By Legal Radar 
Millions of Americans turned to compounded versions of popular weight-loss and diabetes drugs during widespread shortages. Many found lower-cost options through pharmacies like Houston-based Empower Pharmacy. That access now sits at the center of high-stakes litigation and regulatory scrutiny.
Eli Lilly has sued Empower over compounded tirzepatide products. The FDA has issued multiple warning letters citing production practices and questions about whether certain formulations meet legal compounding standards. This article explains the Empower Pharmacy lawsuit timeline, court rulings, FDA actions, and practical implications for patients, providers, pharmacy owners, and investors.
Background: Compounding Pharmacies and the GLP-1 Boom
Compounding pharmacies prepare customized medications for individual patients when commercially available drugs do not meet specific needs. Under Section 503A of the Federal Food, Drug, and Cosmetic Act, state-licensed pharmacies can compound patient-specific prescriptions. Section 503B allows FDA-registered outsourcing facilities to produce larger batches under stricter current good manufacturing practice (CGMP) rules.
Demand for GLP-1 receptor agonists exploded. Tirzepatide (the active ingredient in Eli Lilly’s Mounjaro for type 2 diabetes and Zepbound for weight management) and semaglutide products faced prolonged shortages starting in 2022. Compounders stepped in with versions that often cost far less than branded drugs.
Empower Pharmacy positions itself as one of the largest compounding pharmacies in the United States. It operates both a 503A pharmacy and a 503B outsourcing facility in Houston. It has supplied compounded tirzepatide (including oral dissolving tablets and injections combined with niacinamide) and similar products to clinics, telehealth providers, and patients across most states.
The FDA declared the tirzepatide shortage resolved in December 2024 (after an earlier determination and legal challenges). Enforcement discretion periods for compounders ended in early 2025. After that point, pharmacies could no longer routinely produce “essentially copies” of commercially available drugs unless a prescriber documented a significant clinical difference for an individual patient.
Eli Lilly’s Lawsuit Against Empower Pharmacy
In April 2025, Eli Lilly filed suit against Empower Clinic Services, LLC (doing business as Empower Pharmacy) in the U.S. District Court for the District of New Jersey. Lilly alleged false or misleading advertising under the Lanham Act and related state claims. The company argued Empower was mass-producing untested, unapproved tirzepatide products and marketing them in ways that suggested safety, efficacy, and personalization comparable to FDA-approved Mounjaro and Zepbound.
Lilly voluntarily dismissed the New Jersey case without prejudice in July 2025 and refiled the same day in the Southern District of Texas (Houston Division, Case No. 4:25-cv-03464). The Texas complaint expanded the claims. Lilly asserted that Empower’s products (Tirzepatide ODT and tirzepatide/niacinamide injections in fixed strengths) were not truly personalized, had never undergone clinical testing or FDA approval, and were marketed deceptively. Lilly also pointed to Empower’s history of FDA observations and warning letters.
Empower responded that the lawsuit reflected an effort by a major manufacturer to limit competition and affordable, personalized options rather than genuine safety concerns. The pharmacy maintained it compounds pursuant to valid prescriptions and complies with applicable law.
The April 2026 Partial Dismissal
On April 29, 2026, U.S. District Judge Sim Lake issued a mixed ruling on Empower’s motion to dismiss.
The court dismissed Lilly’s federal Lanham Act (false advertising) claims. Judge Lake found Lilly had not alleged facts sufficient to establish the required proximate cause: that Empower’s advertising caused Lilly lost sales or irreparable harm to its brand or goodwill.
The court also dismissed Lilly’s Texas common-law unfair competition claims. It allowed claims under the unfair competition or consumer protection laws of several other states (Alaska, Colorado, Connecticut, Hawaii, North Carolina, South Carolina, and Tennessee) to proceed. The court rejected Empower’s argument that the state claims were preempted by the Federal Food, Drug, and Cosmetic Act.
Both sides claimed aspects of the ruling as favorable. Lilly noted it was consistent with other recent decisions allowing similar claims against compounders to move forward. Empower emphasized that key federal trademark and Texas claims had been eliminated.
The case continues on the surviving state-law claims. Discovery and further motions remain ongoing under the court’s scheduling order.
FDA Warning Letters and Regulatory Scrutiny
Separate from the private lawsuit, the FDA has repeatedly inspected Empower facilities and issued warning letters.
An April 2, 2025 warning letter (following a September–October 2024 inspection of the 503A facility) cited insanitary conditions for sterile products. Observations included inadequate routine environmental monitoring in critical areas, media fills not performed under the most challenging conditions, and incomplete sterilization of certain equipment contacting sterile components.
A more recent September 18, 2026 warning letter followed a November 2025 inspection. The FDA stated that certain Empower products (including specific tirzepatide/niacinamide and semaglutide/cyanocobalamin formulations) appeared to be essentially copies of FDA-approved drugs and were being compounded regularly or in inordinate amounts. The agency noted high order volumes and stated that differences (such as added B vitamins) appeared pretextual in light of the scale of production. It also observed that some prescriber “significant difference” statements appeared repeated verbatim across records.
The letter further cited insanitary conditions (inadequate dynamic smoke studies and media fills) and multiple CGMP violations for the products that no longer qualified for 503A exemptions. Those products were therefore treated as unapproved new drugs and misbranded. Empower submitted multiple responses; the FDA found some corrective actions appeared adequate but identified remaining deficiencies, including documentation gaps in a media fill summary.
Empower’s CEO has stated that the company takes compliance seriously, has remediated many issues, and continues to work cooperatively with the FDA while prioritizing patient access to quality compounded products.
Earlier warning letters (dating back to 2017) and state board actions form part of the regulatory history referenced in the litigation.
503A vs. 503B Rules and Patent Considerations
Understanding the distinction between 503A and 503B facilities is essential.
- 503A pharmacies generally compound patient-specific prescriptions and are exempt from certain new-drug approval, CGMP, and labeling requirements if they meet all statutory conditions (including valid prescriptions for identified patients and limits on essentially copying commercially available products).
- 503B outsourcing facilities may produce larger quantities, must register with the FDA, follow CGMP, and face more direct federal oversight. They cannot routinely compound essentially copies of approved drugs outside shortage or specific bulk-substance list conditions.
After the tirzepatide and semaglutide shortages ended and enforcement discretion periods expired, the legal pathway for large-scale “copy” compounding narrowed significantly. Pharmacies that continue to produce high volumes of near-identical formulations face heightened risk of FDA action characterizing the products as unapproved new drugs.
Lilly’s lawsuit focuses primarily on advertising and unfair competition rather than direct patent infringement claims against Empower in the reported Texas case. Broader industry litigation has involved intellectual property and exclusivity issues surrounding GLP-1 receptor agonists. Market exclusivity for certain tirzepatide products extends into at least 2027 in some contexts.
Implications for Patients, Providers, and the Industry
Patients who relied on compounded tirzepatide during shortages now face reduced availability and higher costs for branded alternatives. Those still receiving compounded versions should discuss with their prescribers whether the formulation remains appropriate, whether documentation of a significant clinical difference exists, and what transition options are available. Compounded drugs are not FDA-approved and do not undergo the same pre-market review for safety, effectiveness, and quality.
Healthcare practitioners and telehealth providers must ensure prescriptions meet 503A requirements, including individualized clinical determinations. Marketing claims about safety, efficacy, or equivalence to approved products carry risk under both FDA rules and private false-advertising theories.
Pharmacy owners and 503B operators face intensified scrutiny of production scale, documentation of clinical need, environmental monitoring, and media fills. Investors tracking the compounding sector should monitor ongoing state-law claims, additional FDA inspections or warning letters, and any proposed rulemaking that could further restrict bulk compounding of specific GLP-1 active ingredients.
The broader legal landscape includes similar suits by Lilly and Novo Nordisk against other compounders and telehealth platforms. Courts have issued mixed rulings, with some Lanham Act claims surviving and others dismissed for lack of standing or causation.
What Comes Next
The Empower Pharmacy lawsuit remains active on the surviving multi-state unfair competition claims. Further dispositive motions, discovery disputes, and potential summary judgment practice will shape the outcome. FDA enforcement continues independently; warning letters signal expectations for corrective action and can precede seizures, injunctions, or other remedies if issues persist.
Patients and providers should rely on current FDA guidance regarding compounding after shortage resolution and consult qualified counsel or regulatory experts for facility-specific compliance questions. Legal and regulatory developments in this space move quickly.
Conclusion
The Empower Pharmacy lawsuit and related FDA actions highlight the tension between patient demand for affordable GLP-1 options and the statutory limits on compounding once shortages end. Judge Lake’s April 2026 ruling narrowed Lilly’s federal claims while allowing certain state-law theories to proceed. Multiple FDA warning letters underscore ongoing concerns about scale, documentation, and sterile production practices.
Understanding the current rules under Sections 503A and 503B, the end of shortage-based flexibility, and the status of private litigation helps stakeholders navigate access, compliance, and risk. Anyone relying on or prescribing compounded tirzepatide or similar products should stay informed of official FDA updates and seek individualized medical and legal advice.
Frequently Asked Questions
What is the current status of the Eli Lilly lawsuit against Empower Pharmacy?
In April 2026, a federal judge in Texas dismissed the Lanham Act false-advertising claims and Texas unfair competition claims for failure to adequately allege causation and harm. Claims under certain other states’ unfair competition laws were allowed to proceed. The case remains ongoing.
Has the FDA issued warning letters to Empower Pharmacy?
Yes. Notable recent letters include one dated April 2, 2025 (insanitary conditions and sterile processing observations) and one dated September 18, 2026 (essentially copies of approved GLP-1 products produced in high volume, plus CGMP and insanitary conditions citations).
Can compounding pharmacies still make tirzepatide after the shortage ended?
Routine production of essentially copies of commercially available tirzepatide products is no longer permitted under the shortage exception. Limited patient-specific compounding may still occur if a prescriber documents a significant clinical difference for an identified patient and other 503A conditions are met. Large-scale production carries substantial regulatory risk.
What is the difference between 503A and 503B facilities?
503A pharmacies focus on patient-specific compounding with certain exemptions. 503B outsourcing facilities can produce office-use or larger batches but must register with the FDA, follow CGMP, and meet stricter conditions. Both face restrictions on essentially copying approved drugs outside specific exceptions.
Are compounded GLP-1 medications FDA-approved?
No. Compounded drugs are not reviewed or approved by the FDA for safety, effectiveness, or quality in the same way as commercially manufactured products.
What should patients currently taking compounded tirzepatide do?
Speak with your prescribing clinician about the continued appropriateness of the compounded product, available branded alternatives, insurance coverage, and any need for transition. Do not stop prescribed medication without medical guidance.
Does the lawsuit involve patent infringement?
The primary Texas case against Empower centers on false advertising and unfair competition claims rather than patent infringement. Broader industry disputes have included intellectual property issues.
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