Judge lets part of Lilly’s Mochi lawsuit proceed, while dismissing an advertising conspiracy theory

A federal judge allowed part of Eli Lilly's lawsuit involving Mochi Health and Aequita Pharmacy to continue on September 8. The ruling concerns allegations about control over medical care and the sale of compounded tirzepatide. It does not decide whether those allegations are true.

U.S. District Judge Jacqueline Scott Corley issued the order in the Northern District of California. She rejected an effort to dismiss Lilly's civil-conspiracy theory against Aequita Pharmacy LLC and Aequita Corporation under California's Unfair Competition Law.

In the same order, the judge dismissed a different conspiracy theory involving false advertising. That dismissal applies to the Mochi Medical entities and the Aequita defendants. The result is a split decision that allows some allegations to proceed while limiting others.

Allegations about control over medical care can proceed

Lilly alleges that the relationships between Mochi Health, its associated medical practices, and the Aequita defendants went beyond ordinary business partnerships. Its complaint describes alleged control over pharmacy operations and practices involving large numbers of identical prescriptions.

The surviving theory concerns the corporate practice of medicine. In this case, that means allegations that a business improperly controlled medical-treatment decisions. The court found enough factual allegations to permit an inference that the Aequita defendants knew about and helped advance the alleged conduct.

A civil-conspiracy theory can make a participant responsible for another participant's wrongful acts under certain conditions. It is a way to impose liability, rather than a separate finding that a crime occurred. At this stage, Lilly did not need to prove that Aequita directly controlled the medical practices or personally made the alleged prescription changes.

Financial benefit alone did not support the advertising theory

The advertising dispute concerns the Lanham Act, a federal law that includes rules against false advertising. Lilly sought to hold the Mochi Medical and Aequita defendants responsible for allegedly false advertisements through a conspiracy theory.

The judge found that Lilly did not adequately identify acts by those defendants that advanced the alleged false advertising. Shared business relationships, knowledge of advertising, or a financial benefit did not fill that gap. Nor did the appearance of Aequita's name in a joint announcement establish what it did to create or distribute the message.

The court dismissed this theory without leave to amend after Lilly received two earlier opportunities to revise its complaint. However, the order preserves a limited route back. Lilly can ask permission to add the theory again if it discovers facts that support it.

The ruling tests allegations, not whether misconduct occurred

This was a motion to dismiss. For that decision, the court accepts well-pleaded factual allegations as true and draws reasonable inferences in Lilly's favor. That procedural rule lets a court assess whether a claim can proceed before the parties prove their accounts with evidence.

The order therefore does not establish that the defendants improperly controlled treatment, falsely advertised medication, or supplied unsafe products. It does not decide the entire lawsuit or order a general stop to compounded tirzepatide.

No price or prescription change follows from this order

For patients, the immediate development is the scope of the case that can continue. The order does not announce new prices, change prescription eligibility, or require patients to switch providers or medicines.

The case is relevant to the relationships between telehealth businesses, medical practices, and pharmacies. However, predictions about higher prices, fewer pharmacies, or reduced access go beyond this ruling. Those outcomes remain uncertain. Any later decision that changes treatment access needs its own review.