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.
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