Background
Mounjaro and Zepbound are Eli Lilly’s FDA-approved tirzepatide products for treating type-2 diabetes, obesity, and related conditions. Federal law generally restricts pharmacies and outsourcing facilities from compounding drugs that are essentially copies of approved products, but certain restrictions are suspended while an approved drug appears on the FDA’s shortage list. The FDA listed Mounjaro in December 2022 and Zepbound in April 2024.
After Eli Lilly expanded its manufacturing capacity, the FDA announced in October 2024 that the tirzepatide-injection shortage had ended. Following a voluntary remand prompted by the compounders’ lawsuit, the agency reevaluated the matter and confirmed its decision in December 2024 through a declaratory order and decision memorandum. The plaintiffs argued that the delisting required APA notice-and-comment rulemaking and that the FDA’s supply-and-demand analysis was arbitrary and capricious. The district court entered summary judgment for the FDA and Eli Lilly.
The Court’s Holding
The Fifth Circuit affirmed. It assumed without deciding that the FDA erred by proceeding through informal adjudication rather than notice-and-comment rulemaking, but held that any procedural error was harmless. The compounders had actual notice of the FDA’s reevaluation, submitted information for the agency’s consideration, and failed to identify additional evidence that formal Federal Register notice or a longer comment period would have produced.
The court also held that the FDA’s shortage determination was not arbitrary or capricious. The agency reasonably considered historical and projected supply-and-demand information, Eli Lilly’s inventories and production capacity, distribution-channel data, and the company’s expanded manufacturing operations. It also addressed contrary evidence—including wholesaler screenshots, patient surveys, news reports, individual comments, and sales of compounded tirzepatide—and rationally explained why it regarded much of that evidence as limited, anecdotal, insufficiently specific, or less probative than Eli Lilly’s data.
Key Takeaways
- The court did not decide whether the tirzepatide delisting legally required notice-and-comment rulemaking; it held only that any failure to use those procedures was harmless in this case.
- An APA challenger alleging inadequate notice bears the burden of showing prejudice, and the compounders did not identify information they were prevented from presenting.
- The FDA engaged in reasoned decision-making by explaining its reliance on Eli Lilly’s supply data and its treatment of competing evidence concerning product availability.
Why It Matters
The decision leaves in place the FDA’s determination that the shortage of Mounjaro and Zepbound was resolved, thereby restoring the statutory restrictions on compounding products that are essentially copies of those approved drugs. It also illustrates that procedural APA challenges may fail on harmless-error grounds when affected parties had actual notice and a meaningful opportunity to submit evidence.
The ruling does not establish that FDA drug-shortage delistings are categorically exempt from notice-and-comment requirements. Instead, it affirms this delisting because the compounders failed to demonstrate procedural prejudice and because the administrative record supported the agency’s supply-and-demand judgment.