Originally published by our sister publication Specialty Pharmacy Continuum

By Gina Shaw
Eli Lilly has sued the FDA over the classification of its investigational glucagon-like peptide (GLP-1) drug, retatrutide, arguing that the agency improperly classified the product as a drug rather than as a biological product.

It’s one of multiple legal and regulatory strategies that GLP-1 manufacturers are aggressively pursuing to stop compounding of the lucrative medications, said legal experts during a webinar sponsored by the healthcare law firm Frier Levitt on Feb. 13, 2025.

“In addition to the recent removals of semaglutide and tirzepatide from the drug shortage list, the manufacturers of both of these drugs have petitioned the FDA to add these drugs to the ‘demonstrably difficult to compound’ list, which would prohibit compounding,” said Martha Rumore, PharmD, JD, a pharmacist-attorney in Frier Levitt’s life sciences department. “But the Lilly suit against the FDA is different. They are arguing that retatrutide is a biologic as opposed to a drug, and this is very significant because biologics are not eligible for the exemptions for compounded drugs under sections 503A and 503B of the FD&C [Federal Food, Drug, and Cosmetic] Act [FDCA].”

The GLP-1 medications have been classified as peptides, not biologics; peptides that are FDA approved are considered drugs and allowed to be compounded if legal requirements for compounding have been met. Lilly has argued that retatrutide should instead be considered a protein; proteins and products that are “analogous” to proteins are included under the definition of “biological products” in the amended Public Health Service Act.

“A requirement for an agent to be classified as a biologic is that it must be greater than 40 amino acids in size. Lilly says that this particular GLP-1 has 41 amino acids,” Dr. Rumore said. Lilly describes retatrutide as having a backbone chain of 39 alpha amino acids connected via an isopeptide bond to a second backbone chain that has two or more amino acids, one of which is an alpha amino acid and one of which is not. The FDA determined that only alpha amino acids are counted toward the “greater than 40 amino acids” threshold, and further ruled that retatrutide did not qualify as “analogous to a protein” either, because it did not share the “fundamental defining property of a protein [of]  being greater than 40 alpha amino acids.”

In the lawsuit, Eli Lilly & Co. v. Becerra et al, filed in September 2024 in the District Court for the Southern District of Indiana, the manufacturer challenged the FDA’s determination that only alpha amino acids should be counted in deciding whether an amino acid chain is sufficiently long to meet the definition of a protein. Lilly also argued retatrutide is at least “analogous” to a protein and thus should be classified as a biological product.

“This is a billion-dollar question that is hinging on the word ‘alpha,’” Dr. Rumore said. “The limitation for ‘alpha’ does not actually appear in the text of the law, versus the broader category of amino acids, so Lilly may actually succeed here. And if they do, not only will it affect retatrutide but also a lot of other GLP-1s in the pipeline that would have this alpha amino acid.”

Grace-Period Extensions

Turning to another hot-button issue in GLP-1 compounding, Dr. Rumore noted that although the FDA has declared both semaglutide and tirzepatide to no longer be in shortage, there may be options for compounders to continue making compounded versions of these drugs after the agency’s grace periods for ramping down of compounding expire over the next few months. This extension could be granted if, for example, the compounder can demonstrate that its version is not “essentially a copy” of the original product—but that requires expert legal guidance, Dr. Rumore said.

Patent litigation around GLP-1 agents is also common, with most of the claims falling into one of three categories. “First, drug manufacturers have been suing compounding pharmacies to prevent their sale of compounded drugs, with the mechanism being the various state unfair and deceptive trade practices acts,” said Matthew Modafferi, JD, a partner in Frier Levitt’s healthcare and life sciences litigation department. “The second type of claim we’ve seen is a false advertising claim; although those have generally been directed against clinics and medical spas, we have also seen some suits against the actual compounding pharmacies. Finally, some cease and desist letters were sent out to API [active pharmaceutical ingredient] manufacturers to try to cut off the supply chain.”


Those letters have mostly come to an end, and did not turn into active litigation, Mr. Modafferi said. “The most likely reason for that is that most API manufacturers are out of the country and out of jurisdiction.”

Advice for Compounders

To avoid false advertising claims, Mr. Modafferi cautioned compounders to follow some simple rules. “The Supreme Court has said that pharmacies can advertise for compounds, but you need to be careful about the way that you market,” he said, adding a few examples:

• Don’t direct patients toward the compound as opposed to the brand.
• Don’t cite the branded drug manufacturer’s clinical studies.
• Don’t advertise the safety and efficacy of your compound.
• Don’t refer to your compound as a generic. 

“What this all comes down to is, are you making things in any way confusing for the consumer? That’s the legal standard,” Mr. Modafferi explained. “So avoiding things like that will help you stay out of the crosshairs of the branded drug manufacturers.”

Successful false advertising litigation against pharmacies, clinics and medical spas involved in GLP-1 compounding has often involved advertisements or social media posts saying, “We have the same active ingredient as Ozempic/Mounjaro/Zepbound,” or touting manufacturer clinical studies showing that a particular percentage of patients lost weight. “Generally, these cases have been successful,” he said. “Most of the defendants have settled rather than fight these larger entities. So in addition to being careful about your own statements, make sure you review any content that is created by an outside partner like a website designer social media marketer, and if you’re not sure, talk to counsel about what you can and cannot say on your website or in your social media pages.”

 Mr. Modafferi said some compounders are telling his firm they used an outside vendor to get them at the top of the Google search list. “The issue is that some of the search engine optimization terms they included to do that could be problematic,” he said.

Although the false advertising claims have largely been a win for the manufacturers, lawsuits against 503A compounding pharmacies to prevent the sale of compounded GLP-1 agents have been successfully defended by the pharmacies for the most part. “That’s because the U.S. has sole enforcement authority under the Food, Drug, and Cosmetic Act, and private enforcement is barred,” Mr. Modafferi explained. “So when a manufacturer tries to step into the shoes of the FDA and enforce the misbranding or adulteration provisions of the FDCA, that should be preempted.

“Are we seeing that across the board? No, but hopefully we will get to a point where it’s preclusive across the board, and that may curb some of these lawsuits from being filed because defending a lawsuit against a huge multibillion-dollar company is not fun.”

The sources reported no relevant financial disclosures beyond their stated employment.