Eli Lilly and Company v. Adonis Health, Inc.

Background

Eli Lilly and Company develops, manufactures, and sells FDA-approved medications including Mounjaro and Zepbound. Adonis Health, Inc., doing business as Henry Meds, operates a telehealth platform that markets compounded versions of FDA-approved medications. Lilly alleged that Henry Meds marketed and sold compounded tirzepatide products and made misleading statements comparing those products with Lilly’s medications.

Lilly asserted three causes of action: unfair competition under California’s Unfair Competition Law, false advertising under California’s False Advertising Law, and false or misleading advertising under the Lanham Act. Lilly alleged that Henry Meds falsely represented its products as safe and effective and advertised them as individualized, tailored, or patient-specific even though, according to Lilly, patients received the same standard treatment plan and mass-produced products.

Henry Meds moved to dismiss, arguing that Lilly lacked standing under the Lanham Act and California statutes and failed to adequately plead false advertising or unfair or fraudulent conduct. Henry Meds also asked the court to consider material from its corporate website as incorporated into the complaint. The court denied that request, stating that it did not consider a document judicially noticeable merely because it appeared on a publicly available website.

Lanham Act and California Standing

The court held that Lilly adequately alleged standing under the Lanham Act. It found that Lilly and Henry Meds were direct competitors in the market for tirzepatide-containing medications because they marketed and sold such products to similar potential customers. The court also found that Lilly plausibly alleged financial injury by asserting that Henry Meds’ advertising diverted consumers from Lilly’s Mounjaro and Zepbound products.

The court likewise found that Lilly adequately alleged monetary harm sufficient to establish standing under California’s Unfair Competition Law and False Advertising Law.

Safety-and-Effectiveness Statements

Lilly alleged that Henry Meds falsely advertised its medications as safe and effective and made related statements about the products’ effects and ingredients. The court determined that these allegations amounted to claims that Henry Meds lacked scientific substantiation for its statements, rather than allegations that the statements were actually false.

Because a false-advertising claim cannot rest solely on a lack of supporting scientific evidence, the court held that Lilly failed to state claims based on the safety-and-effectiveness statements. The court dismissed Lilly’s Lanham Act, Unfair Competition Law, and False Advertising Law claims to the extent they were based on those statements.

Personalization Statements

Lilly also alleged that Henry Meds falsely advertised individualized treatments, tailored treatments, and patient-specific medications while providing the same pre-made dosage and treatment schedule to every patient. The court held that these allegations plausibly described literally false advertising. It rejected Henry Meds’ argument that compliance with federal drug-compounding requirements resolved whether its advertising statements were false.

The court also held that these claims were not preempted by the Federal Food, Drug, and Cosmetic Act because Lilly’s allegations focused on whether the advertising was false, not on whether Henry Meds violated federal drug-compounding requirements. The court further held that Lilly adequately pleaded its related California claims and did not need to show consumer reliance at this stage.

Disposition

The court granted in part and denied in part Henry Meds’ motion to dismiss. The motion was granted as to statements that Henry Meds’ products were safe and effective and denied as to statements that the products were personalized. Lilly may file an amended complaint within 21 days, solely to cure the deficiencies identified in the order. If Lilly does not amend, the case will proceed solely on the personalization claims.