Weight-Loss Drugmakers in ‘Whack-a-Mole’ Fight Against Knockoffs

The surging market for drugs treating diabetes and weight loss has spurred lawsuits from leading drugmakers and scrutiny from the FDA targeting vendors selling unauthorized versions of the blockbuster products.

Novo Nordisk’s Wegovy, Ozempic, and Rybelus have skyrocketed company sales this year as the prescription drugs have been demonstrated to treat more than one diagnosis. The same goes for Eli Lilly & Co.'s blockbuster Mounjaro. The drugs belong to a class of medicines known as GLP-1 antagonists used to treat type 2 diabetes and weight loss.

“Weight loss medication is the modern American Gold Rush,” said Robin Feldman, a law professor at the University of California, San Francisco. “When there’s a lot of money on the table, the fighting will be furious over who wins the pot. That is what we are seeing here,” Feldman added.

That pot of gold has led to concerns from Novo Nordisk and Eli Lilly that some pharmacies and vendors are engaging in trademark infringement and false advertising in connection with sales of non-FDA approved, compounded products that claim to contain the drugmakers’ active pharmaceutical ingredients. The drugmakers have filed a flurry of lawsuits alleging unlawful business and trade practices.

The Food and Drug Administration, too, has been vocal about the market and issued recent warning letters to some online vendors.

Companies “are trying to seek any and all legal claims they can make in order to obtain relief in these cases, and not just limiting themselves to saying, oh, ‘we think these particular parties are violating FDA requirements,’” said Joshua Oyster, partner at Ropes & Gray.

‘A Whack-a-Mole Game’

Lawsuits where drugmakers chase after knockoffs or compounded versions aren’t new. What’s different about these suits is the size of the market they’re defending.

“It’s a very large therapeutic area—talking about type 2 diabetes and obesity and weight loss—weight management. Those are areas where you have large potential markets in the US. We’re not talking about small patient populations,” Oyster said.

Eli Lilly is the only drugmaker authorized by the FDA to sell products containing tirzepatide, and Novo Nordisk is the only drugmaker authorized by the FDA to sell products containing semaglutide.

Eli Lilly reported that Mounjaro generated nearly $1 billion in second-quarter sales this year. For Novo Nordisk, the company expects its sales growth this year of 32% to 38%.

When the companies went after other vendors, they “launched several attacks at once on individual entities,” Oyster said.

“Some of these situations can be a bit of a whack-a-mole game, where there may not be just one entity that is doing this and making an alleged knockoff … there may be a handful or a dozen,” he said.

Eli Lilly in October filed a complaint before the US International Trade Commission against 11 online pharmacies both in and outside of the US to block them from importing, selling, or distributing products with tirzepatide. In September, the company went after medical spas, wellness centers, and compounding pharmacies that sold unapproved compounded products claiming to contain their active pharmaceutical ingredient.

Novo Nordisk filed lawsuits in June against medical spas and weight-loss or medical clinics for engaging in trademark infringement and false advertising. It also went after compounding pharmacies in July for unlawfully selling unapproved drug products claiming to contain semaglutide.

The company has been and “will continue to issue cease-and-desist letters to entities engaged in similar conduct,” a spokesperson for Novo Nordisk said in an email statement.

Dealing With Shortages

Courts have yet to rule on many of the cases, but the outcome for drugmakers arguing compounded versions of the drug can get tricky, according to Anjali Deshmukh, an assistant law professor at Georgia State University.

“Generally, compounding pharmacies can help patients gain access to difficult-to-find drugs by making alternative versions, which is permitted in certain circumstances by FDA to address drug shortages or unique needs,” Deshmukh said.

Semaglutide and tirzepatide injections are currently on the FDA drug shortage list.

Defendants in some of the compounding cases argue the FDA is authorized to bring actions to address violations of the drug approval process under the Federal Food, Drug, and Cosmetic Act, not the drugmaker.

“Congress explicitly authorized compounding pharmacies like WELLHealth to sell compounded drugs that are on the Federal Drug Shortage List, even though the compounded drugs are not approved by the Food and Drug Administration,” one compounding pharmacy said in its motion to dismiss against Novo Nordisk.

In one of Novo Nordisk’s cases, a Florida judge dismissed its complaint against compounding pharmacy Brooksville Pharmaceuticals.

Despite the dismissal, Novo Nordisk plans to file an amended complaint.

“As there is no private right of action, theories of liability that rely on FDCA violations are commonly preempted,” Deshmukh said.

“While courts are generally protective of FDA’s enforcement authority barring claims that would require litigation of alleged underlying FDCA violations, some courts have found unauthorized use of trademark claims to be distinct claims that do not rely on the FDCA. To date, Novo Nordisk has seen mixed results,” she said.

Agency Warnings

In the midst of lawsuits, the FDA weighed in on market sales when it sent warning letters to two online vendors selling unauthorized products that contained semaglutide and tirzepatide.

In both letters, the agency warned that “unapproved new drugs do not carry the same assurances of safety and effectiveness as those drugs subject to FDA oversight.”

One vendor—Gorilla Healing—now has an FDA disclaimer added to its site about its products. The other business—Semaspace—is no longer operating.

But even before the recent warning letters and lawsuits, the agency warned of adverse events patients faced when taking compounded versions.

The FDA earlier this year sent a letter to the National Association of Boards of Pharmacy about compounding pharmacies selling products with the salt form rather than the base form of semaglutide, which is a cheaper modified version used in scientific research rather than for human consumption.

Nonetheless, the FDA “will continue to monitor the marketplace and take appropriate regulatory response, when warranted,” the agency said in an email statement.