October 12, 2026

GLP-1 Compounding: The Legal Showdown, One Year Later

Last July, we called the fight over compounded GLP-1s the next legal showdown. Fifteen months later, that showdown has largely been decided through two parallel Fifth Circuit cases,

One case involved Lilly’s tirzepatide products and the other involved Novo Nordisk’s semaglutide products. The courts upheld FDA, the agency escalated its enforcement, and the brand owners shifted from suing to dealmaking.

The Fifth Circuit sides with FDA

On August 27, 2026, the Fifth Circuit issued a pair of companion decisions addressing FDA’s removal of GLP-1 drugs from the shortage list. In one case, the court upheld FDA’s decision regarding Eli Lilly’s tirzepatide products (Mounjaro and Zepbound); in the other, it upheld FDA’s decision regarding Novo Nordisk’s semaglutide products (Ozempic and Wegovy). The same three-judge panel decided both appeals on the same day. The Outsourcing Facilities Association (OFA) and FarmaKeio argued that FDA skipped notice-and-comment procedures and ignored evidence of ongoing shortages.

The panel rejected both arguments. It declined to decide whether delisting was a rule. Instead, it held that any procedural error was harmless: the compounders had actual notice and submitted dozens of comments over several months. Based on the evidence before it, the court held that FDA reasonably gave greater weight to Novo Nordisk’s detailed production, inventory, supply, demand, and wholesaler data than to pharmacy screenshots and largely form-letter patient submissions, because the latter contained significant limitations and lacked important contextual details.

Two caveats. Both opinions are unpublished, so they aren’t binding precedent. And OFA could still seek rehearing en banc or Supreme Court review, though we haven’t seen reports that it has.

Correction to our original piece: the OFA litigation was filed in the Northern District of Texas, not D.D.C., and tirzepatide left the shortage list on December 19, 2024.

FDA goes on offense

The delisting was only the start. Since our original piece, FDA has opened three new fronts:

Marketing. Roughly 100 cease-and-desist letters on deceptive drug ads went out in September 2025 (Frier Levitt). In March 2026, 30 warning letters followed, targeting telehealth companies that implied compounded GLP-1s were equivalent to approved drugs (Venable).
Ingredients. In February 2026, FDA said it would restrict GLP-1 active pharmaceutical ingredients destined for unapproved compounded drugs, and signaled scrutiny of imported APIs (McDermott+).
The 503B bulks list. In April 2026, FDA proposed excluding semaglutide, tirzepatide and liraglutide from the list that lets outsourcing facilities compound from bulk ingredients (Orrick). Comments closed June 29, and a final decision is pending (NABP). If finalized, it would close the last major route to bulk compounding while the drugs stay off the shortage list.

Lilly’s lawsuits: a mixed scorecard

In April 2025, Lilly sued four telehealth platforms and compounders over “knockoff” tirzepatide. The results have been uneven, with standing proving a real obstacle. Here are some of the results:

Defendant	Outcome
Mochi Health- case is ongoing, claims of false advertising and unfair competition proceeding after partial dismissal. Trial set for Jan 2028. Case centers on whether Mochi’s marketing misled consumers.	Survived. The court found standing and largely denied the motion to dismiss, April 2026 (Mealey’s)
Willow Health- claims that advertising was misleading, drew patients away and harmed the reputation	Dismissed with prejudice for lack of Lanham Act standing (Mealey’s; order)
Strive Pharmacy- trademark and false advertising lawsuit	Dismissed in Delaware, October 2025 (BenefitsPRO)

The lesson so far: false-advertising suits work best when the defendant’s claims are specific and verifiably false. Broad attacks on compounding itself have fared worse.

Novo and Hims & Hers: from lawsuit to partnership

In February 2026, Hims & Hers announced a compounded semaglutide pill priced well below Novo’s newly launched oral Wegovy. Novo sued for patent infringement. Two days later, and a day after FDA’s API warning, Hims pulled the product (AP via WTOP). HHS also referred Hims to the Justice Department over alleged federal drug-law violations (EMJ).

By March, the dispute had become a deal. Novo dismissed its suit, and Hims began selling branded Wegovy and Ozempic and agreed to stop advertising compounded GLP-1s. Novo reserved the right to refile (AmSpa; ip fray). For brand owners, partnering with telehealth may prove more effective than suing it.

States: restriction, not safe harbors

We expected state laws protecting in-state compounders, followed by preemption fights. The opposite happened. Florida’s access bill, HB 1407, died in committee in 2025. Meanwhile, bills to tighten GLP-1 compounding rules have appeared in Florida, Colorado, California and Arizona, where the bill failed in February 2026. Most add labeling, API-quality and advertising requirements.

What’s still open

FDA’s final 503B bulks-list decision, the biggest pending item.
Any further OFA appeal, whether en banc or to the Supreme Court.
The DOJ referral of Hims & Hers. No public outcome yet.
Lilly v. Mochi and other surviving suits, now moving toward discovery.
Profit disgorgement for sales made during the shortage, which no court has yet addressed.

The Hatch-Waxman takeaway

Our original question was whether the law would snap back to protect innovation once the shortages ended. It has. Courts deferred to FDA, and FDA used every tool it has. But the brand owners’ most effective weapon wasn’t litigation. It was regulators, plus partnerships that put branded drugs on the same telehealth platforms that once sold the copies.

In the end, the GLP-1 shortage may prove to be less a compounding story than a Hatch-Waxman story. The episode tested what happens when extraordinary demand collides with the statutory framework that balances patient access and pharmaceutical innovation. The answer, at least for now, is that the framework held. Once FDA concluded the shortages were over, exclusivity rights regained their force, and competition returned to the channels Congress intended. Future shortages will undoubtedly raise similar questions, but these cases provide an early roadmap for how courts, regulators, and manufacturers are likely to respond.