Eli Lilly unleashed a flurry of lawsuits against wellness centers, medical spas and others the pharmaceutical company accused of illegally hocking treatments that mimic its popular weight-loss drugs.
Why it matters: The emergence of GLP-1 medications — including Lilly’s Mounjaro and Zepbound — and widespread shortages have created tremendous financial opportunity for legitimate and illegitimate players.
The big picture: Lilly and fellow GLP-1 seller Novo Nordisk — whose drugs include Ozempic and Wegovy — are racing to protect their turf as competition intensifies.
- Lilly said its lawsuits are aimed at combating fake products, “unsafe compounded products,” misleading ads, illegal online sellers and “inappropriate use,” including the sale of GLP-1 drugs for cosmetic weight loss purposes.
- Novo in November filed its own series of lawsuits against medical spas, weight loss clinics, and compounding pharmacies, accusing them of “false advertising, trademark infringement and unlawful sales of non-FDA approved compounded products.”
State of play: With Lilly and Novo Nordisk both unable to keep up with soaring demand, the market for alternatives is flourishing.
- “These products are often advertised and sold online, through social media, or at certain med-spas,” Lilly said today in a statement. “They may contain no medicine, the wrong medicine, incorrect dosages, or multiple medicines mixed together, which could result in serious harm. They are never safe to use.”
Reality check: The FDA allows companies to sell compounded versions of drugs when the originals appear on the agency’s drug shortages list.
- Lilly’s lawsuits focus on the sellers’ improper use of its branded products in marketing.
Zoom out: Telehealth platform Hims & Hers recently announced it would offer compounded versions of GLP-1 injections for $199 monthly, delivering a pop to the company’s stock.
- Hims & Hers was not a target of a Lilly lawsuit Thursday, but jittery investors nonetheless drove the company’s stock down 10%.
The bottom line: The battle over the weight-loss drug space is just beginning.
