Eli Lilly (NYSE:LLY) shares dropped in price Wednesday, amid news the company is suing two pharmacies for compounding Zepbound and Mounjaro. Lilly claims the companies are skirting the Food and Drug Administration’s (FDA) ban on the practice and luring people away from Lilly’s medicines.
In lawsuits filed Tuesday in Delaware and New Jersey, Lilly alleges the two companies — Strive Pharmacy and Empower Pharmacy — are falsely marketing their products as personalized versions of the drugs that have been clinically tested and are made using stringent safety standards. Lilly argues these claims are turning people toward compounded drugs and away from its FDA-approved treatments.
Empower in a statement said restricting access to personalized alternatives to commercial drugs is not in the best interest of patients, and it’s “committed to offering these life-changing formulations.” Strive called Lilly’s lawsuit a classic example of Big Pharma overstepping legitimate regulations to prioritize its own interests and said it will vigorously defend its position.
Compounding pharmacies and outsourcing facilities were largely supposed to stop making their own versions of tirzepatide, the active ingredient in Lilly’s weight-loss drug Zepbound and diabetes treatment Mounjaro, last month after the FDA determined the branded versions were no longer in shortage. Some continued compounding, tweaking the dosages and combining them with vitamins, distinctions that make them different from Lilly’s drugs and potentially allow them to skirt the FDA’s ban.
LLY shares shed $4.82 to $800.41.