| Dave Ricks is incensed. The CEO of drugmaker Eli Lilly, the first health care company to reach a $1 trillion market cap, is fighting back against black-market copycats of an obesity drug it hasn’t even released yet. But the overseas shipments keep coming. “It’s really a ridiculous situation that’s being allowed to continue,” Ricks said at a recent lunch with reporters. “It’s not approved for use anywhere in the world. It’s the most powerful weight loss medication ever invented. This is an absurd situation.” The industry says that Chinese manufacturers are fueling the access to bootleg versions of retatrutide, Eli Lilly’s experimental weight loss drug that’s shown in clinical trials to help people lose even more weight than results from its GLP-1 offering Zepbound. It is still in development and has not been approved by the Food and Drug Administration. But that hasn’t stopped Americans from taking it, sourcing it from places including online vendors and med spas. The Wall Street Journal reported last month about Ohio’s attempt to crack down on the sale of these products and the increase in inspections of wellness clinics and medical spas in the state and how prolific the sellers are. On Thursday, Eli Lilly sued five companies allegedly selling illicit retatrutide copycats: American Peptides, LiveWell Peptides, Cenexa Labs, Medrein Health & Aesthetics and Medshape Weight Loss Clinic. The companies could not immediately be reached for comment. The latest cases follow six lawsuits that Eli Lilly filed in August against compounding pharmacies, medical spas and online sellers, including Texas Peptides and Striker Pharmacy. “A couple of them have already shut down and moved to a different P.O. Box and set up a new LLC and are doing business just the same as before,” Ricks said about some of the six companies Eli Lilly sued in August. “We’re not in a position to really stop them.” A spokesperson for Eli Lilly tells me that it has reached settlements in two of those previous suits, including with Texas Peptides, where companies agreed to no longer sell the products and to advise customers who’ve been taking counterfeit retatrutide to stop. As part of the settlement, Texas Peptides also agreed to donate an undisclosed amount to America’s Poison Centers, Eli Lilly says, to help support the increase in calls from people who’ve taken the black-market drugs. The Texas Peptides Inc. website is no longer available. Ricks says social media companies have been helpful in policing advertisements for illicit retatrutide. He told reporters that Eli Lilly is receiving “good cooperation from private entities” and is trying to work with shipping companies and payment processors — but the murky nature of the market and sellers makes oversight difficult. - FDA and DOJ crack down: The FDA has sent warning letters to peptide sellers that are marketing retatrutide as products “for research purposes only” when materials clearly indicate that they’re meant for human use. The agency has also said retatrutide cannot legally be used in compounding. However an investigation by Public Citizen released in June showed that many cited by the FDA kept selling the products afterward.
- The Department of Justice has pursued at least two criminal cases in Utah and Florida related to allegations against individuals illegally selling retatrutide.
Ricks says the FDA could be doing more and should eliminate its so-called green list that allows certain foreign peptide manufacturers to avoid import restrictions without making the products themselves FDA-approved. “They’re smart people, and they know it’s still happening,” Ricks said of FDA officials, arguing that the DOJ should also prioritize going after these sellers. “People that are in this business probably only respond to someone cuffing them,” Ricks said. “That’s what needs to start happening.” The FDA and DOJ did not respond to requests for comment. The health care industry is drawing a line over how much the federal government should get into the business of providing health insurance, with insurers warning against a public option and a major physicians society arguing it could help achieve universal coverage. It comes as Democrats on the Senate Finance Committee are leading an effort to overhaul how Americans get health care coverage. Sen. Ron Wyden (Oregon), the committee’s top Democrat, released a request for information on the topic, asking for ideas on lowering costs, improving access and considering Medicare-like coverage options. Democratic committee staffers have said it’s meant to spur ambitious “blue sky” thinking and lay the groundwork for policies that could move if Democrats regain control of Congress and the White House following the 2028 presidential election. Why it matters: Even though the target date for these plans is in the longer term, it’s a crucial part of moving big changes through Congress. The responses could ultimately shape whether lawmakers attempt to move proposals for a single-payer, Medicare-for-all or government option as part of a health reform effort. And it should be noted that a Senate Finance Committee Democratic white paper published in November 2008 ultimately served as the foundation for the Affordable Care Act enacted less than two years later. → The committee tells me it has received more than 400 submissions to the request for information, including from think tanks and researchers, hospitals, patient groups, employers and unions, and state and local governments, among others. - AHIP, the insurance industry’s main trade group, used part of its 41-page response to argue that lawmakers should focus on the cost of care, not expand the government’s role in coverage.
A public option would “shift costs, stifle competition and threaten coverage that many Americans want to keep,” AHIP argued. “States that have attempted to enact new statewide government-controlled health insurance systems have found them unaffordable and difficult to implement, and similar experiences are likely for any future federal approaches.” The group says a vast majority of commercial premium dollars go toward hospital-based services, prescription drugs, physician fees and other medical services, making provider prices the real target for affordability reforms. “Arbitrary premium reduction requirements or expanded benefit mandates untethered to lower medical costs will not make healthcare more affordable,” AHIP said. Instead, the insurance industry wants Congress to strengthen existing insurance coverage, including by reviving a version of the enhanced Affordable Care Act premium tax credits that expired last year, while expanding marketplace options and strengthening the employer-sponsored health insurance market. - The American College of Physicians offered a different vision in its response. As part of its slate of options provided to the committee, the society says the country could pursue universal coverage through either a single-payer financing system or a publicly financed insurance option alongside regulated private plans.
Both options, it argues, have pros and cons. The American College of Physicians focused on ensuring that, regardless of the direction policymakers choose, doctors are paid appropriately and lawmakers avoid perpetuating what the group calls Medicare’s “flawed” payment system. A single-payer approach could reduce administrative costs and eliminate uncompensated care, but it could disrupt the health care industry and constrain physician autonomy, the group argued. A public option, the group said, could expand coverage and competition with less disruption, though it would retain the complexity of the current system and require price controls to keep costs down. The American College of Physicians says either approach offers the best opportunity to achieve universal coverage, provided physician payments remain adequate and patients can access needed care. The AAMC says it has “not taken a position on a specific universal coverage model (public option, Medicare/Medicaid buy-in, or single payer), though we strongly support ensuring access to comprehensive and affordable coverage.” The others avoid the topic entirely, and all of them emphasize that lawmakers should focus on strengthening the existing system. The hospital industry is back in court over the Trump administration’s plans to overhaul how providers receive discounts through a federal discount drug-pricing program, warning the changes could saddle safety-net hospitals with more than $1 billion in annual administrative costs. The American Hospital Association, the Maine Hospital Association and four hospitals on Friday sued the Department of Health and Human Services in federal court in Maine, challenging a revised rebate model for the 340B drug-pricing program that is set to take effect at the beginning of next year. → The 340B program was designed to enable safety-net providers that treat a large number of low-income or uninsured patients to stretch limited resources by compelling drugmakers to provide steep discounts on medication. Under the traditional model, providers receive discounts upfront. The new alternative would require drugmakers to pay rebates after hospitals purchase a selected 21 drugs at full price, creating new administrative work and potential cash-flow pressures. - “Maine hospitals cannot afford this rebate program,” said Jeff Austin, president of the Maine Hospital Association, adding that hospitals in the state “already operate with an average of less than two weeks’ cash-on-hand.”
Hospitals say the shift could divert money from patient care, including rural health services, behavioral health and cancer treatment. Critics, including policymakers on Capitol Hill and drugmakers, argue that the 340B program is being abused by some facilities to bolster profits or subsidize other operations without benefiting patients. → The push-and-pull between hospitals and drug companies has been growing more tense as 340B has ballooned into a $100 billion program, up from about $44 million in 2021. And the Health Resources and Services Administration, which oversees the 340B program, points to the massive growth in the last several years in creating the pilot. - The pilot is meant to help “modernize program oversight by improving visibility into 340B transactions,” said HRSA Administrator Tom Engels.
Why it matters: The lawsuit sets up another legal test of whether the Trump administration adequately considered the financial and operational consequences for providers before changing how the program works. Hospitals filing the suit are alleging that HHS moved forward with a revised model without fully addressing hospitals’ cost estimates or alternatives they proposed to improve transparency and program integrity. - HRSA attempted a similar rebate program last year, but federal courts halted it because they said regulators had failed to adequately account for the costs hospitals would face.
- The administration subsequently revised the proposal but kept the rebate approach.
“When the government makes a change of this magnitude, it must fully consider what it will mean for the patients and communities that rely on 340B hospitals every day,” Steve Walsh, president and CEO of the American Hospital Association, said in a statement. HHS didn’t immediately comment on the suit. “Hospitals are closing across America, and it’s only getting worse,” The Post’s Daniel Wu reports. “AI, Tech Leaders Are Lobbying Trump Health Officials in a Government-Run Chat Room,” report Amanda Seitz, Maia Rosenfeld, and Darius Tahir at KFF Health News. “Acting general counsel at HHS has left the department,” Max Bayer reports at Endpoints News.
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