The meteoric rise of telehealth has created new ways for patients to access weight‑loss medications and coaching from the comfort of their homes. Drugs that target the GLP‑1 receptor such as semaglutide (Ozempic) and tirzepatide (Mounjaro and Zepbound), are proving highly effective for weight management and have been in short supply. To meet demand, some telehealth platforms partnered with compounding pharmacies to offer off‑brand GLP‑1 formulations or mixed these drugs with other ingredients. Now, major drug manufacturers are striking back.
In April 2025, Eli Lilly & Company filed four lawsuits in the U.S. District Court for the Northern District of California against telehealth providers including Fella Health, Willow Health, Henry Meds and Mochi Health. The suits follow earlier complaints against compounding pharmacies and allege that these companies are selling illegal copies of Lilly’s FDA‑approved weight‑loss drugs without regulatory approval. Lilly claims the firms falsely advertise the products as safe and “personalised†when in fact they are mass‑produced compounded medications that have not been clinically tested.
Below we unpack why these lawsuits were filed, what laws are at play and how compliant telehealth programs can protect patients while preserving the promise of virtual obesity care.
Why GLP‑1 Drugs Matter and Why Compounding Emerged
Drugs like semaglutide and tirzepatide mimic the GLP‑1 hormone to regulate blood sugar and reduce appetite. Tirzepatide in particular activates both GLP‑1 and glucose‑dependent insulinotropic polypeptide (GIP) receptors, improving control of blood sugar and reducing appetite and food intake. During the pandemic, these medicines became sought‑after for diabetes and weight management. A two‑year shortage allowed compounding pharmacies to legally prepare tirzepatide under FDA rules. Once the shortage ended in December 2024, compounding pharmacies were required to stop producing the drug, yet some continued.
Compounding can have a legitimate place in care, pharmacists customize medications when a patient needs a different strength or is allergic to an inactive ingredient. However, compounded drugs do not undergo the same rigorous testing for safety, efficacy and quality as FDA‑approved products. Critics argue that marketing compounded GLP‑1s as “personalised†may mislead patients into believing they are safer or more effective when, according to Lilly’s lawsuits, these versions are often mass‑produced copies.
What the Lawsuits Claim
The recent lawsuits go beyond safety and efficacy. Lilly asserts that the telehealth companies have violated both federal and state laws:
- Unfair competition and false advertising: The companies allegedly marketed compounded tirzepatide as safe, FDA‑approved or “personalized,†while using Lilly’s clinical data and trademarks to promote unapproved drugs. Lilly says this violates California’s Unfair Competition Law and the federal Lanham Act, which prohibits false or misleading advertising
- Corporate Practice of Medicine (CPOM) violations: Lilly claims the platforms allowed non‑physician founders and executives to influence prescribing decisions, alter dosages and control hiring and firing of clinical staff. California’s CPOM doctrine forbids corporations owned by non‑physicians from practicing medicine or employing physicians. The complaints allege that unlicensed managers exercised undue control over medical decisions.
- Unlawful prescription practices: The lawsuits assert that prescriptions were changed or dosages altered without proper medical examination or clinical indication, violating state laws requiring a good‑faith exam before prescribing.
These allegations mirror claims in broader litigation against compounding pharmacies, which have been accused of continuing to produce tirzepatide after the shortage ended and falsely marketing the drugs as personalized versions when they are not. Another recent analysis notes that new lawsuits attack not only corporate control but also the medical necessity of compounded GLP‑1s, arguing that combinations with ingredients like glycine and L‑arginine are not truly personalised and lack a documented clinical need.
Understanding CPOM and the Lanham Act
The corporate practice of medicine doctrine exists to protect the integrity of medical decision making. California law states that corporations or other artificial entities “shall have no professional rights, privileges, or powersâ€. Only licensed physicians may make treatment decisions. When telehealth entrepreneurs or venture‑backed investors own a platform and direct or influence how doctors prescribe, regulators view that as unlicensed practice of medicine. Violations can lead to civil penalties, criminal charges and even suspension or revocation of physician licenses.
The Lanham Act is a federal trademark statute that also covers false advertising. Lilly alleges the telehealth firms violated the act by using its trademarks and clinical data to market unapproved medications. Because telehealth companies operate across state lines, a Lanham Act claim can expose them to federal liability and injunctions, adding another layer of risk beyond state enforcement.
The Broader Implications for Telehealth Weight‑Loss Services
- Heightened regulatory scrutiny: Big Pharma’s litigation signals a willingness to challenge telehealth models that appear to shortcut drug development and regulatory approvals. It also invites state medical boards and attorneys general to examine whether telehealth platforms respect CPOM laws and good‑faith exam requirements
- Liability for business owners and clinicians: If courts find that non‑physician executives directed medical care or altered prescriptions, both the company and individual prescribers could face professional discipline. Telehealth providers must ensure that clinical judgement remains squarely with licensed physicians.
- Reputational and trust risks: Weight‑loss patients are often vulnerable and eager for solutions. Allegations of false advertising or patient harm can erode public trust and make consumers skeptical about telehealth platforms. Transparent marketing and ethical prescribing are essential to maintain credibility.
- Potential ripple effects: The lawsuits may encourage other manufacturers to pursue similar actions. Novo Nordisk has already sued several compounding pharmacies and telehealth companies over semaglutide knockoffs. Insurance companies may also scrutinize coverage of compounded drugs, affecting reimbursement for telehealth weight‑loss programs.
Best Practices for Compliant Telehealth Weight‑Loss Programs
Telehealth remains a powerful tool to expand access to obesity care when used responsibly. Providers and platform founders can reduce legal risk and protect patients by adhering to these principles:
- Keep physicians in charge. Ensure licensed physicians perform good faith examinations, review medical history and determine whether GLP‑1 therapy is clinically appropriate. Non‑physicians should not make or influence treatment decisions.
- Use FDA‑approved products and evidence‑based protocols. If offering weight‑loss medications, work with licensed pharmacies to dispense FDA‑approved formulations and follow dosing guidelines supported by clinical trials. Where possible, integrate lifestyle coaching and nutrition counseling instead of relying solely on drugs.
- Separate business and clinical functions. Many telehealth companies use an MSO‑PC (Management Services Organization–Professional Corporation) model. Maintain a clear separation: the PC should be owned by physicians and control all medical services; the MSO can handle marketing, technology and administration. Document this separation to demonstrate compliance.
- Be honest in advertising. Marketing materials must accurately describe the nature of the medications provided and avoid implying FDA approval or customization if it is not true. Do not use manufacturers’ trademarks or clinical data without permission.
- Educate patients about risks. Clearly explain the difference between FDA‑approved and compounded drugs, potential side effects and realistic expectations for weight loss. Encourage patients to ask questions and report adverse reactions.
- Stay abreast of state laws. CPOM and telehealth regulations vary by state. Some states require specific disclosures or consent forms, while others have strict prohibitions on corporate ownership of medical practices. Monitor legislation and consult legal counsel to remain compliant.
Conclusion: Compliance Is the Path Forward
The legal backlash against telehealth weight‑loss programs selling compounded GLP‑1 drugs is a wake‑up call for the industry. While patients deserve convenient access to effective therapies, the shortcuts some providers have taken: mass producing unapproved drugs, letting executives dictate care and exaggerating claims, put both patients and companies at risk. By understanding the allegations under the Lanham Act and state CPOM laws, telehealth providers can design business models that respect physician autonomy, uphold scientific integrity and earn the trust of patients and regulators.
At MomentMD, we believe virtual care can unlock new horizons for obesity treatment when built on a foundation of compliance and patient safety. Our network connects providers, patients, medical students, universities, and healthcare organizations with best‑in‑class telehealth experiences. We encourage universities, clinicians and digital health innovators to share this post and join the conversation about ethical telehealth practices. To learn more about emerging telehealth trends and compliance strategies, explore our Telehealth Insights hub and subscribe to our newsletter.