Eli Lilly And Co ( LLY ) has issued a series of cease-and-desist letters to U.S. healthcare providers, including telehealth companies, wellness centers, and medical spas, demanding they halt the promotion of compounded versions of the company’s weight-loss drugs, Mounjaro and Zepbound that contain tirzepatide.

Through its legal representation, the U.S. pharmaceutical giant argues that these compounded drugs are no longer necessary as the supply of its brand-name medications has improved.

The FDA allows compounding pharmacies to produce copycat versions of brand-name drugs during shortages.

Also Read: Eli Lilly’s Legal Battle Against Fake Compounded Tirzepatide Products: Bacteria, Impurities Detected.

While Eli Lilly’s CEO recently stated that the Zepbound shortage should soon be resolved, the FDA still lists it as ongoing.

Lilly maintains that compounded versions made at state-licensed facilities should no longer be sold now that its medications are available.

The Bloomberg report adds that the FDA is evaluating whether the supply of tirzepatide meets the criteria for resolving the shortage.

Meanwhile, at least one telehealth company, Zappy Health, has ceased offering new prescriptions for the medicines.

Since March 2022, the shortages of weight-loss drugs, including those made by Lilly and Novo Nordisk A/S ( NVO ) , have persisted, resulting in the rise of compounded, often more affordable versions.

Compounded drugs have generated substantial revenue for their makers, with sales reaching up to $1 billion annually.

Federal law stipulates that state-regulated compounders can only produce copycat drugs if the brand-name versions are not “commercially available.”

The FDA’s guidance clarifies that drugs on the shortage list fall under this category. This regulatory framework has led to tension between Lilly and healthcare providers who argue that brand-name drugs are still difficult to obtain.

Price Action: LLY stock is up 2.46% at $930.40 at the last check on Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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