Compounders sue FDA over the tirzepatide delisting

On October 7, 2024, the Outsourcing Facilities Association and North American Custom Laboratories, LLC, doing business as FarmaKeio Custom Compounding, sued the FDA in the U.S. District Court for the Northern District of Texas over the agency's decision to take tirzepatide injection off its drug shortage list ^[1][3]. Tirzepatide is the active ingredient in Eli Lilly's Mounjaro and Zepbound.

The timing matters. FDA had posted the update declaring the tirzepatide shortage "resolved" on October 2, 2024 ^[1][2]. Under federal law, the ban on compounding drugs that are "essentially a copy" of an approved product is temporarily suspended while that product sits on the shortage list ^[2]. Once tirzepatide came off, mass compounding of copies became unlawful for physicians, pharmacies and outsourcing facilities ^[2]. The lawsuit, docketed as No. 4:24-cv-953, argued FDA violated the Administrative Procedure Act by skipping notice-and-comment rulemaking and by making an arbitrary and capricious shortage call ^[2].

What the court did first

FDA did not immediately defend the October 2 decision. On October 11, 2024, at FDA's own unopposed request, the court remanded the decision back to the agency for reevaluation and stayed the case ^[1][2]. FDA also made representations about enforcement in connection with the litigation and sent a follow-up letter to the Alliance for Pharmacy Compounding on October 17, 2024 ^[1].

The reevaluation took about three months. On December 19, 2024, FDA issued a declaratory order that revoked and replaced the October 2 decision and again concluded the tirzepatide shortage was resolved ^[1]. The agency said Lilly's data on stock, supply, demand and planned production showed supply was "currently meeting or exceeding demand," with finished-product reserves, semi-finished units and substantial additional production scheduled ^[1]. FDA acknowledged receiving reports that some patients and pharmacists still could not get the approved drugs, but attributed those to "intermittent localized supply disruptions" in the distribution chain rather than a national shortage ^[1].

The order set new enforcement dates: state-licensed pharmacists and physicians compounding under section 503A had 60 days, until February 18, 2025, and 503B outsourcing facilities had 90 days, until March 19, 2025 ^[1]. FDA then extended the tirzepatide deadline further, until the district court ruled on the compounders' preliminary injunction motion, unless that ruling came first ^[4].

Background from the appellate record: Mounjaro pens were approved in May 2022 and added to the shortage list in December 2022; Zepbound pens were approved in November 2023 and added in April 2024 ^[1][2]. While the drugs were listed, Lilly spent roughly $23 billion expanding manufacturing in the U.S. and Europe ^[2]. Lilly's exclusivity on tirzepatide runs to 2027 ^[2].

Why it matters for patients

For people using compounded tirzepatide, this case decided whether that option stayed legal. Compounded drugs are not FDA-approved, meaning FDA does not review their safety, effectiveness or quality before they reach patients ^[2]. When the grace periods closed, the legal path to mass-produced copies closed with them, pushing patients toward branded Mounjaro or Zepbound, or to other treatments.

FDA itself predicted friction, writing that some patients on compounded products "can be expected to seek Lilly's approved products at a future point when compounding is curtailed" and that localized supply gaps could still occur even with the shortage resolved ^[1].

The tirzepatide suit also previewed the semaglutide fight. FDA removed semaglutide from the shortage list on February 21, 2025, with a 60-day grace period for 503A pharmacies to April 22, 2025, and 90 days for 503B facilities to May 22, 2025 ^[3]. OFA sued over that decision too ^[4]. Separately, Lilly petitioned to add tirzepatide to FDA's Demonstrable Difficulties for Compounding list and Novo Nordisk nominated semaglutide; if granted, compounding those molecules would be effectively barred regardless of shortage status ^[4].

What happens next

The compounders lost at every stage. The district court denied the preliminary injunction, then granted summary judgment for FDA and Lilly ^[2]. On August 27, 2026, the Fifth Circuit affirmed in an unpublished opinion, finding no prejudice from any notice-and-comment issue and holding the shortage determination was not arbitrary or capricious ^[2].