Appeals court upholds FDA delisting of Mounjaro and Zepbound, citing $23 billion in Lilly capacity spending

The Fifth Circuit on August 27, 2026 upheld the FDA's decision to remove Mounjaro and Zepbound from the national drug shortage list, rejecting a challenge from compounding pharmacies and outsourcing facilities ^[1]. The court's opinion records that Eli Lilly spent about $23 billion on manufacturing capacity while the two tirzepatide drugs were listed as short ^[1].

The ruling, No. 25-10600, was issued per curiam by Circuit Judges Richman, Duncan and Oldham ^[1]. It is not designated for publication, so it does not bind future Fifth Circuit panels ^[1][2]. The panel affirmed the Northern District of Texas, which had granted summary judgment to the FDA and to Lilly as an intervenor ^[1].

The compounders argued that the FDA should have gone through formal notice-and-comment rulemaking and that the shortage determination itself was arbitrary and capricious ^[1]. The panel assumed without deciding that the FDA erred by skipping notice and comment, but found the compounders had not shown prejudice, and held that the shortage determination was not arbitrary or capricious ^[1]. A companion case involving Novo Nordisk's Ozempic and Wegovy was decided the same day by the same panel and also affirmed; in that opinion the panel wrote that any procedural error "was harmless" and that the agency's action was not arbitrary or capricious ^[2].

How the shortage list worked

Federal law blocks pharmacists, physicians and outsourcing facilities from compounding drugs that are "essentially copies" of an approved product, but that prohibition is suspended while a drug is on the FDA's shortage list ^[1]. The FDA added Mounjaro to the list in December 2022 and Zepbound in April 2024 ^[1]. Mounjaro was approved in May 2022 and Zepbound in November 2023, both as pre-filled single-dose pens ^[1].

The court records that while the drugs were listed, Lilly spent approximately $23 billion to build, expand, acquire and obtain manufacturing facilities in the United States and Europe, and won approval to sell single-dose vials alongside the original pens ^[1]. The FDA declared the tirzepatide shortage resolved on October 2, 2024, then confirmed that decision on December 19, 2024 after a voluntary remand, concluding that Lilly's supply would "meet or exceed projected demand" ^[1]. The agency said it would not act on certain violations for 60 or 90 days, depending on the type of compounder, to allow an orderly transition ^[1].

The opinion also notes that Lilly's five-year exclusivity for tirzepatide as a new chemical entity runs to 2027 ^[1].

Why it matters for patients

The decision means the FDA's finding that the tirzepatide shortage ended now stands, and that shortage status can no longer serve as the legal basis for large-scale compounding of Mounjaro or Zepbound copies ^[1]. Compounded preparations are not FDA-approved, and the FDA does not review them for safety, effectiveness or quality before they reach patients ^[1].

Patient-specific compounding by state-licensed 503A pharmacies can continue where an individual prescription and a documented clinical reason exist, such as an allergy to an inactive ingredient or a dose the approved strengths cannot deliver ^[2]. Regulatory exposure for programs that look like bulk manufacturing under a personalized label falls on the pharmacy and the prescriber, not on the patient ^[2].

On cost, the practical picture has shifted from both directions: brand self-pay programs from Lilly and Novo have narrowed the price gap that made compounded versions attractive, according to reporting on the two rulings ^[2]. Whether that continues has not been established by anything in the court record.

What happens next

The Outsourcing Facilities Association can seek rehearing by the full Fifth Circuit or petition the Supreme Court; neither is likely to move quickly, and the unpublished status makes the ruling a weaker precedent, and also a less attractive case for review ^[2]. Lilly's tirzepatide exclusivity runs to 2027 ^[1]. The shortage list is not permanent: if demand outruns supply again, the same statutory opening returns ^[2]. No dates for further filings have been reported.