Eli Lilly (LLY.US) wants generic drug users to provide medical records. Intending to start a war against "generic version of weight loss drugs"?

US pharmaceutical giant Lilly recently requested users of its popular weight loss drug to provide their medical records to the company for safety reasons, which may be to crack down on companies or pharmacies selling generic versions of the drug. Some compounding pharmacies have utilized a law that allows them to sell generic versions of Lilly's popular weight loss drugs Zepbound and Mounjaro when the original version is in short supply. Although Lilly has questioned the quality of these products and some state inspections have found concerning practices, the pharmacies have stated that they are compliant with the law and helping Americans get the medication they need. "We recently learned that you obtained one of our products from a compounding pharmacy," Lilly wrote in a letter. "We would appreciate it if you could fill out the enclosed form and sign a medical information release authorization so that we can obtain more detailed information about your experience from your treating physician." A spokesperson for Lilly confirmed the authenticity of this letter and stated that it is part of the company's ongoing efforts to monitor the market and evaluate the safety of its drugs. The spokesperson mentioned that Lilly sometimes contacts individuals who have had previous interactions with the company but did not provide further details. Lilly and its main competitor in the weight loss drug field, Novo Nordisk A/S Sponsored ADR Class B, have long experienced shortages of their weight loss drugs and have taken actions to combat medical spas, private doctors, and some compounding pharmacies that sell or promote generic drugs. However, many pharmacies and telemedicine companies continue to provide these drugs, relying on federal laws that allow them to compound these drugs during shortages. Conflict between brand and generic drug manufacturers Scott Brunner, CEO of the trade organization Compounding Pharmacy Alliance, expressed astonishment at Lilly's efforts to obtain confidential patient medical records to build a case against therapies benefitting these patients when Lilly's own drugs are unavailable. This letter is the latest sign of intensifying struggles between brand drug manufacturers and companies producing and selling generic versions of drugs. Wall Street investment firms have indicated that the market for compounded weight loss drugs could generate up to $1 billion in revenue for pharmacies. However, Lilly CEO Dave Ricks has not backed down from this fight. Ricks stated in an interview that compounders "use untested, unapproved, and unknown quality and purity substances," although he did not provide documentation to support these claims. "We are using our legal tools to address this and challenge the prescribing doctors." The FDA has listed ongoing shortages of Lilly's drugs since December 2022. Recently, the drug supply situation has improved. Ricks expects these drugs to officially overcome shortages soon and believes that the FDA should take more assistance measures to prevent an increase in compounded generic therapies during this period. Lilly strives to gain more market share in the weight loss drug market Lilly is working in various ways to gain more market share in the current duopoly of "NovoLilly." In June, the company placed full-page advertisements in several national publications, targeting the growing market: "We are making weight loss drugs. But want to make sure you are taking the real thing," the ad read. A recent study found that obese patients using Lilly's weight loss and diabetes treatment drug Mounjaro (core ingredient Tirzepatide) experienced significantly more weight loss than patients using Novo Nordisk A/S Sponsored ADR Class B company's Ozempic (core ingredient Semaglutide). This study is significant for the two pharmaceutical giants battling for dominance in the weight loss drug market as it may lead more obese patients or those attempting to lose weight through injections to turn to Lilly instead of Novo Nordisk, potentially boosting Lilly's stock price. According to Bloomberg Intelligence research data, the market for weight loss drugs like "NovoLilly" is expected to reach at least $80 billion by 2030. Goldman Sachs Group, Inc.'s forecast is even more optimistic, predicting that global annual sales of anti-obesity drugs could reach around $130 billion by 2030, compared to only $6 billion earlier in 2023. The World Obesity Federation (WOF) predicts that by 2035, over 4 billion people (more than half of the world's population) may suffer from obesity to varying degrees. Earlier this week, a spokesperson for telemedicine company Noom Inc. stated that the company has released its own advertisements in response to Lilly's recent comments on compounded drugs. Some compounding pharmacies in the US have stated that they manufacture high-quality weight loss drugs using genuine ingredients provided by legitimate suppliers, and they play a crucial role in providing medication when the FDA-approved version is in high demand and short supply.