OpenLoop, a company providing operational and tech services to telehealth companies, and compounding pharmacy Triad Rx are being sued in a class action for selling oral tirzepatide.
The complaint (PDF), which was quietly filed in November in Delaware, accuses the companies of selling “snake oil.” The plaintiff, a customer, alleges the companies marketed and sold the pills as “a safe and effective equivalent and alternative” to FDA-approved GLP-1s. Oral tirzepatide has not been approved by the FDA and “has no demonstrated mechanism of absorption or efficacy,” per the complaint.
The complaint alleges that the defendants OpenLoop and Triad Rx “have profited by intentionally deceiving consumers into each paying hundreds of dollars for unapproved, ineffective oral weight loss pills that were (knowingly) never capable of delivering the weight loss results promised.”
The plaintiff argues the defendants violated the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, a federal law that is typically used to prosecute organized criminal activity, as well as a state Unfair and Deceptive Trade Practices Act and other consumer protection and fraud statutes. In addition to economic damages, the plaintiff seeks to stop the defendants from continuing to “deceptively” market and sell the drug.
The only orally administered GLP1 approved by FDA to date is oral semaglitude. Tirzepatide’s “dual-receptor potency makes uncontrolled oral absorption both unreliable and potentially unsafe,” the complaint alleges. A spokesperson for Eli Lilly, which manufactures tirzepatide and is not named in the suit, told Fierce Healthcare: "There are no human studies—let alone clinical trials—involving any oral tirzepatide product, meaning anyone selling oral tirzepatide is making unproven claims and experimenting on unsuspecting Americans."
The named plaintiff, Darby Day, alleges he bought a one-month supply of the pills through MEDVi, a GLP-1-focused telehealth platform that appears to work with OpenLoop but is not named in the suit, for $279.99. The plaintiff alleges that he did not consult a licensed medical professional and was only asked to provide his medical history, height and weight.
The label indicates Day received the active pharmaceutical ingredient tirzepatide blended with L-Carnitine and vitamin B12. The label directed Day to dissolve half a tablet under the tongue once daily for two weeks, then one full tablet daily thereafter. Day, who had previously used an injectable GLP-1, took the pills as directed for over a week but did not notice a difference, per the complaint. He stopped taking it out of concern that the medication was ineffective and potentially unsafe and canceled his subscription.
The defendants have filed a motion to dismiss, arguing that compounding is legal, that no law requires FDA approval for compounding oral tirzepatide and that the plaintiff lacks RICO standing without an allegation of RICO injury.
“This case attempts to turn dissatisfaction with a prescription weight-loss treatment into a federal RICO action and a multi-state consumer fraud case,” the motion said. “The Complaint rests on a single, erroneous premise: that compounded oral tirzepatide requires FDA approval, and without FDA approval, pharmacies are prohibited from lawfully compounding or dispensing it.”
The plaintiff’s counsel will be filing a response to the defendants’ motion to dismiss in March.
“My god, the game’s just began,” Nicholas Chimicles, of Chimicles, Schwartz Kriner & Donaldson-Smith, counsel for the plaintiff and proposed class, told Fierce Healthcare.
He hopes to begin discovery, if the judge allows, and then ultimately get a jury. “What we want is money back for the people that paid for snake oil,” Chimicles said. The firm has been contacted by other consumers who may end up joining the class.
“OpenLoop drives the digital infrastructure providing access to care, in the face of a broken healthcare system,” Christopher Soller, counsel for OpenLoop, told Fierce Healthcare by email. “We are, and will continue to fight, this blatant attempt to force patients back into the status quo. Our Motion to Dismiss plainly lays out our defense. In the meantime, we will continue to drive our mission of Healing Anywhere.”
When asked by Fierce Healthcare how the plaintiff can be sure the drug is ineffective if they did not take it for as long as the label recommended, Chimicles replied: “It doesn’t matter if you use it for a day, or you use it for a year. It’s a snake oil.” He called oral tirzepatide a “chemical impossibility to absorb in the necessary and appropriate way.”
In their response to the motion to dismiss next month, Chimicles said his firm will include examples of other cases that relied on RICO to successfully attack the marketing and sale of “snake oil” drugs in healthcare. Last week, Chimicles’ firm filed a separate lawsuit against a defendant in Pennsylvania in federal district court in a case also involving GLP-1s, he said.
Compounded GLP-1s have been in the spotlight over the past several years. From widespread shortages to reports of counterfeit product to pharma allegations of copyright infringement, a number of companies have gotten caught in the crossfire. Some Big Pharma companies have also been accused of interfering and preventing telehealth companies from working with compounders.
"Patients deserve better than untested knockoffs that are sold without clinical evidence that they are safe or even work," the Lilly spokesperson told Fierce Healthcare. "We agree with FDA’s recent statement that decisive action is necessary to safeguard consumers from compounded knockoffs.”
There are two main types of compounding pharmacies: ones that create custom formulations for individual patients and ones that are outsourcing facilities that can make bulk drug batches only when there is an FDA-declared shortage.
GLP-1 shortages are now over. But a lucrative cottage industry for compounding GLP-1s has sprung up, and containing it is not easy. As of June 2025, all compounding of semaglutide and tirzepatide, except in rare circumstances, is now illegal under U.S. compounding laws. While mass compounding of GLP-1s is now illegal, compounders argue that they are personalizing GLP-1s for a smaller subset of patients, which is allowed. The extent to which that is actually the case is up for debate.
“This whole war that has happened since the shortages … has been really brought by the big pharma manufacturers against the compounding industry,” Thomas (TJ) Ferrante, partner and board-certified healthcare attorney with Foley & Lardner, told Fierce Healthcare. Ferrante has no involvement in the OpenLoop case but has represented telehealth companies against similar lawsuits brought by pharma.
Compounding is in a kind of legal gray area, per Ferrante. “The FDA historically has not really stepped over the line … to tell the doctor that they cannot compound,” he said. At the same time, “what’s crossing the line to patent infringement or false advertising?”
The argument from telehealth companies involved in similar cases is that this is an attack on digital health by the deep-pockets pharma industry that is prioritizing profit over patients, Ferrante noted. On the other hand, Big Pharma argues compounded drugs are a risk because they are not evaluated by the FDA. Triad Rx, named in the Day lawsuit, has previously received a warning letter from the FDA about "serious deficiencies" related to sterilization.
Just last week, Hims & Hers retreated from launching a weight loss pill after Novo filed a lawsuit claiming patent infringement with its compounded pill and other copycat semaglutide products.
“A lot of it turns on how are things communicated to consumers in marketing out there,” Ferrante said, which is what he believes put Hims on the radar.
The FDA recently announced that it will take “decisive steps” to restrict GLP-1 active pharmaceutical ingredients intended for use in “non-FDA approved compounded drugs that are being mass-marketed by companies.” The regulator called out Hims & Hers by name and put “other compounding pharmacies” on notice, too.
OpenLoop is a white-label operator powering telehealth companies nationwide, supporting over 170 organizations, according to CEO Jon Lensing, M.D.'s LinkedIn profile. It was recognized in Time’s 2025 Top HealthTech Companies list.