Oct 11 (Reuters) - The U.S. Food and Drug Administration

on Friday agreed to reconsider a decision it made last month to

bar drug compounders from selling their own versions of Eli

Lilly's ( LLY ) blockbuster weight loss and diabetes drugs.

The agency said in a court filing it would now allow

compounding pharmacies and facilities to keep providing the

drugs while it reviews whether there is a shortage of their

active ingredient. The compounding versions of the drugs are

cheaper for patients than the brand-name versions.

The decision was in response to a lawsuit brought on Monday

by the Outsourcing Facilities, Association, a compounding

industry group. After the FDA's decision on Friday to

reconsider, U.S. District Judge Mark Pittman in Fort Worth,

Texas put the lawsuit on hold.

The Sept. 30 decision by the FDA endangered the ability

of compounders to sell versions of Lilly's weight loss drug

Zepbound and diabetes drug Mounjaro. The FDA decision

removed their active ingredient

, tirzepatide, from its list of drugs experiencing

shortages.

That would have cut off access for many patients to the

compounded versions they relied on during the shortage, which

are cheaper than the brand name drugs. Insurers generally cover

drugs like tirzepatide for diabetes, but many do not cover them

for weight loss.

Shortages of Lilly's drugs and competitors like Novo

Nordisk's Ozempic have fueled demand for compounders'

versions. Mounjaro had been on the FDA's list of drugs in short

supply since late 2022, while Zepbound was added in April.

Compounded drugs, unlike conventional brand-name or

generic drugs, are sold without first getting FDA approval.

Compounding pharmacies may create drugs to fill prescriptions

for specific patients, while so-called outsourcing facilities

prepare compounded drugs in bulk.

Federal regulations allow compounded versions of an

FDA-approved drug to be sold to meet demand if the drug is in

short supply. If there is no shortage of a drug, compounded

versions of it cannot be made regularly or in large amounts.

The Outsourcing Facilities Association claimed in its

lawsuit that the FDA removed tirzepatide from its shortage list

even though it remained in short supply.

Lilly in August

began sending cease-and-desist letters

to telehealth companies, wellness centers and medical spas

selling compounded versions of Zepbound and Mounjaro. The

company has also

filed lawsuits

against sellers falsely claiming to sell FDA-approved

versions of the drug.

The active ingredient in Novo Nordisk's drugs,

semaglutide, remains on the FDA's shortage list.