Judge trims Lilly's conspiracy claims against Mochi Health over compounded tirzepatide

A federal judge in San Francisco on Sept. 8 trimmed Eli Lilly's lawsuit against telehealth company Mochi Health over compounded tirzepatide, dismissing federal false-advertising conspiracy claims while allowing California unfair competition conspiracy claims to proceed against the pharmacy that supplied the drugs ^[3][4].

U.S. District Judge Jacqueline Scott Corley of the Northern District of California partially granted Mochi Health's motion to dismiss Lilly's second amended complaint ^[3]. Lilly makes the FDA-approved tirzepatide drugs Zepbound and Mounjaro; Mochi sells compounded versions of tirzepatide ^[2][3].

What survived and what did not

Lilly "has plausibly alleged the Aequita defendants participated in a conspiracy to violate the UCL through the corporate practice of medicine," Corley wrote, referring to California's Unfair Competition Law ^[3]. California prohibits the corporate practice of medicine, meaning businesses without a medical license making medical decisions for profit rather than patient care ^[3].

Lilly alleges Mochi hires the physicians working at its medical entities, known as Mochi Medical, advertises for them, and provides them "diagnostic protocols" related to obesity medicine. Lilly also claims Mochi unilaterally altered compounded medication doses for business rather than medical reasons ^[3]. Aequita's corporate entities are controlled by Abraham Chaibi, the husband of Mochi Health CEO Myra Ahmad, according to the suit ^[3].

Corley found it reasonable to infer that Aequita knew of the alleged scheme, noting Ahmad had "significant control" over Aequita's procedures and methods for filling prescriptions and that Aequita had "significant financial motivation" to take part ^[3]. "Given the allegations regarding Mochi Health's influence on pharmacy practices, the close relationship between Ms. Ahmad and Mr. Chaibi, and the shared financial benefit across the defendant entities, it is also reasonable to infer the Aequita defendants knew of the conspiracy's aim," she wrote ^[3].

The Lanham Act claims, which involve false advertising, were dismissed. Corley wrote that Lilly "has not alleged facts that plausibly support an inference the Mochi Medical defendants' conduct advanced the aim of the conspiracy; namely, to falsely advertise the compounded medication," and that for Aequita, Lilly did not show acts in furtherance of that aim beyond selling the compounded drug ^[3].

The two published accounts of the ruling differ on what happens to those federal claims. Courthouse News reports the Lanham Act claims were dismissed without leave to amend unless Lilly discovers facts supporting a conspiracy under the statute ^[3]. Another account says the judge gave Lilly another opportunity to amend the complaint ^[2].

This is Lilly's third attempt at the case. Corley dismissed it in 2025, finding Lilly had not shown how it was harmed by a rival seller of weight-loss drugs. In April 2026, she partially granted a second motion to dismiss, cutting Lanham Act claims and allowing state unfair competition claims to move forward ^[3].

Safety claims in the case

Lilly argued that studies cited in the litigation show a higher incidence of adverse side effects among users of compounded GLP-1 drugs than among users of FDA-approved versions ^[2]. Compounded drugs do not require FDA approval and, according to large drugmakers, are not tested as rigorously as FDA-approved drugs for safety, efficacy and quality ^[3].

Separately, Washington's Pharmacy Quality Assurance Commission stopped production at Aequita last year after finding the facility allowed untrained and unqualified staff to perform sterile compounding and failed to properly supervise staff, according to an account of the case ^[2].

A Lilly spokesperson said: "The court's decision confirms that common tactics used by many mass compounders are false and misleading, including advertising compounded knockoffs as FDA-approved or clinically proven and marketing standardized, mass compounded tirzepatide drugs as 'personalized' for patients" ^[2]. Lilly has brought similar suits against three other telehealth sellers of compounded tirzepatide and has obtained more than a dozen permanent injunctions against telehealth companies, medspas and mass compounders ^[2].

A Mochi Health spokesperson said: "We remain confident in our position and look forward to demonstrating through the discovery process that Mochi operates lawfully and in the best interest of patients" ^[2]. Courthouse News reported that representatives for the defendants did not respond to a request for comment by press time ^[3].

Why it matters for patients

The ruling does not change which tirzepatide products are FDA-approved. Zepbound and Mounjaro are approved; compounded tirzepatide is not ^[2][3]. The order also does not require any patient to change medication, and it does not order Aequita or Mochi to stop selling anything.

What it does is keep one set of claims alive in a case about how compounded tirzepatide is marketed and who oversees the medical decisions behind a prescription. The surviving claim centers on whether a business without a medical license effectively directed patient care, which is the kind of question that can affect how telehealth weight-loss programs are structured going forward ^[3].

No trial date in the case has been reported. Discovery is the next step, and if it produces facts about advertising, Lilly may be able to revive the dismissed federal claims ^[3]. How any eventual outcome would affect the supply, pricing or availability of compounded tirzepatide has not been disclosed.