Lilly sued Mochi Health, Mochi Medical CA, P.C., Mochi Medical P.A., and Aequita Pharmacy LLC, alleging a scheme to mislead consumers into purchasing compounded versions of Lilly’s FDA-approved weight-loss medications MOUNJARO and ZEPBOUND.
The court held that Lilly plausibly alleged Article III standing, finding sufficient allegations of economic injury from diverted sales and reputational harm caused by consumer confusion between compounded tirzepatide and Lilly’s branded drugs.
Lilly’s First Amended Complaint asserts that Mochi Health steers patients toward compounded products through its control over Mochi Medical entities, including hiring physicians, providing diagnostic protocols, and unilaterally altering medication doses and formulations without clinical indication.
The court rejected Mochi Health’s argument that Lilly was judicially estopped from claiming diverted sales based on statements Lilly made in separate litigation regarding a drug shortage, finding the positions were not clearly inconsistent.
On the merits, the court denied dismissal of Lilly’s claim under California’s Unfair Competition Law, holding that Lilly plausibly alleged Mochi Health violated the state’s prohibition on the corporate practice of medicine by exercising control over medical decisions for profit.
The court also denied dismissal of Lilly’s Lanham Act false-advertising claim, accepting allegations that Mochi Health misled consumers by citing clinical trials for Lilly’s products to support the safety of compounded drugs and by falsely claiming its products were FDA-approved or personalized.
However, the court granted dismissal of Lilly’s third cause of action for civil conspiracy, holding that Lilly failed to plausibly allege that the defendants acted in concert to commit the statutory violations.