After Watching $114B in Market Cap Vanish, Eli Lilly’s Putting a New Plan in Motion to Get it Back

When your stock drops by 13% in just a month, you have a few options. You could take a hard look in the mirror and figure out what’s not working. Or you could just point at the competition and blame them for making your life difficult. Guess which route Eli Lilly chose?

After a rough month for the stock (and a rough year for many in the pharmaceutical sector), David Ricks, CEO of Eli Lilly, is coming for compounding pharmacies that are making and selling unapproved versions of tirzepatide, the active ingredient in their popular weight-loss drug Zepbound and diabetes treatment Mounjaro. And Lilly isn’t pulling any punches… they’ve filed lawsuits against two pharmacies, Strive Pharmacy and Empower Pharmacy, for continuing to sell these versions despite the FDA’s decision to remove the shortage status for the drugs earlier this year.

Now, to be fair, compounders used to be allowed to do this. During the shortage, they were given a free pass to make their own versions of tirzepatide to help meet patient demand. But that pass expired back in March when the FDA laid down the law… unless you’ve got a really specific patient case (like someone allergic to an ingredient or unable to use the commercial form) you’ve got to stop making it.

But some compounders (like Strive and Empower) acted like they never got the important email. Instead, they’ve been continuing to produce their versions of tirzepatide, claiming that their products are more personalized or better in some way than Lilly’s FDA-approved options.

According to the lawsuits, Strive has been selling injectable formulations blended with vitamin B12 or glycine, promoting them as safer and more effective alternatives… claims Lilly says are completely false. Empower took it a step further, offering both injectable and oral versions of tirzepatide (something Lilly doesn’t even make) and they even went as far as using Lilly’s own clinical trial data in marketing materials, suggesting their product has the same backing and results. That, Lilly argues, is not just misleading… it’s dangerous (especially for their stock price, as we’ve seen the last month).

And it doesn’t stop there. Lilly’s legal team has apparently been binge-watching Suits, because they’ve now sent out 50 cease-and-desist letters to compounding pharmacies and telehealth cowboys caught slinging unauthorized versions. I guess you could say the company is serious about stopping the spread of these unapproved alternatives and protecting the integrity of its drugs (they just want to make that money back).

On the other hand, Hims & Hers (the telehealth platform blowing up on social media) has jumped on the opportunity to sell the real versions of Lilly’s drugs. They’ve partnered directly with Eli Lilly to offer both Zepbound and Mounjaro on their platform at a price of $1,899 per month, which is expensive but legal. The news helped Hims & Hers stock jump 5%, and it highlights how Lilly is focusing on partnering with established companies to ensure their products are available in a way that aligns with FDA guidelines (rather than chasing down every compounder cooking up their own DIY weight-loss formulas).

All in all, it’s very clear that Lilly is doing everything they can to protect their brand and crush the bootlegs running rampant. Call it brand protection, call it greed, call it both. Either way, they’re going to court… and they’re hoping the cash flows right back into their accounts.

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Stock.News does not have positions in companies mentioned.