Telehealth companies selling compounded drugs are making modest inroads into the market for popular weight loss drugs that Big Pharma spent decades and billions of dollars to develop and bring to market. The compounded products, with fewer barriers to entry, are reaching a broader consumer market than U.S. Food and Drug Administration (FDA)-approved glucagon-like peptide-1 (GLP-1) products, and at least one brand pharma player – Eli Lilly and Company (Lilly) – is turning to the courts to reverse the trend.
In April 2025, Lilly filed four lawsuits in the U.S. District Court for the Northern District of California against telehealth companies Fella Health, Willow Health, Henry Meds and Mochi Health.1 These four lawsuits follow numerous lawsuits Lilly previously filed against compounding pharmacies, alleging these pharmacies are selling illegal versions of Lilly's GLP-1 drugs without FDA approval.
Background: Telehealth and Drug Compounding
Telehealth companies allow patients to receive medical care without having to physically step foot in a doctor's office. These companies offer medical services to patients remotely using video calls, phone calls and instant messaging. This access to care presents a unique opportunity for people to be prescribed medicine without having to be examined by their doctor in person. Telehealth visits in the U.S. are up more than 1,000 percent since 2020, with more than 80 percent of physicians in the U.S. now reporting use of the internet as a means of evaluating patients.
Pharmacy compounders, also known as compounding pharmacists, create customized medications to meet the specific needs of individual patients. They do this by combining, mixing or altering ingredients to produce a drug that is not commercially available or adjust dosage forms or strengths. Compounded drugs do not require FDA approval and typically are not manufactured according to the same standards as FDA-approved drugs. Critics of the practice of compounding – brand pharma manufacturers among the loudest – warn that compounded drugs do not undergo the same rigorous testing for safety, efficacy and quality as the FDA-approved drugs they seek to replace. Even so, many consumers report positive experience using compounded drugs, and consumers seem to like – and increasingly are using – compounded "alternatives" to popular FDA-approved drugs.
New Pressure Through Litigation
Enter Lilly's new litigation strategy. In April 2025, Lilly filed the first four of what industry experts anticipate will be dozens of lawsuits challenging the practices pharmacy compounders have used to emerge overnight as marketplace competitors. These four new lawsuits follow Lilly's earlier lawsuits against at least two drug compounding pharmacies, Strive Pharmacy (Strive) and Empower Pharmacy (Empower), for compounding Lilly's tirzepatide drugs.2
Tirzepatide is the active ingredient in Lilly's diabetes drug Mounjaro and its weight loss drug Zepbound. Tirzepatide targets patients' GLP-1 and glucose-dependent insulinotropic polypeptide (GIP) receptors. Tirzepatide activates both receptors to improve blood sugar control and reduce appetite and food intake. Compounding pharmacies such as Strive and Empower are allowed to make compounded drugs during a drug shortage. Tirzepatide was in shortage for two years, allowing compounding pharmacies to make and sell compounded tirzepatide. However, once the shortage was over in December 2024, the FDA mandated pharmacies to stop making the compounded drug.
In its lawsuits against Strive and Empower, Lilly claims these pharmacies continue to compound Zepbound and Mounjaro despite the FDA ban. Lilly further alleges the pharmacies falsely market these products as "personalized" versions of tirzepatide when, in reality, they are mass-produced compounded drugs that have not been clinically tested or approved by the FDA. Lilly's lawsuits include claims for deceptive and unfair trade practices, as well as false or misleading advertising.
According to Lilly, Strive's and Empower's "false marketing claims and deceptive business practices create dangerous patient safety risks." Further, these "practices lure consumers away from Lilly's safe and effective FDA-approved medicines in favor of [Empower's/Thrive's] untested and unapproved products." Lilly claims the purpose of these lawsuits is to protect patient safety and stop the compounding pharmacies' deception.
Lilly has since moved on from compounding pharmacies and started suing telehealth companies for similar violations. Each of the new Lilly lawsuits filed at the end of April 2025 target telehealth companies for selling and marketing knockoff compounded tirzepatide drugs. Lilly alleges these telehealth companies sell illegal copies of Lilly's Mounjaro and Zepbound made by compounding pharmacies. Lilly claims these telehealth companies are deceiving consumers and engaging in false and misleading advertising. According to Lilly, these companies, like the compounding pharmacies, falsely advertise "personalized" options of tirzepatide drugs for its customers when, in actuality, they are selling a standard, mass-produced compounded tirzepatide drug. Lilly also accuses them of relying on the credibility of Mounjaro and Zepbound in marketing and selling tirzepatide in pill form and drop form – both of which have never been studied or approved by the FDA.
The gravamen of Lilly's complaints is these companies are engaging in deceptive business practices that cause irreparable harm to Lilly's brand and customer goodwill by promising results that consumers will not obtain through the compounded knockoff drugs. According to Lilly, these companies promote their copycat products by "trading on [Lilly's] credibility – earned through decades of safe and effective pharmaceutical manufacturing and years of clinical research and testing on tirzepatide specifically – of FDA-approved MOUNJARO® and ZEPBOUND®."
In its lawsuits against Mochi Health and Fella Health, Lilly accused the companies of engaging in the unlicensed practice of medicine. The corporate practice of medicine (CPOM) refers to the ownership of medical practices by unlicensed medical professionals. California has specific laws prohibiting CPOM. For example, California Business and Professions Code Section 2052 states: "Any person who practices or attempts to practice, or who holds himself or herself out as practicing...[medicine] without having at the time of so doing a valid, unrevoked, or unsuspended certificate...is guilty of a public offense." Similarly, Section 2400 states in part: "Corporations and other artificial entities shall have no professional rights, privileges, or powers." The Medical Board of California interprets these statutes broadly and maintains a list of prohibited decisions and activities on their website, including "non-physicians owning or operating a business that offers patient evaluation, diagnosis, care and/or treatment."
According to Lilly, Mochi Health and Fella Health violated California law requiring medical decisions to be made by doctors by exercising "undue control" and "undue influence" over prescribing decisions, as well as modifying the formulation, dosage and titration schedule of compounded drugs prescribed to their customers. Lilly alleges that in doing so, Mochi Health and Fella Health engaged in the "unlawful corporate practice of medicine."
Though the adjudication of Lilly's claims is possibly years away, its decision to file these new lawsuits demonstrate that telehealth companies and compounding pharmacies may face new challenges from Big Pharma and even potential exposure to liability, depending on how they constitute, market and distribute their products.
Notes
1 The cases are Eli Lilly and Co. v. Aios Inc. d/b/a/ Fella Health and Delilah et al., case number 3:25-cv-03535; Eli Lilly and Co. v. Willow Health Services Inc., case number 2:25-cv-03570; Eli Lilly and Co. v. Adonis Health Inc. d/b/a/ Henry Meds, case number 3:25-cv-0353; and Eli Lilly and Co. v. Mochi Health Corp. et al., case number 3:25-cv-03534.
2 The cases are Eli Lilly and Co. v. Strive Pharmacy LLC d/b/a Strive Compounding Pharmacy, case no. 1:2025cv00401 in the U.S. District Court for the District of Delaware, and Eli Lilly and Co. v. Empower Clinic Services, LLC d/b/a Empower Pharmacy and Empower Clinic Services New Jersey LLC d/b/a/ Empower Pharma, case no. 2:2025cv02183 in the U.S. District Court for the District of New Jersey.
