Reported / Citable
Background
Eli Lilly sued Revive RX, a Houston drug-compounding pharmacy, under Texas common-law unfair competition. Lilly manufactures Mounjaro, an FDA-approved diabetes drug whose key ingredient is tirzepatide. It alleged that Revive unfairly competed by compounding and selling medications containing tirzepatide.
Revive moved to dismiss, contending that the claim is impliedly preempted because it would impose state-law requirements in an area governed by federal drug law. Lilly responded that its claim would fail under state law if Revive complied with the limitations in FDCA section 503A, without reaching preemption.
The Court’s Holding
The court stayed the case pending the Fifth Circuit’s decision in Zyla Life Sciences, LLC v. Wells Pharma of Houston, LLC, an appeal addressing whether federal law preempts comparable state-law claims by drug manufacturers against compounders.
Judge Rosenthal explained that Zyla was relevant despite Lilly’s argument that it did not involve Texas law: the decision considered similar state-law provisions from six states. The court also noted the Ninth Circuit’s conclusion in Nexus Pharmaceuticals, Inc. v. Central Admixture Pharmacy Services, Inc. that claims requiring litigation over whether compounded drugs are essentially copies of an FDA-approved drug intrude on matters the FDA has not resolved. The court did not decide Revive’s dismissal motion or the merits of Lilly’s claim.
Key Takeaways
- The action is stayed, not dismissed.
- The Fifth Circuit’s forthcoming Zyla decision is likely to determine whether and how Lilly’s suit may proceed.
- The court treated federal preemption as a potentially controlling issue for state-law claims challenging compounded versions of FDA-approved drugs.
Why It Matters
The order puts Lilly’s Texas unfair-competition claim on hold while the Fifth Circuit addresses a preemption question arising in numerous manufacturer-versus-compounder disputes. A Fifth Circuit ruling in Zyla could materially affect the viability of state-law challenges to compounded drugs alleged to compete with FDA-approved products.