Judge sides with Lilly on injury claim in compounded tirzepatide case against Mochi Health

A federal judge in California has rejected Mochi Health's argument that Eli Lilly failed to show an economic or reputational injury from the telehealth company's sale of compounded tirzepatide, the active ingredient in Lilly's Mounjaro and Zepbound ^[1]. The ruling addresses the threshold question of whether Lilly can bring its claims in federal court at all ^[1].

Lilly sued Mochi Health Corp., Mochi Medical CA, P.C., Mochi Medical P.A. and Aequita Pharmacy LLC in the Northern District of California, alleging a scheme to mislead consumers into buying compounded versions of its FDA-approved drugs ^[1]. An earlier version of the complaint was dismissed with leave to amend for failure to plausibly allege Article III standing ^[1]. Lilly then filed a First Amended Complaint with three claims: violation of California's Unfair Competition Law by Mochi Health, false advertising under the Lanham Act by Mochi Health, and civil conspiracy among all the defendants ^[1].

What Lilly alleges

Mochi Health is a telehealth company that connects consumers with physicians who can prescribe weight-loss medications, including compounded tirzepatide, according to the court's summary of the case ^[1]. Before December 2024, Mochi prescribed its compounded tirzepatide in 2.5 mg, 5 mg, 7.5 mg, 10 mg, 12.5 mg and 15 mg doses, Lilly alleges ^[1]. Lilly says Mochi then changed those doses en masse without consulting patients or receiving a clinical indication from a physician, reverted to the original doses in March 2025, and changed the doses and formulation again in September 2025 under a new partnership with Lexington Compounding Pharmacy ^[1].

Lilly also alleges that customers received compounded products containing niacinamide, glycine or pyridoxine depending on which pharmacy Mochi used, and that those additives reflected Mochi's financial considerations rather than a therapeutic purpose ^[1].

On the false advertising claim, Lilly alleges Mochi misrepresented its compounded tirzepatide as safe and effective based on studies conducted of Lilly's products, misrepresented the compounded products as FDA-approved, and described its compounded drug as "personalized" ^[1]. Lilly cites studies indicating a higher risk of adverse events from compounded tirzepatide, including abdominal pain, diarrhea, nausea, suicidality and cholecystitis ^[1]. Lilly further alleges that Mochi Health CEO Myra Ahmad and her husband, Abraham Chaibi, control the defendant companies ^[1].

The standing dispute

To sue in federal court, a plaintiff must show an injury that is concrete and particularized, that the defendant likely caused it, and that a court could redress it ^[1]. Mochi argued that Lilly had failed to establish all three elements, including by disputing that Lilly suffered any economic or reputational injury ^[1]. The court disagreed on the injury question ^[1].

Lilly's theory is that Mochi steers customers away from Mounjaro and Zepbound and toward compounded tirzepatide by hiring the physicians who work at the Mochi Medical entities, advertising for them, providing obesity treatment protocols and training medical staff, and by changing doses for existing customers ^[1].

How the court resolved the rest of the motion to dismiss, including the other standing requirements and whether Lilly adequately pleaded the elements of its claims, has not been reported.

Why it matters for patients

This case is about advertising and business practices, not about whether tirzepatide works. Mounjaro and Zepbound are FDA-approved; compounded tirzepatide is not, and Lilly's claim is that Mochi told consumers otherwise ^[1]. The studies Lilly cites on higher rates of side effects with compounded tirzepatide are allegations made by Lilly in a lawsuit, not findings by the court ^[1].

So far the practical effect is procedural. Nothing in the ruling changes which prescriptions are available or how they are dispensed. What the ruling does show is that a brand manufacturer's claim that it lost sales to a compounded competitor can clear the first standing challenge in federal court ^[1]. The case continues in the Northern District of California under Case No. 25-cv-03534-JSC ^[1]. No further hearing dates or deadlines have been reported.