Reported / Citable
Background
Strive Specialties, a state-licensed manufacturer of compounded drugs, sued Eli Lilly and Novo Nordisk over their GLP-1 medicines. Strive alleged that after shortages of branded GLP-1 drugs ended, the companies used direct-to-patient pharmacies and partnerships with telehealth providers to limit compounded-drug pharmacies’ access to patients and prescriptions.
Strive brought Sherman Act restraint-of-trade claims against both defendants, a Sherman Act monopolization claim against Lilly, and Clayton Act exclusive-dealing claims against both. It alleged a nationwide GLP-1 market for obesity and chronic weight management and, alternatively, a cash-pay submarket that included both branded and compounded GLP-1 medications.
The Court’s Holding
Senior U.S. District Judge Micaela Alvarez granted the defendants’ Rule 12(b)(6) motions and dismissed all claims with prejudice. The court held that Strive did not plausibly allege a cognizable relevant product market because compounded GLP-1 drugs, when the branded drugs are not on the FDA shortage list, may be made only when medically necessary for a particular patient.
That regulatory limitation meant the compounded products were not reasonably interchangeable with branded GLP-1 drugs, the court held. Strive also did not adequately plead cross-elasticity of demand. Its alleged injuries primarily concerned its own access to distribution channels and patients, rather than harm to competition, so it failed to plead antitrust injury. The same failure to establish competition in a relevant line of commerce defeated its Clayton Act claims.
Key Takeaways
- A plaintiff must plausibly allege a relevant market, including reasonable interchangeability or cross-elasticity of demand.
- Compounded GLP-1 drugs limited to medically necessary patient-specific use were not plausibly alleged to compete with branded GLP-1 drugs.
- Lost access to customers, prescriptions, or distribution channels is not alone antitrust injury.
Why It Matters
The decision underscores the pleading burden for antitrust claims involving regulated pharmaceutical products. A claimed competitive relationship cannot rest on lower prices or alleged efforts to exclude a rival if regulatory rules make the products available to materially different patient populations.