Eli Lilly And Co (LLY) shares slipped Thursday after the pharmaceutical giant and rival Novo Nordisk (NVO) were hit with an antitrust lawsuit in Texas. The suit, filed by compounding pharmacy Strive Specialties, accuses both companies of illegally blocking access to customized versions of their wildly popular weight-loss drugs.

The Fight Over Compounded GLP-1 Drugs

Strive filed the complaint Wednesday in federal court in San Antonio, claiming Lilly and Novo are leveraging their dominance in the GLP-1 market to shut out lower-priced compounded alternatives, according to Reuters.

It's no secret that demand for GLP-1 medications like Ozempic, Wegovy, Mounjaro and Zepbound has gone through the roof. The two pharmaceutical companies aren't just competing with each other anymore—they're also fighting off compounding pharmacies that make tailored versions of these drugs during shortage periods.

The lawsuit alleges Lilly and Novo cut exclusive deals with major telehealth platforms that effectively prevented doctors from prescribing compounded GLP-1 medications, even when patients needed specific doses or formulations. Strive also claims Lilly actively worked to discredit compounded drugs as unsafe and meddled with the pharmacy's relationships with payment processors and technology partners.

Lilly fired back, calling Strive's allegations "wrong on both the facts and the law." Strive is seeking monetary damages plus a court order that would stop both companies from enforcing the alleged exclusivity agreements.

LLY Price Action: Eli Lilly shares were down 3.67% at $1,033.94 at the time of publication Thursday.