The retatrutide lawsuit, and why it matters for GLP-1 prices

What the lawsuit is about

Lilly wants its next obesity drug regulated as a biologic rather than a drug. The FDA has said no twice, and the fight is now in a federal appeals court.

• The drug. Retatrutide is an experimental injection that acts on three hormone receptors: GLP-1, GIP and glucagon. Lilly is developing it for obesity, sleep apnea, knee osteoarthritis and type 2 diabetes. It isn’t approved yet.^1,10
• The request. In January 2024, Lilly formally asked the FDA to classify retatrutide as a biologic. In March 2024, the FDA said it’s a drug.^1,2
• The lawsuit. In September 2024, Lilly sued the FDA and the Department of Health and Human Services in federal court in Indianapolis. The case is Eli Lilly and Company v. Kennedy, named for Health and Human Services Secretary Robert F. Kennedy Jr.¹
• Why it matters beyond one drug. The case tests where the line between drugs and biologics falls for peptides like retatrutide. Dr. Alex Tatem, a urologist, worries a Lilly win could open the door for other GLP-1 drugs, possibly even semaglutide and tirzepatide.¹⁰

It comes down to 40 amino acids

The law treats proteins as biologics, and the FDA’s rule says a protein has more than 40 amino acids. Retatrutide is right at that line, and the two sides count it differently.

• The FDA’s count: 40. Retatrutide has a main chain of 39 amino acids, plus a short side chain with two more building blocks. The FDA counts only alpha amino acids, the standard kind natural proteins are made of. That gives at most 40, one short of the 41 needed.¹
• Lilly’s count: 41. The rule measures size by the “total number of amino acids,” so Lilly says the side chain’s second, non-standard building block counts too.^1,11
• Some familiar hormones are already over the line. When the rule took effect in March 2020, insulin, human growth hormone and reproductive hormones such as hCG became biologics.^12,13 So did tesamorelin (Egrifta), which has more than 40 amino acids.²
• The key word comes from Congress. The law lists “protein” as one kind of biologic. Congress added the word in 2009, and in 2019 it removed an exception for lab-made peptides. The 40-amino-acid line is how the FDA defines the word.^1,9

What biologic status would change for you

Cheaper copies would come years later, pharmacies couldn’t make it at all, and Medicare would wait longer to negotiate its price.

• 12 years before cheaper copies, not 5. A new drug is protected from generic copies for 5 years. A new biologic is protected for 12 years before a cheaper copy, called a biosimilar, can be approved.^4,5 Patents can add time in either case, but this protection is a guaranteed minimum. Medical Daily estimates biologic status would delay cheaper competition for retatrutide by about 7 years.¹⁴
• Generic copies get cheap fast. In an FDA study, generic prices were 39% below the brand’s with one generic maker, 79% below with four, and 99% below with ten or more.¹⁵ Biosimilars lower prices too: they cut Medicare’s spending on those drugs by about 62% in 2023. But unlike a generic, a biosimilar usually can’t be swapped in at the pharmacy without the prescriber’s OK, unless it’s rated interchangeable.¹⁶

• No pharmacy-made versions, even in a shortage. When tirzepatide and semaglutide ran short, the law let pharmacies make copies until the FDA declared the shortages over in 2024 and 2025.¹⁷ A biologic can’t be compounded (made by a pharmacy) at all.⁶
• 4 more years before Medicare can negotiate. Medicare can negotiate a drug’s price once “at least 7 years” have passed since approval. For a biologic, the law says “at least 11 years.”⁷ Semaglutide (Ozempic and Wegovy), which is regulated as a drug, already has a negotiated Medicare price: starting in 2027, $274 for a 30-day supply, 71% below its $959 list price.¹⁸

It’s happened before: hCG in 2020

The hormone hCG, widely used in men’s health and fertility care, went from drug to biologic in March 2020, and pharmacies had to stop making it.

• What changed. On March 23, 2020, hCG and a few other hormones became biologics, and compounding pharmacies could no longer make them.¹³
• What patients saw. Dr. Tatem says a vial of compounded hCG used to cost about $50 to $80. Brand-name versions cost five to seven times as much, and some ran short. Dr. Tatem’s conclusion: the switch made hCG more expensive and harder to get, but no safer.¹⁰
• To be fair, the same change gave older products like insulin a faster path to cheaper biosimilar versions.¹² Retatrutide isn’t approved yet, so there’s nothing to copy. For a new medicine, biologic status mostly means a longer wait before copies are allowed.

Lilly’s side of the argument

Lilly says retatrutide fits the FDA’s own definition of a protein, and that the FDA missed its deadline to decide.

• Count every amino acid. The rule uses the word “alpha” only once, at the start. Lilly argues that everywhere else it just says “amino acids,” so every amino acid counts, standard or not. Lilly also argues the law doesn’t limit proteins to the kind found in nature.¹¹
• A missed deadline. The law gives the FDA 60 days to answer a classification request. If it doesn’t answer in time, the company’s own recommendation takes effect. Lilly argues that once the court threw out part of the FDA’s answer, the deadline had already passed.^1,11
• The judge sided with Lilly on one point. The court threw out the FDA’s reasoning that retatrutide isn’t even “analogous” to a protein. But it upheld the FDA’s 40-amino-acid reading of “protein,” and the FDA has since reached the same answer again.^1,2
• In court, the fight is over wording. Lilly’s court filings are about the rule’s wording and the deadline. Critics, including a GLP-1 patient advocate writing in Reason, say the real-world effect would be less competition and higher prices for longer.¹⁹

Where the case stands

The FDA has now said twice that retatrutide is a drug. A federal appeals court heard arguments in September 2026 and hasn’t ruled yet.

1. Jan 2024

   Lilly asks the FDA to classify retatrutide as a biologic.^1,2

2. Mar 2024

   The FDA says it’s a drug. Counting only alpha amino acids, retatrutide has at most 40, and a protein needs more than 40.¹

3. Sep 2024

   Lilly sues the FDA and HHS in federal court in Indianapolis.¹

4. Sep 2025

   The judge agrees retatrutide isn’t a protein under the FDA’s rule, but throws out the FDA’s reasoning that it isn’t even “analogous” to one, and sends that question back to the agency.¹

5. Feb 2026

   Lilly appeals to the U.S. Court of Appeals for the Seventh Circuit. It argues retatrutide is a protein, and that because the FDA’s 60-day deadline had passed, Lilly’s own classification should stand.^8,11

6. Sep 2026

   The appeals court hears arguments, then asks both sides whether it can hear the appeal at all.²⁰

7. Oct 2, 2026

   The FDA decides again that retatrutide is a drug, not a biologic.²

8. Oct 8, 2026

   The government argues Lilly can’t appeal an order that sent the case back to the FDA. Lilly argues it can: if the FDA could have appealed that order, so can Lilly.^20,21

9. Next

   The appeals court’s decision is still to come. Separately, Lilly plans to apply for FDA approval of retatrutide in early 2027.¹⁹

Our view: keep retatrutide a drug

We think retatrutide, and peptides built like it, should stay drugs. Biologic status would add years of protection from competition without making the medicine any safer or more effective.

• Keep the line where it is. The FDA drew it at more than 40 alpha amino acids, and the court upheld that reading. Letting one non-standard building block tip a peptide over would invite every company with a peptide near the line to try the same.^1,3
• Patients and taxpayers pay for every year of delay. Medicare spent more on semaglutide than on any other drug in its negotiation round: $15.2 billion in 2024, for about 2.3 million people.¹⁸ Without competition or negotiation, there’s little to bring a price like that down.
• Shortages happen. When GLP-1 drugs ran short, pharmacies could legally fill the gap. A biologic would have no such backstop.^6,17
• Innovation would still be rewarded. As a drug, retatrutide would still get 5 years of exclusivity, plus whatever patents Lilly holds.⁵

Tell your senators what you think

The court will decide what today’s law means. Congress can change the law: it wrote this part in 2009 and changed it in 2019. Tell your senators what you want to happen.

Why call? Dr. Tatem’s answer: it takes about five minutes, and technical fights like this one are usually decided by whoever is paying attention, which right now is mostly drug companies and their lobbyists.¹⁰

• Find your two senators. Pick your state on the Senate’s contact page (opens in a new tab) to get each senator’s phone number and web form.²²
• Add your representative. Dr. Tatem suggests calling your member of the House too. Enter your ZIP code on the House website (opens in a new tab) to find yours.^10,23
• Call or write. The U.S. Capitol switchboard, (202) 224-3121, can connect you to any of these offices. Tell whoever answers that you’re a constituent, and give your city or ZIP code.^22,23
• Keep it simple. On a call, a sentence or two is enough: you care about the cost of GLP-1 drugs, and you oppose reclassifying them as biologics. For a letter or web form, use the message below. If you see it differently, tell them that instead.¹⁰

This section is our opinion on a public policy question, based on the sources below. It isn’t legal advice.

Sources

Court documents and government sources are quoted word for word. Tap a number anywhere on this page to see its source.