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Western District Of Texas Dismisses Antitrust Claims Against Pharmaceutical Firms
08/18/2026On August 5, 2026, the U.S. District Court for the Western District of Texas dismissed pharmaceutical manufacturer Strive Specialties’ antitrust claims alleging that Eli Lilly and Novo Nordisk unlawfully excluded it from the market for glucagon-like peptide-1 (GLP-1) medications. Strive Specialties Inc. v. Eli Lilly & Co., et al., No. 5:26-CV-00155-MA (W.D. Tex. Aug. 5, 2026). Plaintiff accused defendants of foreclosing competition through exclusive dealing arrangements with telehealth providers, in violation of Section 1 of the Sherman Act and Section 3 of the Clayton Act. Plaintiff also asserted a monopolization claim against Eli Lilly under Section 2 of the Sherman Act. Judge Micaela Alvarez dismissed the allegations with prejudice, holding that plaintiff’s compounded GLP-1 medications are not reasonably interchangeable with defendants’ branded drugs and thus fall outside the relevant market, precluding antitrust liability. The court also found that plaintiff failed to adequately allege an antitrust injury.
Plaintiff manufactures compounded drugs and specializes in compounded GLP-1 medications. Compounded drugs are variants of FDA-approved drugs produced by mixing or altering active ingredients to meet the specific needs of patients for whom branded drugs are not suited. Unless the FDA declares a shortage of a particular drug, compounding pharmacists may produce only limited quantities based on a healthcare provider’s finding that the compound is necessary to treat patients.
Telehealth providers account for a significant portion of compounded GLP-1 drug prescriptions, and many compounding pharmacists have capitalized on the rise of telehealth to scale their businesses. Plaintiff alleged that defendants cut off this critical market segment through partnerships with telehealth providers that barred those providers from sourcing compounded GLP-1 drugs from compounding pharmacies. The alleged restriction applied even when a physician had written a prescription for a compounded drug. Because telehealth providers allegedly account for roughly half of all cash-pay GLP-1 prescriptions, plaintiff contended that the agreements substantially foreclosed patient and provider access and artificially suppressed demand for compounded drugs.
Plaintiff also alleged that defendants sent warning letters to healthcare providers suggesting that prescribing compounded GLP-1 drugs could be illegal and compounded medications publicly maligned as dangerous and untested. In addition, defendants allegedly exploited their influence over accreditation bodies and regulators to suppress online information about compounded drugs and disrupt plaintiff’s relationships with patients.
To state an antitrust claim, plaintiffs must describe at least one relevant market—consisting of both a relevant geographic market and relevant product market—in which competition was allegedly harmed. Plaintiff asserted a nationwide geographic market, which defendants did not contest.
The court’s decision turned on plaintiff’s definition of two product markets: (1) a national market for GLP-1 medications, and (2) a national submarket for those medications purchased for cash by out-of-network patients. Defendants, reasoning that plaintiff alleged no unlawful conduct with respect to the broader market, focused their arguments on the proposed submarket.
Defendants argued that the alleged submarket was both under-inclusive, because it improperly divided the broader market based on payment method, and over-inclusive, because it included compounded GLP-1 medications in the same market as their branded products. Defendants contended that compounded and branded GLP-1 drugs are not substitutable and are therefore not part of the same market.
Without reaching defendants’ under-inclusivity argument, the court found that both proposed markets were over-inclusive. By law, compounded GLP-1 medications are ordinarily prescribable only when a healthcare provider finds them medically necessary because a branded medication cannot meet a patient’s unique needs; the use of compounded drugs versus branded drugs is not driven by ordinary consumer preference. The court reasoned that they are not reasonably interchangeable products, and plaintiff consequently failed to plausibly state either a broader GLP-1 market or a submarket.
Although the failure to plead a relevant market was dispositive, the court briefly addressed antitrust injury and concluded that plaintiff’s allegations amounted to its own harm as a market participant, not harm to the competitive market.
Plaintiff also asserted an exclusive-dealing claim under Section 3 of the Clayton Act. Because plaintiff grounded this count on identical allegations, it was dismissed alongside the unsuccessful Sherman Act claims.
Antitrust Litigation