Eli Lilly And Co (NYSE:LLY) shares are trading lower on Thursday. The company, along with Novo Nordisk (NYSE:NVO), are reportedly being sued in Texas by compounding pharmacy Strive Specialties, which alleges they are illegally blocking access to customized versions of their blockbuster weight-loss medicines.
Eli Lilly and Co stock is feeling bearish pressure. Why is LLY stock dropping?
The Unraveling Legal Battle Over GLP-1 Drugs
Strive filed the suit Wednesday in federal court in San Antonio, accusing Lilly and Novo of using their dominance in the GLP‑1 market to prevent patients from getting lower‑priced compounded alternatives, Reuters reported.
Demand for GLP‑1 drugs like Ozempic, Wegovy, Mounjaro and Zepbound has exploded, and both companies are not only competing with each other but also trying to fend off compounding pharmacies that create tailored versions during shortages.
According to the lawsuit, Lilly and Novo struck exclusive deals with major telehealth platforms that stopped doctors from prescribing compounded GLP‑1 medications, even when a patient needed a specific dose or formulation. Strive also alleges Lilly tried to discredit compounded drugs as unsafe and interfered with the pharmacy's relationships with payment processors and tech partners.
Lilly pushed back, saying Strive's claims are "wrong on both the facts and the law." Strive is seeking monetary damages and a court order preventing Lilly and Novo from enforcing the alleged exclusivity agreements.
LLY Price Action: Eli Lilly shares were down 3.67% at $1,033.94 at the time of publication on Thursday, according to Benzinga Pro.
Image: Shutterstock
Image: Shutterstock
