Outsourcing Facilities Association et al v. United States Food and Drug Administration et al

Filing 101

OPINION & ORDER: For the reasons set out above, Plaintiffs' 64 Motion for Preliminary Injunction and Stay is DENIED. The undersigned finds it appropriate to file this 100 unredacted opinion under seal. It is ORDERED that, on or before 4:00 p .m., March 7, 2025, the Parties shall submit, via response to the email, an agreed upon version of the order containing any appropriate redactions. After receiving and reviewing the Parties' version, the Court will issue the 101 redacted order. (Ordered by Judge Mark Pittman on 3/5/2025) (saw)

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION
OUTSOURCING FACILITIES
ASSOCIATION, ET AL.,
Plaintiffs,
v.

No. 4:24-cv-0953-P

UNITED STATES FOOD AND DRUG
ADMINISTRATION, ET AL.,
Defendants.
OPINION & ORDER
Before the Court is Plaintiffs Outsourcing Facilities Association’s
and North American Custom Laboratories LLC Partners’ (collectively
“Plaintiffs”) Motion for Preliminary Injunction and Stay (ECF No. 64).
Having considered the briefing and applicable legal authorities, the
Court will DENY Plaintiffs’ Motion.

BACKGROUND
A. Regulatory Background
The Federal Food, Drug, and Cosmetic Act (“FDCA”) generally
prohibits the introduction of a “new drug” into interstate commerce
without the United States Food and Drug Administration’s (the “FDA”)
approval. 21 U.S.C. § 355(a). To obtain FDA approval, a manufacturer
generally must submit a new drug application (“NDA”). Id. § 355(b)(1).
The FDA adjudicates such applications and approves them only if it
finds, based on the evidence before it, that the drug is safe and effective
for its intended use under the conditions of use described in the drug’s
labeling. Id. § 355(c)(1)(A), (d). Once an NDA is approved, facilities
producing the new drug generally must comply with “current good
manufacturing practice[s]” (“cGMP”), which “assure[s] that such drug
meets the requirements of this chapter as to safety and has the identity

and strength, and meets the quality and purity characteristics, which it
purports . . . to possess.” Id. § 351(a)(2)(B); see 21 C.F.R. Pts. 210, 211.
In order to protect patients and ensure efficacy, the FDA’s approval
process is demanding. Each drug seeking the FDA’s approval must be
evaluated through three increasingly complex phases of studies,
typically culminating in double-blind, multi-center, placebo-controlled
clinical trials. The sponsor must detail every ingredient and component
in its application to the FDA. 21 U.S.C. § 355(b)(1)(A)(i)–(viii). The FDA
conducts inspections to ensure compliance with cGMP, id. § 351(a)(2)(B),
reviews the drug’s labeling to ensure appropriate disclosure of side
effects, warnings and contraindications, id. § 352(f)(1)–(2), and monitors
advertising and promotion to ensure it is not misleading, id. §§ 321(n),
352(a)(1), 352(n). The FDA also requires manufacturers to track and
trace each finished product, id. § 360eee-1, to promptly report all
adverse events, id. § 355(k), and to conduct further post-approval
studies, id. § 355(o). Because of the FDA’s rigorous requirements, “[o]n
average, it takes 10-15 years and costs $2.6 billion to develop one new
medicine.” 1
Despite the difficulties in getting new drugs approved, companies
regularly invest in the research and development of new drugs due to
the incentives created by Congress. Relevant here, new chemical entity
exclusivity is earned whenever the FDA approves a new medicine for
the first time. 21 U.S.C. §§ 355(c)(3)(E)(ii), (j)(5)(F)(ii). This statutory
exclusivity means that for five years the FDA is prohibited from
approving another manufacturer’s application for any drug using the
same active moiety. Id.
In addition to subjecting all new drugs to the NDA process, the
FDCA regulates when drug compounding is permitted. Drug
compounding is “a process by which a pharmacist or doctor combines,
mixes, or alters ingredients to create a medication,” is “a traditional
component of the practice of pharmacy, and is taught as part of the
standard curriculum at most pharmacy schools.” Thompson v. W. States
1PhRMA,

Research and Development Policy Framework (Sept. 2024),
https://tinyurl.com/5eecdtm9.
2

Med. Ctr., 535 U.S. 357, 360–61 (2002) (internal citation omitted). For
example, the FDCA allows licensed pharmacists and physicians to
compound a version of an FDA-approved product to address
patient-specific needs, such as creating a liquid version of a medication
for a patient who has trouble swallowing solids. See 21 U.S.C. § 353a.
Compounding pharmacies and physicians whose drugs meet the
conditions of 21 U.S.C. § 353a (hereinafter “503A compounders”) are not
required, inter alia, to follow cGMP. On the other hand, outsourcing
facilities (hereinafter “503B compounders”) are subject to cGMP,
registration, and product reporting requirements. Id. § 353b. Regardless
of who produces them, compounded drugs are not subject to the safety
requirements that apply to FDA-approved drugs because they do not
undergo the FDA’s premarket review for safety, effectiveness, and
quality. Due to this reduced oversight, Congress has generally
prohibited compounders from producing products that “are essentially
copies of a commercially approved drug.” Id. §§ 353a(b)(1)(D);
353b(a)(2)(A)(ii). Nonetheless, this prohibition is temporarily lifted
when a drug is placed on the “shortage list.”
The FDCA defines “shortage” as “a period of time when the demand
or projected demand for the drug within the United States exceeds the
supply of the drug.” Id. § 356c. Further, the FDCA requires the FDA to
“maintain an up-to-date list of drugs that are determined by the [FDA]
to be in shortage in the United States.” Id. § 356e(a). For every drug the
FDA adds to its shortage list under this provision, it is required to
identify “[t]he name of the drug in shortage,” “[t]he name of each
manufacturer of such drug,” “[t]he reason for the shortage” from an
enumerated list of seven categories, and “[t]he estimated duration of the
shortage as determined by the [FDA].” Id. § 356e(b)(1)–(4). When a drug

is placed on the FDA’s shortage list, Congress permits 503A
compounders to compound copies of the drug and 503B compounders to
compound from that drug’s active ingredient—which is otherwise
prohibited—including by compounding drugs that are “essentially a
copy” of an approved drug. See Id. §§ 353b(a)(2)(A)(ii), (a)(5), (d)(2)(A).
Because, as discussed above, compounders are subject to less oversight

3

than drug manufactures, the FDCA permits this type of compounding
only while a shortage persists.
B. Factual and Procedural Background
The drugs relevant to this case are Mounjaro® and Zepbound®
(collectively the “Lilly Drugs”). The FDA approved the Lilly Drugs
pursuant to Intervener Eli Lilly and Company’s (“Lilly”) marketing
applications in 2022 and 2023, respectively. The Lilly Drugs contain a
complex molecule called tirzepatide, which targets hormone receptors
(called GIP and GLP-1). The FDA approved Mounjaro® for adults with
type 2 diabetes mellitus seeking to improve their glycemic control. And
the FDA approved Zepbound® for adults with obesity, weight-related
medical problems, and moderate to severe obstructive sleep apnea.
Given the groundbreaking nature of these drugs, Lilly experienced
unprecedented demand, which it was unable to meet. As a result, the
FDA placed the Lilly Drugs on its drug shortage list.
The Lilly Drugs remain protected by statutory exclusivity, meaning
that the FDA is prohibited by law from accepting an NDA or abbreviated
NDA for any tirzepatide product from any company other than Lilly
until June 2027. See 21 U.S.C. §§ 355(c)(3)(E)(ii), (j)(5)(F)(ii); 21 C.F.R.
§ 314.108(b)(2), (b)(3). However, as discussed above, this exclusivity is
suspended while the drugs remain on the FDA’s shortage list. Thus,
until the drugs are removed from the shortage list, compounders can
legally produce similar products to help satisfy the demand not filled by
Lilly.
In an effort to regain its exclusive right to produce and sell
tirzepatide products—by having the Lilly Drugs removed from the
FDA’s shortage list—Lilly spent roughly $23 billion to build, expand,
acquire, or obtain internal and external manufacturing facilities in the
United States and Europe. Additionally, in August 2024, Lilly obtained
supplemental FDA approvals authorizing the sale of the Lilly Drugs in
single-use vials—on top of addition to the already approved auto-injector
devices—allowing Lilly to more readily supply doses of the drugs. As a
result of Lilly’s efforts, the FDA updated the shortage list to reflect that
“[a]ll doses of Mounjaro® and Zepbound® [were] available.” Two
4

months after that announcement, on October 2, 2024, the FDA
announced that the tirzepatide shortage was over and that the Lilly
Drugs would be removed from the shortage list.
Five days later, on October 7, 2024, Plaintiffs filed this lawsuit. On
October 11, 2024, the FDA filed an unopposed motion to remand and
stay the case so that the FDA could “reevaluate the decision at issue in
this case.” The Court granted the motion, and the FDA reconsidered its
decision. On December 19, 2024, the FDA issued a “Delisting Action”
reaffirming its decision to remove the Lilly Drugs from the shortage list.
The Delisting Action was memorialized in two documents. The first,
titled the “Decision,” presented the evidence considered by the FDA and
its reasoning. The second, titled the “Order,” summarized the FDA’s
rationale and provided that the FDA would exercise its enforcement
discretion to delay the enforcement of its decision.
Thereafter, on January 1, 2025, Lilly filed its Motion to Intervene,
which the Court granted on January 6, 2025. On January 2, 2025,
Plaintiffs and the FDA filed a Joint Motion to Reopen the Case and
Enter Scheduling Order. After holding a hearing on January 14, 2024,
the Court reopened the case and set a briefing schedule for the present
Motion. The Parties, and Amici Curiae, have filed their respective briefs
and the Motion is ripe for determination.

LEGAL STANDARD
A preliminary injunction is an “extraordinary remedy” and will be
granted only if the movants carry their burden on four requirements.
Nichols v. Alcatel USA, Inc., 532 F.3d 364, 372 (5th Cir. 2008). The
movants must show: “(1) a substantial likelihood of success on the
merits; (2) a substantial threat of irreparable injury; (3) the threatened
injury to the movant outweighs the threatened harm to the party sought
to be enjoined; and (4) granting the injunctive relief will not disserve the
public interest.” City of Dall. v. Delta Air Lines, Inc., 847 F.3d 279, 285
(5th Cir. 2017) (cleaned up). “The decision to grant or deny a preliminary
injunction is discretionary with the district court.” Miss. Power & Light
Co. v. United Gas Pipe Line Co., 760 F.2d 618, 621 (5th Cir. 1985).

5

ANALYSIS
The Court begins with Plaintiffs’ likelihood of success on the merits
for their claims against Defendants. For the reasons stated infra, the
Court finds that Plaintiffs have failed to demonstrate a likelihood of
success on the merits of their claims, which is the most important (and
usually decisive) factor. See Tesfamichael v. Gonzales, 411 F.3d 169, 176
(5th Cir. 2005); Baird v. Bonta, 81 F.4th 1036, 1041 (9th Cir. 2023).
While the Court’s analysis could end there, in an abundance of caution,
the Court will briefly address the other preliminary injunction elements.

A. Likelihood of Success on the Merits
Plaintiffs’ Amended Complaint raises six claims for why the FDA’s
Delisting Action should be set aside. See generally ECF No. 68.
Plaintiffs, in their Motion for Preliminary Injunction, do not address
their fifth cause of action—unlawful interpretation of the statute under
Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024). Id. at 22.
Thus, because Plaintiffs did not raise it as a basis for injunctive relief,
the Court’s analysis focuses on the other five claims, which are
addressed in Plaintiffs’ Motion.
Those claims are: (1) rulemaking without conducting notice and
comment; (2) failure to consider the statutory factors; (3) facially
contradictory findings that undermine the basis of the agency action; (4)
failure to consider countervailing evidence; and (5) failure to publish a
rule in the federal registry. ECF No. 68 at 17–24. Because claims one
and five are both predicated on the Delisting Action being a rule, the
Court considers them together. Similarly, Plaintiffs’ remaining three
claims are considered together as they all involve whether the Delisting
Action was arbitrary and capricious.
1. Notice-and-Comment and Failure to Publish Claims
For the Court to determine Plaintiffs’ likelihood of success on the
merits on their notice-and-comment and failure to publish claims, the
Court must first determine how to categorize the Delisting Action. The
Parties do not dispute that the Delisting Action is a final agency action
subject to judicial review under the Administrative Procedures Act
6

(“APA”). However, the Parties do dispute how to classify the FDA’s
Delisting Action. Plaintiffs assert that the Delisting Action is a
substantive rule. ECF No. 64 at 8. On the other hand, Lilly and the FDA
(collectively the “FDA Defendants”) claim that the Delisting Action is an
informal adjudication. ECF Nos. 83 at 16; 90 at 17–18. If the Delisting
Action is a substantive rule, as Plaintiffs urge, then then the FDA was
required to comply with the APA’s stringent notice-and-comment
requirements and that process is reviewed under the arbitrary and
capricious standard. But if the Delisting Action is an informal
adjudication, as the FDA Defendants urge, then the Court simply
reviews the decision under the arbitrary and capricious standard.
As best the Court can tell, the question of how to classify the FDA’s
removal—or addition—of a drug from its shortage list has never been
raised or answered. In fact, the regulatory scheme is seemingly silent as
to what procedure the FDA must use to make its shortage
determinations. Plaintiffs argue that the Delisting Action is a
substantive rule under the APA because it “changed the law by
establishing a new prohibition.” ECF No. 64 at 8. Specifically, Plaintiffs
assert that the Delisting Action “creates law by prohibiting all
compounding of tirzepatide by Section 503B outsourcing facilities and
compounding drugs that are essentially copies of branded tirzepatide
products by Section 503A pharmacies” because “there is no difference
between” the FDA explicitly declaring “that ‘compounding of tirzepatide
is prohibited’ and removing it from the shortage list.” Id.
In contrast, the FDA Defendants argue that the Delisting Action is
not a substantive rule and was properly issued through adjudication for
two reasons. First, the FDA simply resolved a factual dispute according
to an established statute rather than promulgating a policy-like
standard or new interpretation of a statute. See ECF No. 83 at 16. And
second, the FDA has discretion to choose whether to proceed through
adjudication or rulemaking because the statutory framework does not
explicitly provide what procedure the FDA must use. See ECF No. 83 at
16–17.
In reviewing whether an agency action was a rulemaking or an
adjudication, courts consider two things. “First, we consider the agency’s
7

characterization of its own action. Second, we must examine the
ultimate product of the agency action.” City of Arlington, Tex. v. FCC,
668 F.3d 229, 240 (5th Cir. 2012), aff’d, 569 U.S. 290 (2013). The Court
will first address whether the FDA had the discretion to proceed through
adjudication before turning to whether the Delisting Action is in effect
an adjudication or substantive rule.
a. The FDA’s discretion
When a statutory scheme is silent as to what procedure an agency
must use to act, an agency has discretion to proceed through either
rulemaking or adjudication. McDonald v. Watt, 653 F.2d 1035, 1042 (5th
Cir. 1981) (“[T]he Supreme Court held that the decision to make new
law through rulemaking or adjudication ‘is one that lies primarily in the
informed discretion of the administrative agency.’”) (quoting SEC v.
Chenery Corp., 332 U.S. 194, 203 (1947)). An agency’s decision to proceed
through rulemaking or adjudication is reviewed under an abuse of
discretion standard, and the agency’s judgment “is entitled to great
weight.” NLRB v. Bell Aerospace Co., 416 U.S. 267, 294 (1974); see also
Neustar, Inc. v. Fed. Commc’ns Comm’n, 857 F.3d 886, 894 (D.C. Cir.
2017) (internal citations omitted) (“[A]s a general matter, ‘[i]n
interpreting and administering its statutory obligations under [an] Act,
[an agency] has very broad discretion to decide whether to proceed by
adjudication or rulemaking.”). Here, the FDA Defendants argue that the
FDA did not abuse its discretion by choosing to proceed through an
informal adjudication because: (1) Congress requires the shortage list to
be “up-to-date” and rulemaking is incompatible with that mandate; (2)
engaging in a meaningful notice-and-comment process was not possible
given the confidential materials involved; and (3) Congress permits the
FDA to withhold confidential information, including the very existence
of a shortage. ECF No. 83 at 17–18. 2 Having reviewed the Parties’
arguments and the applicable law, the Court finds that the FDA did not
2Because

the Court finds that the FDA did not abuse its discretion to
proceed through adjudication because of the requirement that the list be upto-date and the issues presented by the confidential data, the Court declines to
address the third argument—that the FDA is allowed to withhold information.
8

abuse its discretion by choosing to proceed through adjudication because
notice-and-comment rulemaking is incompatible with Congress’s
mandate to keep an up-to-date list. 3
Congress has tasked the FDA with “maintain[ing] an up-to-date list
of drugs that are determined by the [FDA] to be in shortage in the
United States.” 21 U.S.C. § 356e(a). Merriam-Webster defines “up-todate” as “extending up to the present time: including the latest
information.” Up-to-date, Merriam-Webster’s Collegiate Dictionary
(11th ed. 2003). If the FDA had chosen to proceed through rulemaking,
as Plaintiffs urge, it would have been required by the APA to provide
adequate “opportunity to participate in the rule making through
submission of written data, views, or arguments. . . .” 5 U.S.C. § 553(c).
Generally, for an agency to give adequate opportunity for notice and
comment, the APA “requires . . . a minimum thirty-day comment
period.” Chamber of Com. of U.S. v. SEC, 85 F.4th 760, 779 (5th Cir.
2023). An agency is then required to review the comments, respond to
“significant” comments, and make any appropriate changes before
officially promulgating a rule. See Perez v. Mortg. Bankers Ass’n, 575
U.S. 92, 96 (2015). Thus, even if the FDA expeditiously participated in
notice-and-comment rulemaking, the process would take well over a
month. Given the constant fluctuation in national supply and demand
numbers for a given drug, a rule based on data that is more than a
3Additionally, and in the alternative, the Court finds that the FDA did not

abuse its discretion due to the issues presented in achieving meaningful notice
and comment while maintaining Lilly’s confidentiality. Plaintiffs argue that
the Delisting Action is invalid because, inter alia, the FDA did not post it in
the federal registry for notice and comment before issuing it. However, a simple
review of the redacted version of Plaintiffs’ Brief in Support of its Motion
evidences the difficulty—if not the impossibility—of giving sufficient notice of
the data that the FDA relied upon in drafting the proposed “rule,” and allowing
for meaningful comment on it. See ECF No. 66 at 14–19. The redacted data in
the above reference section of Plaintiffs’ Brief was not even made available to
them through the issuance of the Delisting Action. Rather, Plaintiffs were not
allowed to see the data until, as a part of this lawsuit, the Court signed and
entered an agreed confidentiality agreement. Requiring the FDA to do the
same with everyone who wishes to participate in the notice-and-comment
process is unattainable and unenforceable.

9

month old cannot be said to be based on “the latest information”
available.
Moreover, the APA “mandate[s] that agencies use the same
procedures when they amend or repeal a rule as they used to issue the
rule in the first instance.” Perez, 575 U.S. at 101 (internal citation
omitted); Texas v. Biden, 646 F. Supp. 3d 753, 771 (N.D. Tex. 2022); Ctr.
for Biological Diversity v. Regan, 691 F. Supp. 3d 1, 8 (D.D.C. 2023).
Consequently, if the FDA is required to participate in
notice-and-comment rulemaking to remove a drug from its shortage list,
then it is required to do the same to add a drug to the shortage list.
Requiring the FDA to participate in a lengthy rule-making process to
add and remove drugs from the shortage list—based on stale
information—cannot be said to be congruent with Congress’s mandate
for the FDA to maintain an “up-to-date list of drugs . . . in shortage in
the United States.” 21 U.S.C. § 356e(a)
To emphasize this point, the Court proposes the following scenario.
Company A creates a breakthrough drug and is unable to supply enough
of the drug to meet an unprecedented national demand. Company A
reports its inability to meet demand, as required, and a couple months
later the FDA, after going through notice-and-comment rulemaking,
places the drug on the shortage list. Company A, understanding the
value of its drug, invests tens-of-billions of dollars to ramp up production
in order to meet demand. Company A’s investment pays off, and it is
able to supply enough of the drug to meet the national demand. The
FDA, based on the data provided by Company A, engages in
notice-and-comment rulemaking, and a couple of months later removes
the drug from the shortage list. The day after the rule is final, the
demand numbers for the preceding month come in, and due to an
unexpected spike, Company A’s supply capabilities no longer meet the
national demand. Not only did the FDA remove a drug that is in a
shortage based on stale information, but it must now once again
participate in a lengthy rulemaking process to allow compounders to fill
the unmet demand. In contrast, through informal adjudication the FDA
can act in a matter of days not months. And while efficiency may not
always be the benchmark for agency action, Congress’s explicit
10

command to keep the shortage list up-to-date makes efficiency
important here. This example demonstrates why the Court finds that
the FDA did not abuse its discretion in choosing to proceed through an
informal adjudication rather than notice-and-comment rulemaking.
Based on the foregoing, the Court agrees with the FDA Defendants
that the FDA did not abuse its discretion by choosing to proceed through
an informal adjudication. However, the label the FDA has attached to
the Delisting Action is not dispositive of whether the action should be
classified as such. Safari Club Int’l v. Zinke, 878 F.3d 316, 332 (D.C. Cir.
2017) (“An agency may not escape the requirements of § 553 by labeling
its rule an ‘adjudication’”). If the FDA properly exercised its discretion
to proceed though adjudication, but the Delisting Action is a substantive
rule in effect, then the APA requires that it be subject to notice-andcomment rulemaking. Therefore, the Court now turns to whether the
Delisting Action is an adjudication or substantive rule in its effect.
b. Substantive rule or informal adjudication in effect
As a preliminary matter, it appears to the Court that this issue is a
“lose-lose scenario” for Plaintiffs. As discussed above, the APA requires
the FDA to use the same procedure to add a drug to the shortage list
that it uses to remove a drug from the list. Thus, if the FDA’s removal
of the Lilly Drugs from the shortage list required notice and comment,
then so did the FDA’s addition of the Lilly Drugs to the list. It is
undisputed that Plaintiffs are only able to compound their versions of
the Lilly Drugs because of the FDA’s placement of the Lilly Drugs on the
shortage list. Consequently, if Plaintiffs are correct and the FDA’s
removal of the Lilly Drugs from the shortage list is invalid because it
violated the APA’s notice-and-comment requirements, then the FDA’s
listing of the Lilly Drugs without notice and comment is similarly
invalid and Plaintiffs should not have been allowed to compound their
versions of the drugs. But, if Plaintiffs are wrong, and the Delisting
Action is an adjudication, then both the addition and removal of the Lilly
Drugs were proper, and Plaintiffs can no longer compound their versions

11

of the drugs. 4 Nevertheless, the Court turns to the Parties’ arguments
regarding whether in effect the Delisting Action is a substantive rule or
informal adjudication.
Plaintiffs assert that the Delisting Action is a substantive rule
because it created law and is “no different in its force and effect than if
Congress had enacted a statute prohibiting” the compounding of
tirzepatide. ECF No. 65 at 7–11. Additionally, Plaintiffs argue that the
Delisting Action cannot be an adjudication because it does not resolve a
factual dispute between two parties, but, rather, is generally applicable
to an entire industry. Id. The Court will begin with the latter before
addressing the former.
i.

Broad impact argument

Plaintiffs first argue that the Delisting Action cannot be an
adjudication because of its broad impact. While “[a]djudications
typically ‘resolve disputes among specific individuals in specific cases,
whereas rulemaking affects the rights of broad classes of unspecified
individuals,’” “[i]t is true that an agency need not be presented with a
specific dispute between two parties in order to” proceed through
adjudication “because § 554 does not limit an agency’s use of declaratory
rulings to terminating controversies between parties.” City of Arlington,
Tex., 668 F.3d at 242–43. This is the case because “[j]ust as a class action
can encompass the claims of a large group of plaintiffs without thereby
becoming a legislative proceeding, an adjudication can affect a large
group of individuals without becoming a rulemaking.” Goodman v.
F.C.C., 182 F.3d 987, 994 (D.C. Cir. 1999) (citing NLRB v. Bell Aerospace
Co., 416 U.S. 267, 292 (1974) (explaining that an agency may
“promulgate a new standard that would govern future conduct” of nonparties in an adjudication)); see also Neustar, Inc., 857 F.3d at 894 (“The
fact that an order rendered in an adjudication ‘may affect agency policy
and have general prospective application,’ does not make it rulemaking
4Plaintiffs argue that the FDA adding a drug to the shortage list is less

legally consequential than removing a drug from the list. The Court finds the
opposite to be true. An agency action that suspends statutory exclusivity and
allows for a statutorily prohibited action to be temporarily performed is a
greater “change” in law than restoring the statutory norms.
12

subject to APA section 553 notice and comment.”); Nat’l Biodiesel Bd. v.
Env’t Prot. Agency, 843 F.3d 1010, 1018 (D.C. Cir. 2016) (internal
citation omitted) (“[T]he fact that an agency action applies to a ‘large
number of [parties]’ ‘carr[ies] [little] weight’ in [the Court’s] analysis.”).
As pointed out by the FDA Defendants, the FDA routinely conducts
adjudications that affect large numbers of third parties: the new drug
approval process. See 21 U.S.C. §§ 355(d)–(g). The FDA’s approval of an
NDA triggers numerous effects on potential competitors, such as: (1)
prohibiting the FDA from approving a competitor’s NDA for any drug
containing the same active moiety; and (2) triggering statutory
restrictions on compounding drugs that are essentially copies of the
approved drug. Id. §§ 353b(a)(5), (d)(2)(A); id. § 355(c)(3)(E)(ii). 5 The
Supreme Court has endorsed the FDA’s use of informal adjudications to
approve NDAs and remove unsafe drugs from the market, despite those
adjudications triggering broad sweeping effects on “several persons or
manufacturers.” See, e.g., Weinberger v. Hynson, Westcott & Dunning
Inc., 412 U.S. 609, 624–26 (1973). Consequently, the Court is
unpersuaded by Plaintiffs’ broad impact argument.
ii.

Creates new law argument

Turning now to Plaintiffs’ argument that the Delisting Action is a
substantive rule in effect because it creates law, Plaintiffs rely on a
series of cases in which an agency listing action was considered a rule.
5In their Reply, Plaintiffs attempt to distinguish the FDA’s approval of an

NDA from an FDA’s shortage determination by arguing that an NDA
application involves a specific party while a shortage determination does not.
See ECF No. 98 at 3–4. The Court is unpersuaded by this argument. To approve
an NDA, the FDA reviews data submitted by a company and determines
whether it satisfies a set of requirements. If the FDA approves an NDA, it
triggers statutory exclusivity for the submitting company as well as a statutory
prohibition against compounding the drug. Similarly, to make a shortage
determination, addition or removal, the FDA reviews data submitted by a
company to determine whether supply is greater than demand over a period of
time. If, for example, the FDA finds that a shortage no longer exists, it
reinstates the same statutory exclusivity and prohibitions that the FDA’s
approval of that drug’s NDA put into place. And those statutory provisions
apply to the same company and compounders that were affected by the NDA
adjudication. Thus, Plaintiffs argument that one affects specific parties and
the other does not, is unpersuasive.
13

ECF No. 65 at 8–10. Of the cases cited by Plaintiffs, they rely most
heavily on Safari Club. 878 F.3d 316. Because that case is
demonstrative and dispositive of Plaintiffs’ other cited authorities, the
Court will focus its analysis on Safari Club.
The “basic distinction between” an adjudication and rulemaking is
that adjudications are “proceedings designed to adjudicate disputed
facts in particular cases,” whereas rulemakings are “proceedings for the
purpose of promulgating policy-type rules or standards.” See United
States v. Fla. E. Coast Ry. Co., 410 U.S. 224, 244–45 (1973); see also 5
U.S.C. §§ 551(4) (defining “rule”), 551(6) (“order”), 551(7)
(“adjudication”). The “line between” adjudication and rulemaking “is
frequently a thin one. . . .” Gen. Am. Transp. Corp. v. Interstate Com.
Comm’n, 883 F.2d 1029, 1030 n.2 (D.C. Cir. 1989). While it can be
difficult to decipher where courts draw the thin line between
adjudication and rulemaking, courts generally find that an agency
action is an adjudication when it involves “concrete and narrow
questions of law the resolutions of which would have an immediate and
determinable impact on specific factual scenarios.” City of Arlington,
Tex., 668 F.3d at 243. Rulemaking, on the other hand, is identifiable
when the application of the action “will only become clear after
adjudication of the dispute in a court of competent jurisdiction.” Id.
This distinction can be seen in Safari Club. In Safari Club, the
United States Fish and Wildlife Service (hereinafter the “Service”)
issued findings providing that it lacked sufficient information to make a
positive finding that the sport-hunting of elephants would enhance the
survival of the species. 878 F.3d at 323. The Service’s findings also
“temporarily banned imports of sport-hunted trophies of elephants.” Id.
The plaintiffs filed a lawsuit challenging the findings and argued, inter

alia, that the findings were substantive rules despite the Service’s
insistence that they were adjudications. Id. at 331–34. The United
States Court of Appeals for the District of Columbia agreed and held
that the Service’s findings could not be adjudications because, unlike the
denial of “an application for an import permit,” they had “no immediate
legal consequences for any specific parties.” Id. at 334–35. Rather, the
D.C. Circuit held that the findings were substantive rules because they
14

“established a standard binding on the agency . . . to be applied to future
requests” and were “only meant to bind hunters in future permitting
adjudications and enforcement actions.” Id. at 334.
Applying the principle that “adjudications immediately bind parties”
while rules have “only future effect” to this case, the Court finds that the
Delisting Action is an adjudication for two reasons. First, the Delisting
Action undoubtably has immediate legal consequences for specific
parties. The immediate consequences of the Lilly Drugs being removed
from the shortage list are, inter alia, that Lilly regains its statutory
exclusivity over tirzepatide products, and that 503A and 503B
Compounders, like Plaintiffs, must cease production of their versions of
the drugs. Plaintiffs seemingly concede the immediate effect the
Delisting Action has on them as they argue that the removal of the Lilly
Drugs from the shortage list will force their tirzepatide products “off the
market,” causing them irreparable harm. ECF No. 65 at 2, 23. In
contrast, the Service’s findings in Safari Club, did not cancel any prior
but unfulfilled importation approvals, they only served to govern the
Service’s consideration of future applications. See Safari Club, 878 F.3d
at 333 (“[T]he Service’s ban on imports was only meant to bind hunters
in future permitting adjudications and enforcement actions . . . .”). Thus,
unlike Safari Club, where the findings had no immediate impact on a
specific party, the Delisting Action triggered statutory provisions,
immediately restoring Lilly’s exclusivity and requiring compounders to
stop compounding tirzepatide.
And second, the Delisting Action does not promulgate a new
policy-type rule or standard that will govern the FDA’s future actions.
Instead, it made a specific factual determination based on the statutory
definition of shortage. The Delisting Action did not change or interpret

the statutory definition of shortage. It simply fulfilled the FDA’s
mandate to determine whether tirzepatide products are in shortage. Put
another way, unlike Safari Club, where the Service’s findings
“implement[ed] and interpret[ed] [a rule’s] enhancement requirement”
to make a policy like judgment about what level of protection elephants
needed to be afforded to enhance their chance of survival; the FDA’s
Delisting Action simply looked at the evidence presented and made a
15

factual determination on whether one number was bigger than another.
878 F.3d at 334 (internal quotations omitted). While it is true that the
FDA’s numerical determination had the immediate effect of prohibiting
Plaintiffs from continuing to compound tirzepatide products, that
prohibition did not come by way of a new agency interpretation, but
rather by operation of an existing statute.
This distinction is further evidenced by the difference in the
prospective effect of the respective agency actions. In Safari Club, the
Service’s findings determined that a ban on the future importation of
elephant parts was appropriate until further notice to protect the
species. This new standard served as a guide for the Service’s
consideration of future importation applications. In contrast, rather
than creating a standard by which the FDA will consider future
compounding applications, 6 the Delisting Action immediately
reinstated, as discussed above, statutory protections and prohibitions.
In fact, the Delisting Action provides no guidance for any future
shortage determination the FDA must make, as every shortage
determination—even potentially one involving tirzepatide—must be
made on a case-by-case basis. Such case-by-case factual determinations
have been found by courts to be adjudications. See, e.g., Vanda Pharms.,
Inc. v. FDA, 436 F. Supp. 3d 256, 270 n.4 (D.D.C. 2020) (rejecting the
argument that the FDA’s analysis of scientific literature in an
adjudication applied to future cases such that it was a legislative rule,
and noting that, unlike in Safari Club, the agency’s analysis was “in the
context of ‘adjudicating a particular set of disputed facts’”).
The FDA’s Delisting Action made a factual determination about
whether from
to
, and projecting forward
through
, the supply of the Lilly Drugs was equal to or
greater than the demand. It did not make a policy-like determination.
Therefore, the Court finds that the Delisting Action was an informal
adjudication—not a rule. And as a result, the FDA was not required to
submit the Delisting Action to notice and comment or publish it in the
6In fact, the statutory exclusivity that Lilly immediately regained upon the

issuance of the Delisting Action explicitly prohibits the FDA from even
considering an application. 21 U.S.C. § 355(c)(3)(E)(ii), (j)(5)(F)(ii).
16

Federal Registry. Accordingly, Plaintiffs are unlikely to succeed on their
notice-and-comment and failure to publish claims.
2. Arbitrary and Capricious Claims
The Court now turns to whether Plaintiffs demonstrate a likelihood
of success on the merits because the FDA’s actions were arbitrary and
capricious. Agency decisions are “presumptively valid; the [plaintiff]
bears the burden of showing otherwise.” Barr v. SEC, 114 F.4th 441, 447
(5th Cir. 2024); Tex. Med. Ass’n v. U.S. Dep’t of Health & Hum. Servs.,
120 F.4th 494, 504 (5th Cir. 2024) (citing Medina Cnty. Env’t Action
Ass’n v. Surface Transp. Bd., 602 F.3d 687, 699 (5th Cir. 2010). “If the
agency articulates a rational relationship between the facts found and
the choice made it does not act arbitrarily or capriciously.” Joseph v. Dir.
of Texas Serv. Ctr., U.S. Citizenship & Immigr. Servs., No. 24-40249,
2025 WL 458001, at *3 (5th Cir. Feb. 11, 2025) (internal quotation and
citation omitted). The “focal point” of that review “should be the
administrative record already in existence, not some new record made
initially in the reviewing court.” Camp v. Pitts, 411 U.S. 138, 142 (1973).
And “[j]udicial review under that standard is deferential, a[s] a court
may not substitute its own policy judgment for that of the agency.” FCC
v. Prometheus Radio Project, 592 U.S. 414, 423 (2021). While courts
“may not supply a reasoned basis for the agency’s action that the agency
itself has not given,” courts are to “uphold a decision of less than ideal
clarity if the agency’s path may reasonably be discerned.” Tex. Med.
Ass’n, 120 F.4th at 504 (citing Motor Vehicle Mfrs. Ass’n of U.S. v. State
Farm Mut. Auto. Ins., 463 U.S. 29, 43 (1983) (quotations omitted)).
Here, Plaintiffs assert that the Delisting Action is arbitrary and
capricious because: (1) it does not sufficiently identify or analyze the key
parameters of the shortage determination; (2) it is facially incoherent
and inconsistent; and (3) it improperly ignored countervailing evidence.
See ECF No. 68 at 19–22; see also ECF No. 65 at 13–23. The Court will
address each in turn.

17

a. Identification of key parameters 7
Plaintiffs first argue that the Delisting Action is arbitrary and
capricious because it fails to identify what time period the FDA looked
at to make its shortage determination. ECF No. 68 at 19–20; ECF No.
65 at 14–19. Plaintiffs assert that the Delisting Action’s failure to state
a specific time frame is fatal because it is inconsistent with the statutory
language and it “blinded [the] FDA to Lilly’s inconsistent temporal
presentations that concealed shortages.” ECF No. 65 at 14. The Court
need not spill much ink on this argument as it plainly fails.
Even assuming without deciding that the FDA was required to
explicitly provide what period of time on which it based its shortage
determination, the FDA satisfied that burden. On multiple occasions,
the Delisting Action clarifies that it considered the previously produced
supply and demand numbers for
to
, as well
as the recently released
numbers and the projected
numbers through
. See ECF No. 65-1 at 1, 7, 8, 9, 10, 14, 15.
This time period was seemingly evident to Plaintiffs as, in the same
section of their brief, they take issue with the specific period of time used
and argue that the Delisting Action is arbitrary because it failed to
consider evidence from outside that time period. ECF No. 65 at 15–16
(asserting that the FDA erred because it did not consider past deficits or
surplusages in its analysis as it started
” and
looked at the numbers through
). Thus, in one breath,
Plaintiffs assert that the FDA failed to identify a specific time frame and
in another that the FDA’s time frame was erroneous. While the
Delisting Action occasionally references narrower time frames, the
decision as a whole focuses on a set of data and projected data from a
specific time frame—
to
.
Thus, the Court finds that the FDA sufficiently identified what time
period it considered in making the shortage determination. Further, the
Court finds that because it is tasked to determine whether a shortage

7The Court does its best to separate out Plaintiffs’ first two arbitrary and

capricious claims as they intermingle them in their brief. See ECF No. 65 at
14–19.
18

exists over a specific period of time, the FDA did not err in failing to
consider evidence from outside that time frame. Therefore, the Court
finds that Plaintiffs have failed to demonstrate a likelihood of success
on the merits of this claim.
b. Facially incoherent and inconsistent
Before turning its attention to Plaintiffs arguments for why the
Delisting Action is facially incoherent and inconsistent, the Court finds
it prudent to begin by briefly summarizing the FDA’s decision.
i.

Summary of the Delisting Action

The Delisting Action concluded that the tirzepatide shortage was
over because the data demonstrated “that Lilly’s supply is currently
meeting or exceeding demand for these drug products, and that Lilly has
developed reserves that it now holds in its finished product inventory,
plus significant units of semi-finished product.” ECF No. 65-1 at 1.
Additionally, the FDA noted that Lilly received approval to produce
doses in vials, and that it has scheduled substantial additional
production over the coming months. Id.

In making its determination, the FDA reviewed:
[D]etailed information and data regarding its production
and inventory of these drug products at various points in
time, including stock reports that show quantities supplied
and demanded, and inventory held in stock, for all
strengths of these drug products; cumulative quantities
supplied to and demanded by its customers in the year
2024; projected demand and supply in future months; and
wholesaler inventory data, among other information.
Id. 8
The data reviewed by the FDA is best summarized by two tables
contained within the Delisting Action, as shown below:
8“[A]mong other information” includes numerous information submitted by

Plaintiffs and others to demonstrate the existence of a shortage. Because that
is the basis for Plaintiffs’ third arbitrary and capricious claim, the Court does
not discuss that information in this section.
19

Id. at 10, 15.
These tables summarize Lilly’s reported and projected supply and
demand numbers beginning in
and concluding in
. The tables are constructed in a cumulative fashion with each
month building on the previous month(s). This means that each month’s
column shows the total supply and demand numbers from
to the specified month. As a consequence, the numbers for
appear astronomically larger than those for
.
The FDA determined that the shortage had concluded based on the
fact that: (1) from
to
, Lilly’s total supply
20

(
least through

) outpaced total demand (
); (2) at
, the shortage would not return based on the

projections that Lilly’s total supply (
) would continue
to outpace total demand
; and (3) the information
provided by wholesalers “further indicate[d] that nationwide supply for
[Lilly’s] products is exceeding demand.” ECF No. 65-1 at 10–15.
Furthermore, the FDA noted that its determination was bolstered by:
(1) the months-long production of data by Lilly to the FDA; (2) Lilly’s
supply of over
units of semi-finished syringe products
(products that have already completed sterile manufacturing and are
awaiting labeling and packaging); (3) the recent approval of Lilly’s vial
versions of the drugs, which allows Lilly to supply more product than
currently projected; and (4) Lilly’s investment into additional production
facilities that will soon be in operation. Id. After reviewing the other
evidence provided by Plaintiffs, and others, the FDA determined that
the nationwide shortage had ended and reaffirmed its decision to
remove the Lilly Drugs from the shortage list. Id. at 16–23.
ii.

Plaintiffs’ arguments

Plaintiffs seemingly insist that the Delisting Action needed to be
perfect. It did not. Rather, it needed only to “articulate[] a rational
relationship between the facts found and the choice made.” Joseph, 2025
WL 458001, at *3. Thus, the Court need not confuse the trees for the
leaves. The question before the FDA was, for “a period of time” did “the
demand or projected demand for the [Lilly] drug[s] within the United
States exceed the supply of the [Lilly] drug[s].” 21 U.S.C. § 356c(h)(2).
The FDA answered that question in the negative and therefore found
that the shortage had ended. Consequently, the question before the
Court is whether the FDA’s decision, that supply of the Lilly drugs
outpaced demand for a period of time, was reasonable in light of the
evidence before it. For the reasons set out infra, the Court answers that
question in the affirmative.
The crux of Plaintiffs’ argument that the Delisting Action is
incoherent and inconsistent is that “Lilly’s use of cumulative figures
misled or at least confused [the] FDA.” ECF No. 65 at 15. Plaintiffs claim
that this confusion obfuscated the fact that the shortage still persists
21

and created an unreasonable reliance on Lilly’s statements. Id. at 15–
19. Specifically, Plaintiffs argue that the Delisting Action is facially
incoherent and inconsistent because: (1) the FDA looked at the total
supply and demand data for the relevant period rather than at “monthly
snapshots;” (2) the FDA
, but then did
not
; (3) the “FDA
made no finding of demand under any consistently defined time period”
as “[o]nly cumulative tables report demand, and each month has a
different baseline;” and (4) the Delisting Action “turns on” Lilly’s
unsupported statement that it can supply over
a
month. Id.
Plaintiffs’ first argument, that the Delisting Action should not have
considered cumulative data, fails. It is axiomatic that to consider
something for a period of time requires considering it for the entire
period of time. Yet, Plaintiffs argue that the FDA’s decision is without
reason because there were data points from shorter periods of time,
within the overall time frame, that could lead to a different result. The
real and “detailed data” considered by the FDA shows that for the period
of
to
, Lilly supplied some
more than were demanded (
supplied demanded). The FDA, relying on projected data, 9
found that for the period of
to
capable of supplying at least
demanded
supplied -

more

, Lilly would be
than would be
demanded).

Plaintiffs insist that the FDA should have considered the data on a
month-to-month basis, rather than through cumulative numbers, and
point out that there was more demand than supply produced for
individual months. However, this argument ignores the fact that even if
9There is no evidence to show that the FDA’s reliance on the projections

was unreasonable as they provided that Lilly’s

” ECF

No. 65-1 at 14. Further,

22

the charts were based on each individual month’s numbers, the FDA
would have had to add them together to get the total numbers for the
relevant period of time. Thus, the result would have been the same as
surplus carries over 10 and every month (
–
ended with a net total surplus. See ECF No. 65-1 at 10, 15.
Consequently, Plaintiffs are unlikely to succeed on the basis that the
FDA fatally erred by considering cumulative numbers.
Plaintiffs next argue that the Delisting Action is arbitrary because
the FDA
. In addition, Plaintiffs argue
that the FDA erred by
. Plaintiffs
claim that the FDA had no reason to
,
because doing so ignores the fact that surpluses/shortages carry over.
While true, it ignores the fact that a period of time requires a starting
and ending point. Thus, it was not unreasonable for the FDA to
, as it was the beginning of the relevant time
period. 11 Additionally, for the same reason Plaintiffs’ cumulative
numbers argument fails so does their assertion that the FDA should
have
. In evaluating data for a
period of time, one looks at the whole not just part. Therefore, Plaintiffs
are unlikely to succeed on the basis that the FDA arbitrarily started
, and
.
Plaintiffs third argument, that the FDA “made no finding of demand
under any consistently defined time period” fails for the same reasons.
The FDA considered total demand for the relevant time period based on
actual and projected data. The argument that the cumulative demand
numbers were based on different lengths of time ignores the fact that

the supply numbers were based on the same lengths of time.
Additionally, just as above, even if they were broken down by month,
the FDA would have still been required to total the months up to
10Each dose can be stored for up to 24 months. ECF No. 90 at 12.
11Plaintiffs do not, and cannot, argue that the FDA was required to look at

numbers all the way back to the approval of the Lilly drugs. As Plaintiffs do
argue, the FDA was required to choose a time period for its analysis. The FDA
did and it looked at the actual and projected numbers for that time frame. The
statute does not require more of the FDA and neither does this Court.
23

evaluate if the total demand outpaced total supply for the time period
being considered. Thus, Plaintiffs are unlikely to prevail on their
demand calculation argument.
Finally, Plaintiffs assert that the Delisting Action is arbitrary
because it “turns on” Lilly’s unsupported representation that it can now
supply over
a month. This argument also fails. Even
assuming without deciding that Lilly’s
a month
estimate is unsupportable, Plaintiffs cannot show that the FDA’s
determination has no reasonable relationship to the facts presented for
two reasons. First, Plaintiffs statement is a mischaracterization, as the
FDA considered significantly more information than Lilly’s explicit
estimate. See ECF No. 35-1 at 1. And second, even if
the monthly estimate is unsupportable by the data, that does not negate
the fact that the actual numbers show that total supply outpaced
demand for the relevant period. Id. at 10, 15. Thus, even if the FDA was
never presented with Lilly’s estimate, the actual supply and demand
numbers provide the FDA with a reasonable basis for determining that
the Lilly Drugs are no longer in shortage. Accordingly, because the FDA
was not required to be perfect, Plaintiffs are unlikely to succeed on their
claim that the Delisting Action is incoherent and inconsistent.
c. Countervailing evidence
Finally, Plaintiffs assert that the Delisting Action “arbitrarily waved
away all evidence of shortage.” ECF No. 65 at 19–23. Specifically,
Plaintiffs claim that the FDA reviewed all of the evidence provided by
them, and others, with “hyper-skepticism.” 12 Id. Plaintiffs, and others,
provided four categories of evidence to the FDA: (1) screenshots of
pharmacy wholesalers websites; (2) patient reports; (3) news reports;
and (4) compounding numbers. Id. Plaintiffs argue that all of this
evidence shows that the FDA unreasonably relied on Lilly’s assertions
and should not have been waved away. Id. The Court will address each
12As a preliminary matter, the Court notes that the FDA also scrutinized

and rejected some of Lilly’s evidence based on the same standards it applied to
the countervailing evidence. See, e.g., ECF No. 65-1 at 13 n.44., 13–14 n.53. If
nothing else, this shows that the FDA did not blindly rely on Lilly’s assertions
and evidence.
24

set of evidence to determine if the FDA’s finding that it did not outweigh
or undermine the evidence provided by Lilly was reasonable in light of
the facts before it.
First, Plaintiffs point to the screenshots of wholesalers’ webpages
showing that on certain days some tirzepatide products were
unavailable. Id. at 19–20. The FDA reviewed the screenshots and found
that the evidence did not “undermine[] or outweigh[] the information
provided by Lilly . . . with respect to availability of product to
wholesalers and retailers” because: (1) Lilly provided data from the
wholesalers showing that Lilly is meeting or exceeding wholesaler
demand for the Lilly Drugs; (2) of supply chain dynamics; (3) most of the
screenshots were undated; (4) Lilly

and (5) some localized and temporary supply issues do not
demonstrate a national shortage. ECF No. 65-1 at 19–21.
Plaintiffs take issue with all of the FDA’s explanations, but most
notably argue that “[d]elay in shipping of the drug” is a statutory
indicator of a shortage. ECF No. 65 at 20 (citing 21 U.S.C.
§ 356e(b)(3)(F)). While a significant delay in shipping could affect supply
on a national level, it was reasonable for the FDA to conclude that a “
” delay for a specific dose of tirzepatide on a specific retailer’s
website does not rise to the level of a national shortage. Similarly, the
Court finds that the FDA’s review and explanation of the data related
to screenshots of wholesalers’ websites was not unreasonable in light of
the additional data provided and supply chain dynamics.
Second, Plaintiffs claim that the FDA unreasonably found that
Lilly’s evidence was not outweighed by the “tens of thousands” of
“reports of patients” not being able to obtain tirzepatide. ECF No. 65 at
20. Plaintiffs, and others, submitted website “survey data” where people
responded in the affirmative to a question asking if they have had “an
inability to access name brand GLP-1s.” Id. at 20; ECF No 65-1 at 17.
The FDA reviewed the submissions and found that they did not
undermine Lilly’s evidence that the shortage was over because: (1) there
is no way to verify how many individuals actually filled out the reports,
25

when they filled out the reports, or when their inability to obtain the
drugs occurred; (2) the prompt does not define “inability to access” so
some may be reporting that a pharmacy was out of stock and others that
their doctor did not prescribe them the medication; (3) of business
decisions made by pharmacies as well as their limited storage capacities;
and (4) some localized and temporary supply issues do not demonstrate
a national shortage. ECF No 65-1 at 16–19. Given the issues with the
evidence as articulated by the FDA, the Court finds that the FDA did
not unreasonably determine that Lilly’s evidence is not outweighed by
the patient survey reports. 13
Third, Plaintiffs assert that the FDA “ignored” news coverage of the
shortage situation. ECF No. 65 at 21. With regard to this evidence, the
FDA stated:
FDA reviewed various articles and blog posts submitted by
various groups, as well as other news coverage. While these
pieces discussed various aspects of the shortage situation,
FDA did not find them to contain probative evidence
relevant to the analysis FDA must conduct to determine
whether a shortage has resolved. While some of these
sources contained personal accounts of inability to get a
particular product at a particular time, like the evidence
discussed in sections II.B.1.i and ii above, those individual
accounts do not undermine or outweigh the more specific,
reliable, comprehensive, and current information that has
been provided by Lilly demonstrating its ability to supply
enough product to meet demand.
ECF No. 65-1 at 21.
The Court finds that it was not unreasonable for the FDA to give
more weight to specific, reliable, comprehensive, and current
information from Lilly, than news reports and blog posts from sources
who may have had ulterior motives and lacked the same detailed data
presented to the FDA. Consequently, the Court finds that the FDA did
not arbitrarily wave away the news coverage of the shortage situation.

13As

previously noted, the FDA found some of Lilly’s evidence to be
unpersuasive
. See, e.g., ECF No. 65-1 at 13
n.44., 13–14 n.53.
26

Fourth, and finally, Plaintiffs argue that the “FDA erred” by
“disregarding the ‘[] sales volume of compounded tirzepatide’ as
evidence of demand.” ECF No. 65 at 21–23. Specifically, Plaintiffs claim
that FDA “erroneously deemed compounded products irrelevant,”
“disregard[ed] demand for compounded products because they beat
Lilly’s on price,” failed to take into account the correct volume of
compounding, and incorrectly assumed that some patients were using
compounded tirzepatide for off-label uses. Id.
Plaintiffs’ first point, that the FDA deemed compounded products
irrelevant, fails. The FDA stated that the number of compounded
products has “minimal relevance” on the current demand of the Lilly
Drugs, but that it is relevant to projected demand—after the
compounded drugs are removed from the market. ECF No. 65-1 at 22–
23. On that basis, the FDA considered whether Lilly would be able to fill
the demand hole that would be left after the compounded drugs were
removed. Id. at 23–28. After a lengthy discussion, the FDA found that
based on the projections Lilly would be able to meet the projected
demand. Id.
Plaintiffs’ second and fourth arguments similarly fail. In essence,
Plaintiffs take issue with the FDA’s statements that demand for
compounded drugs does not translate one-for-one to demand for the Lilly
Drugs because of price considerations and patients’ current off-label use.
ECF No. 65 at 21–23. Lilly did not zero out the projections of demand
based on these principles, it simply found these were factors to consider
in projecting the demand of the Lilly Drugs. ECF No. 65-1 at 26–27. It
is not unreasonable to consider missuses or price differences in
attempting to calculate a projected national demand.
Finally, Plaintiffs assert that the FDA improperly evaluated how
much compounding was occurring. ECF No. 65 at 22. Plaintiffs claim
that the FDA erred in considering only the “first six months of 2024”
while considering
for Lilly’s data. But the data from the first
six months of 2024, was “the most recent complete reporting period” that
was available to them. ECF No. 65-1 at 24–25. Plaintiffs also assert that
the FDA overcalculated how much Plaintiffs were producing. ECF No.
65 at 22. Even if true, this does not show error as the FDA conducted its
27

analysis based on inflated compounding numbers, which would only
have helped Plaintiffs’ position on the shortage. Lastly, Plaintiffs argue
that the FDA should have investigated more based on the evidence
provided that thirty-seven pharmacies produced roughly 500,000 doses
per month. ECF No. 65 at 22. The FDA considered this evidence and
found that “[e]ven assuming that all of these doses have been supplied
to the market and, upon the curtailing of compounding, would translate
to demand for Lilly’s products, this would represent a very small amount
relative to Lilly’s production and inventory.” ECF No. 65-1 at 24.
Furthermore, the FDA had no obligation “to conduct or commission [its]
own empirical or statistical studies.” Prometheus Radio Project, 592 U.S.
at 427. Accordingly, the Court finds that the FDA’s treatment of the
evidence submitted by Plaintiffs, and others, was reasonable based on
the evidence it had before it. Id. Thus, Plaintiffs are not likely to succeed
on this claim.

B. Irreparable Injury
Parties frequently confuse the magnitude of a harm with the
irreparability of a harm. See Winter v. Nat. Res. Def. Council, Inc., 555
U.S. 7, 18–20 (2008); Rest. Law Ctr. v. U.S. Dep’t of Lab., 66 F.4th 593,
597 (5th Cir. 2023) (citing Texas v. EPA, 829 F.3d 405, 433 (5th Cir.
2016) (“In determining whether costs are irreparable, the key inquiry is
‘not so much the magnitude but the irreparability.’”)). Yet even
enormous harms can be compensable by money damages, thus failing to
justify injunctive relief. See Sampson v. Murray, 415 U.S. 61, 90 (1974)
(“The key word in this consideration is irreparable. Mere injuries,
however substantial . . . are not enough. The possibility that adequate
compensatory or other relief will be available at a later date . . . weighs
heavily against a claim of irreparable harm.”) (internal quotations
omitted). That’s off the table here, as Plaintiffs sue the federal
government and cannot recover monetary compensation. See Wages &
White Lion Invs., LLC v. FDA, 16 F.4th 1130, 1136 (5th Cir. 2021). And
“complying with a regulation later held invalid almost always produces
the irreparable harm of nonrecoverable compliance costs.” Louisiana v.
Biden, 55 F.4th 1017, 1034 (5th Cir. 2022) (internal citation omitted);
see generally Rest. Law Ctr., 66 F.4th at 433. Here, without a
28

preliminary injunction, Plaintiffs will suffer unrecoverable financial
losses, which constitutes irreparable harm. 14 White Lion Invs., LLC, 16
F.4th at 1136.

C. Public and Private Interests
Finally, Plaintiffs must show that, if the injunction is denied, the
threatened injury outweighs any harm that will result if the injunction
is granted, and that the granting of an injunction will not disserve the
public interest. See Mock v. Garland, 75 F.4th 563, 577 (2023). These
factors “merge when the Government is the opposing party.” Nken v.
Holder, 556 U.S. 418, 435 (2009). On one hand, if the Department is
enjoined, it “suffers the irreparable harm of denying the public interest
in enforcement of its laws.” Veasey v. Abbott, 870 F.3d 387, 391 (5th Cir.
2017). On the other, “it is always in the public interest” to stop
enforcement of unconstitutional or invalid laws. See Jackson Women’s
Health Org. v. Currier, 760 F.3d 448, 458 n.9 (5th Cir. 2014) (internal
citations omitted). The Parties’ arguments for both interests are the
same.
Plaintiffs argue that if the Court denies an injunction, patients will
be deprived of their medications. ECF No. 65 at 24. In contrast, the FDA
Defendants claim that if the Court grants an injunction, patients will
continue to be subject to dangerous compounded versions. ECF Nos. 83
at 24; 90 at 22–25. Congress considered both of these interests in
crafting the relevant regulatory scheme. As discussed above,
compounding is generally prohibited due to the reduced oversight and
the potential harms associated with the practice. However, Congress
chose to allow for compounding when a drug is on the FDA’s shortage
list so that patients can receive their medications. If Congress thought
it prudent to account for both of the asserted public interests at issue
here, it is not for this Court to make a policy determination on which is

14Lilly argues that Plaintiffs are compounding in violation of the relevant

statutes. However, the FDA does not contest this element. The Court agrees
with Plaintiffs that this argument has no place in this case and must be
decided, if at all, in a different lawsuit. Thus, for the purposes of this Motion,
the Court does not consider that argument.
29

greater. 15 Thus, the Court finds that the public and private interests at
issue in this case are a wash and do not weig in favor of or against the
granting of an injunction.

CONCLUSION
For the reasons set out above, Plaintiffs’ Motion for Preliminary

Injunction and Stay is DENIED.

Given the agreed confidentiality agreement that was entered into by

the Parties, and enforced by the Court, the undersigned finds it
appropriate to file this unredacted opinion under seal. Shortly after the
opinion is filed, the Parties will be provided, via email, an unsigned PDF

version of the order. It is ORDERED that, on or before 4:00 p.m.,
March 7, 2025, the Parties shall submit, via response to the email, an

agreed upon version of the order containing any appropriate redactions.
After receiving and reviewing the Parties’ version, the Court will issue
the redacted order.

SO ORDERED on this 5th day of March 2025.

15The Court agrees with John Adams’s sentiment that the judiciary should

avoid exercising the powers of the legislative and executive branches, so that
this Nation may remain “a government of laws and not men.” Mass. Const. art.
30;
John
Adams,
Architect
of
American
Government,
https://www.mass.gov/guides/john-adams-architect-of-american-government.
30