Fifth Circuit upholds FDA's removal of tirzepatide from the shortage list

The U.S. Court of Appeals for the Fifth Circuit on Aug. 27, 2026 affirmed a lower court ruling that backed the FDA's removal of tirzepatide injection products — the active ingredient in Eli Lilly's Mounjaro and Zepbound — from the federal drug shortage list ^[1]. The unpublished, unsigned opinion in No. 25-10600 was issued by Judges Richman, Duncan and Oldham and rejected both of the compounders' arguments under the Administrative Procedure Act ^[1].

The case was brought by the Outsourcing Facilities Association and North American Custom Laboratories, LLC, doing business as FarmaKeio Custom Compounding, against the FDA, with Eli Lilly intervening on the agency's side ^[1]. The compounders argued that FDA should have used formal notice-and-comment rulemaking before delisting the drugs, and that the shortage decision itself was arbitrary and capricious ^[1]. The panel assumed without deciding that skipping notice and comment was an error, then held the compounders "have not met their burden to show prejudice," and separately found the shortage determination was not arbitrary or capricious ^[1].

How the shortage ended

FDA added Mounjaro to the shortage list in December 2022 and Zepbound in April 2024 ^[1]. While the drugs were listed, Lilly spent roughly $23 billion expanding manufacturing in the United States and Europe, and won approval to sell single-dose vials alongside the original pre-filled pens ^[1]. On Oct. 2, 2024, FDA posted an update declaring the tirzepatide injection shortage resolved ^[1]. After the compounders sued, FDA voluntarily took the decision back for review, then confirmed on Dec. 19, 2024 that the shortage was over because Lilly's supply would "meet or exceed projected demand" ^[1].

FDA memorialized that call in a Declaratory Order and Decision Memorandum, describing it as an "informal adjudication" and noting that patients, compounders, outsourcing facilities, telehealth companies and Lilly all submitted information both before and after the October decision ^[1]. The agency also said it would hold off on enforcement for 60 or 90 days, depending on the type of compounder, "to avoid unnecessary disruption to patient treatment and to help facilitate an orderly transition" ^[1].

A companion opinion issued the same day, No. 25-10758, resolved the parallel challenge to FDA's delisting of semaglutide injection products — Novo Nordisk's Ozempic and Wegovy — the same way ^[4]. That panel wrote that "[a]ny error by the FDA in not proceeding through the APA's notice and comment procedures was harmless, and the FDA's ultimate action was not arbitrary or capricious" ^[4]. Wegovy went on the shortage list March 31, 2022 and Ozempic on Aug. 23, 2022; FDA removed both in early 2025 ^[4].

One law firm analysis notes that in the tirzepatide case, FDA discounted access complaints gathered through a Hims & Hers website because the reports did not reliably show when or where the problem occurred, why the person could not get the drug, or whether the same person filed more than once — and the court found FDA reasonably treated manufacturer data as more probative ^[3].

Why it matters for patients

Federal law bars compounding drugs that are "essentially copies" of approved products, but those limits loosen while a drug is on FDA's shortage list ^[1]. With the delistings now upheld, that broad shortage-based pathway for mass-produced compounded semaglutide and tirzepatide is closed ^[3]. Compounded drugs are not FDA-approved, meaning the agency does not review them for safety, effectiveness or quality before they reach patients ^[1].

One law firm's read is that the rulings do not end all compounding: Section 503A still allows compounding for an identified individual patient when statutory conditions are met, including situations where a prescriber determines a compounded product makes a significant difference for that patient ^[3]. But programs that route large numbers of patients to substantially the same formulation may face different scrutiny ^[3]. The sources do not say how many patients currently use compounded GLP-1 products, or what prices or availability will look like going forward.

What happens next

The opinions are unpublished, so they are not binding precedent, though the firm analysis says district courts facing similar challenges must apply the same governing standards and should reach the same result absent materially different facts or legal theories ^[3]. The semaglutide opinion was revised on Sept. 1, 2026 ^[4]. Lilly's exclusive right to manufacture tirzepatide products runs to 2027 ^[1]. Whether the compounders will seek rehearing or Supreme Court review is not addressed in these sources.