mochi Health’s compounded medication fails to meet consumer expectations about tirzepatide.”

Similarly, Lilly didn’t plausibly allege that Mochi customers were harmed by the compounded medications “such that they could draw unwarranted conclusions about the safety and efficacy” of Mounjaro or Zepbound. A “lone internet post by an unidentified individual” didn’t support a plausible inference that Mochi customers could reasonably draw a negative inference about Lilly’s product. There were no allegations that Health misled consumers into thinking there was no niacinamide, pyridoxine, or glycine in the medication; “the customer who allegedly complained of a rash knew of the niacinamide in the product prior to using it, and remarked on how it was a new addition compared to their previous prescription.” Thus, this allegation showed a customer who understood the difference, which wouldn’t support an inference that Lilly could be harmed.   

No Article III standing, no federal case.