Eli Lilly Sues 4 GLP-1 Telehealth Startups, Escalating War on Knockoff Drugs

On Wednesday, pharmaceutical giant Eli Lilly sued four prominent telehealth companies that offer more affordable, off-brand versions of its patented best-selling GLP-1 medications Mounjaro and Zepbound. Together, the drugs accounted for over $16.4 billion in revenue for the company last year. It’s the latest escalation in an ongoing war between the drug industry and health care providers over what are widely seen as the most effective—and lucrative—drugs for treating obesity and diabetes to come on the market in years.

The lawsuits target four telehealth brands, Mochi Health, Fella & Delilah Health, Willow Health, and Henry Meds. Eli Lilly alleges that each company is selling knockoffs of its drugs, in some cases, with untested added ingredients like vitamins and amino acids in an attempt to distinguish them from its name-brand medications.

None of the companies named as defendants immediately responded to requests for comment from WIRED about the lawsuits. In response to general questions about its business practices, Mochi Health said in a statement that it offers compounded GLP-1 medications that are “customized for medical necessity."

“Their use remains appropriate and legal when tailored to individual patient needs and prescribed by a licensed medical provider—not as mass-market substitutes for branded medications,” Mochi Health said. Fella & Delilah Health, Willow Health, and Henry Meds did not respond to questions about its business practices in time for publication.

Lilly previously filed other lawsuits against more than a dozen compounding pharmacies, medical spas, and wellness centers for selling drugs claiming to contain tirzepatide, the active ingredient in both Zepbound and Mounjaro.

Mounjaro surged in popularity after it was approved to treat diabetes in May 2022, and the FDA declared some doses of it were in shortage by the end of that year. Zepbound was approved as an obesity treatment in November 2023, with certain doses going into short supply months later. (Novo Nordisk’s competing GLP-1 medications, Ozempic and Wegovy, also went into shortage in 2022.)

When there’s an official shortage of a drug, compounding pharmacies are legally allowed to create duplicate copies or custom-mixed approximations known as “compounds” to meet patient needs. These off-brand versions are not approved by the FDA—but they are often far more affordable than name-brand medications.

During the years-long tirzepatide and semaglutide shortages, which the FDA officially declared over in December and February, compounded GLP-1s became widely available through existing telehealth providers and startups that sprang up specifically to cash in on the new, lucrative health care niche. According to a trade group representing compounders, at least 2 million people in the US were taking these medications as of November last year.

Some telehealth companies offered vials of tirzepatide for under $100, a fraction of the cost of Mounjaro and Zepbound, and shipped them to patients within days after they filled out a quick online questionnaire.

While most telehealth brands and compounding pharmacies do not disclose their revenue, industry juggernaut Hims said during a recent earnings call that it brought in about $225 million from GLP-1 drug sales last year. (Hims no longer sells compounded tirzepatide, but recently added branded Zepbound to its offerings.)

The FDA gave compounders a grace period to wind down their production of the drugs after the shortage was over. Small pharmacies had until February 18 to comply, while larger outsourcing facilities had until March 19. (Semaglutide compounders were ordered to cease mass production this spring, with smaller compounders given a deadline of April 22 and outsourcing facilities given until May 22.)

While many compounding pharmacies and telehealth providers have halted production and sales, others have continued to offer tirzepatide products with add-on ingredients, unapproved dosages, or in different forms, such as oral versions. “It’s a minority,” says Jayne Hornung, chief clinical officer at the pharmaceutical analytics company MMIT.

Hornung says that companies continuing to sell tirzepatide are hoping the vitamin additives and other tweaks will allow them to argue they aren’t selling straightforward copies of Lilly’s patented drugs. “They’re getting very creative,” she says.

Compounding pharmacies are generally permitted to create customized medicines for patients even when they’re not in shortage, such as for individuals who may be allergic to certain ingredients or need carefully calibrated doses. The crux of Lilly’s argument is that, when it comes to tirzepatide, the medications telehealth companies are offering are not truly personalized because they are being mass produced and prescribed to many patients.

“There are some ways that compounders tailor a medication to the patient, such as by adding another ingredient that might help with a side effect or an additional concern or diagnosis,” says Annie Lambert, a pharmacist and clinical program manager at information services firm Wolters Kluwer. “But there needs to be good science and evidence behind the safety of combining those things."

Mass-producing compounded versions of existing drugs with additives was not widespread until recently, according to Nicole Snow, a pharmacist at the compounding company Olympia Pharmaceuticals, which previously produced compounded tirzepatide but stopped after the shortage ended and never included additives. “We’d seen it from time to time, but not in this magnitude,” she says. “It wasn’t a very popular thing until we got into GLP-1s.”

In its suit against Mochi, Eli Lilly claims the telehealth company “switched dosages and prescriptions for patients en masse at least five times—with corporate interests, rather than doctor decisionmaking—driving the changes.”

Those changes, Lilly alleges, included creating two new formulas containing a niacinamide additive and pyridoxine, both forms of vitamin B that the pharma company argues have not been proven to be safe or effective when combined with tirzepatide. Mochi’s own compounder, Aequita Pharmacy, made some of those products. In March, regulators in Washington state ordered production to be halted at Aequita Pharmacy, citing safety violations connected to GLP-1 medications.

In another lawsuit filed in the same California court, Lilly claims that Fella & Delilah Health switched all of its patients from a compounded tirzepatide product with no additives to a version containing untested amino acid additives late last year.

The pharmaceutical giant’s lawsuit against Henry Meds, which offers oral and injectable GLP-1 medications, accuses the company of “creating the false impression” that clinical trials have confirmed the effectiveness of its drugs, “materially omitting that no such clinical trial data exists.”

Lilly’s lawsuit against Willow Health Services alleges that the Texas-based telehealth company falsely markets some of its products, such as an oral droplet GLP-1 drug and a version of compounded tirzepatide with added niacinamide added, as “custom-prepared” for patients despite being mass-produced.

Some companies selling compounded GLP-1 meds are unlikely to stop without a fight. A compounding trade group has filed a set of lawsuits against the FDA on behalf of clients, arguing that the agency prematurely declared the GLP-1 shortages over. Whether or not their legal efforts are successful, there’s still a possibility that the drugs could once again go into shortage if demand continues to rise. As new research continues to point to additional medical uses for these drugs, that may very well happen.

“Pharmacies compound medication all the time, and there are no lawsuits about it because they’re not trying to compete with drug companies,” Lambert says. “This is so contentious because there’s so much money at stake.”