Lilly sues multiple companies, accusing them of illegal sales of the "weight loss miracle drug" Mounjaro.
Eli Lilly has filed lawsuits against 10 medical spas, health clinics, and compounding pharmacies across the United States, accusing them of selling unauthorized generic versions of Mounjaro at a low price. These lawsuits come at a time when Eli Lilly is working to address the shortage of Mounjaro, a medication that helps patients lose weight.
According to Dolphin Research APP, American pharmaceutical giant Lilly (LLY.US) filed a lawsuit against 10 medical spas, health clinics, and compound pharmacies across the United States on Tuesday, accusing them of selling unauthorized generic versions of Mounjaro, a low-cost imitation drug. Currently, Lilly is facing the issue of shortage in its "miracle weight-loss drug" Mounjaro, a diabetes treatment medication, due to the surge in demand in the US market. The popularity of this drug is largely attributed to its ability to help patients lose excess weight beyond its prescribed use.
It is understood that Lilly has filed several lawsuits in federal courts in Florida, Texas, Arizona, Georgia, Minnesota, South Carolina, and Utah. The lawsuits seek court orders to prohibit the sale of counterfeit Mounjaro and claim monetary damages.
Lilly specifically accuses the medical spas, clinics, and compound pharmacies of marketing and selling "compound versions" of the drug that allegedly contain tirzepatide, the active ingredient of Lilly's Mounjaro. Compound drugs generally refer to customized treatment versions that have not been approved by the US Food and Drug Administration (FDA).
Lilly is the sole patent holder of tirzepatide and does not sell this ingredient to external entities. It is currently unclear what drugs the medical spas and clinics are actually selling to consumers.
"The defendants did not invest the necessary time and resources to research, develop, and test their products to ensure their safety and efficacy, and obtain regulatory approval to sell them. Instead, they manufactured, marketed, sold, and distributed unapproved new drugs in Florida and 14 other states for unapproved uses," Lilly wrote in its lawsuit against Rx Compound Store, a compound pharmacy in Florida.
In the lawsuit, Lilly further stated, "Selling counterfeit Mounjaro exposes patients to drugs that have not been proven safe or effective, putting them at risk."
A few months ago, Novo Nordisk (NVO.US), the manufacturer of the weight-loss drug Ozempic and Wegovy, also took similar actions by filing multiple lawsuits against some medical spas and clinics, accusing them of selling compound versions of their popular drugs. Both drugs contain semaglutide as their active ingredient.
In May of this year, the FDA issued a warning stating that unauthorized versions of Ozempic and Wegovy pose safety risks. Previous reports have indicated adverse physical reactions to these compound versions of the drugs.
The FDA has not issued any warnings regarding compound versions of tirzepatide. However, according to the FDA's database, the global market for the "big three weight-loss drugs" - Mounjaro, Ozempic, and Wegovy - has been facing supply shortages in the United States since last year.
Some analysts and industry executives have suggested that the annual sales of these drugs and similar weight-loss therapies could reach $100 billion within 10 years. Morgan Stanley predicts that Novo Nordisk and Eli Lilly will dominate the majority of the weight loss drug market. Eli Lilly's stock price has been steadily rising this year, with a cumulative increase of 58% since the beginning of the year, while Novo Nordisk's stock price has risen by 40%.
Due to strong consumer demand for weight loss drugs driving sales growth, Danish pharmaceutical giant Novo Nordisk has raised its profit and sales expectations for this year. The company now expects sales to grow by up to 33% in 2023, higher than the previous forecast of 30%. The company has also raised its operating profit guidance by 3 percentage points. Despite supply constraints, Wegovy's sales in the last quarter exceeded market expectations, reaching 7.5 billion Danish kroner (equivalent to 1.1 billion US dollars).
In addition, the weight loss drug frenzy temporarily pushed Novo Nordisk's market value to $430 billion, surpassing Denmark's domestic gross domestic product and surpassing French luxury goods giant LVMH, making it the most valuable company in Europe.