Retatrutide, blah, blah…BLA?

I. What Compounders are Talking About

Eli Lilly and Company (“Lilly”), on July 23, 2026, announced it plans to submit a Biologics License Application (“BLA”) for retatrutide to the Food and Drug Administration (“FDA”) in Q1 2027.¹ This announcement has led to significant chatter in the compounding community. People are asking what this announcement means, and what is the likelihood FDA will decide to regulate retatrutide as a biologic through the BLA pathway rather than as a drug through the New Drug Application (“NDA”) pathway. Before I get into that specifically, though it’s unlikely you’ve made it to a healthcare law firm’s blog post written by a pharmacist-attorney without some understanding of the background and consequences of this decision, let’s all get on the same page.

II. What are the Consequences of the Classification as a Biologic Rather Than a Drug?

While classification as a biologic rather than a drug has numerous consequences, with as one example, a biologic receiving a longer period of product exclusivity than a drug,² if I know my audience, the consequence of concern is that the pharmacy compounding exemptions from the requirements of the Federal Food Drug and Cosmetic Act (“FDCA”) are offered to drugs but not to biologics. Section 503A³ of the FDCA exempts certain compounds from the new drug approval requirements,⁴ but there is no such similar exemption for compounds from the biologics license application requirements of the Public Health Service Act.⁵ Simply put, if a pharmacist in a state licensed pharmacy meets the various conditions of section 503A of the FDCA and is in compliance with state law, there is a lawful pathway to compound substances classified as drugs. However, there is currently no lawful pathway and no FDA enforcement discretion to allow compounding of biologics.⁶

Were retatrutide to be classified as a biologic, the compounded product market that currently exists for semaglutide and tirzepatide based on, among other conditions, a prescriber’s determination that the compound produces a significant difference for an identified individual patient would not exist. There would be no lawful pathway for a pharmacy to compound with retatrutide bulk drug substance.

III. Lilly Asked FDA to Classify Retatrutide as a Biologic

The FDCA allows a drug sponsor to submit to FDA a request for designation, asking FDA to classify the product at issue as a biologic or a drug.⁷ Lilly submitted a request to FDA to designate retatrutide a biologic on November 9, 2023.⁸ FDA declined to accept the request for failing to contain required information.⁹ Lilly submitted a new request on January 19, 2024, and FDA issued a decision classifying retatrutide as a drug on March 18, 2024.¹⁰

IV. Lilly’s Lawsuit Against FDA in the United States District Court for the Southern District of Indiana

Lilly filed a complaint against FDA for declaratory and injunctive relief on September 3, 2024.¹¹ Lilly asked the Court to find violations of the Administrative Procedures Act in that (1) FDA’s refusal to designate retatrutide as a biological product exceeds the agency’s statutory authority, (2) FDA’s refusal to designate retatrutide as a biological product violated FDA’s own regulations, and (3) FDA’s refusal to designate retatrutide as a biological product is arbitrary, capricious, and an abuse of discretion.¹²

Essentially, Lilly asks the court to review if retatrutide is a protein according to law or regulation, and if FDA sufficiently explained its decision, and came to that decision following the rationale FDA used in previous similar decisions.

A. The District Court’s Decision and Reasoning

For a thing to be regulated as a biologic it must meet the statutory and regulatory definition of a “Biological Product,” which includes, “a…protein, or analogous product….”¹³ FDA defines “protein,” in part, as “any alpha amino acid polymer with a specific, defined sequence that is greater than 40 amino acids in size…”¹⁴ Accordingly, the Court analyzed these terms.

i. Protein

The parties seem to agree that retatrutide contains, at most, 40 alpha amino acids.¹⁵ The parties, however, disagree on the meaning of the words used in FDA’s definition of protein.¹⁶

Here’s the issue. FDA, in regulation said a “protein is any alpha amino acid polymer…that is greater than 40 amino acids in size.”¹⁷

Did FDA mean a protein is any alpha amino acid polymer…that is greater than 40 alpha amino acids in size? Or did FDA mean that a protein is any alpha amino acid polymer that is greater than 40 of any type of amino acids in size?¹⁸

Whether retatrutide is a protein comes down to whether FDA needed to repeat the term “alpha” in the definition.

If the first definition holds then, a protein must be 41 or more alpha amino acids. If the second definition holds, then some number of alpha amino acids, 40 or fewer combined with non alpha amino acids to become greater than 41 amino acids of any type is a protein.

Retatrutide contains 40 alpha amino acids and 1 non alpha amino acid, meaning in total it is 41 amino acids.¹⁹ So whether FDA meant a protein is greater than 40 alpha amino acids or merely greater than 40 amino acids is determinative of whether retatrutide is definitionally a protein. In terms of count, there couldn’t be a closer call.

There are statutory interpretation arguments on both sides. The District Court read the word alpha into the definition and determined retatrutide is not a protein, thus not regulated as a biologic according to this argument.²⁰

ii. Analogous to a Protein

Immediately above I focused on the portion of the definition of a protein regarding amino acid type, but recall at the start, the definition of Biologic Product is among other things “…a…protein, or analogous product…”²¹

What does it mean to be analogous to a protein? If retatrutide is analogous to a protein then it meets the statutory and regulatory definition of a protein and in turn meets the definition of Biologic Product and thus would be regulated as a biologic.

The FDA has not promulgated a rule defining when a product is analogous to a protein.²² FDA has taken the position with Lilly that to be analogous to a protein a thing must share the “fundamental defining property” of being greater than 40 alpha amino acids in size.²³ However, in an earlier, unrelated action, FDA said the defining feature of being analogous to a protein is when an amino acid polymer has a “specific, defined sequence.”²⁴ This is where Lilly’s arbitrary, capricious, and an abuse of discretion claim comes in. The FDA can’t change its position without at least a reasoned explanation for the change.²⁵

The District Court held FDA did not sufficiently explain why it found retatrutide not to be analogous to a protein and remanded the decision back to FDA to look again.²⁶

In taking another look, FDA may find retatrutide is analogous to a protein or it may merely show more of its work by explaining why it finds retatrutide not to be analogous to a protein. Either would satisfy the court.²⁷

If retatrutide is analogous to a protein it meets the definition of protein and could be regulated as a biologic.

V. Where Things Stand

The District Court’s decision was issued October 3, 2025.²⁸ The FDA has not yet announced the results of its second look at whether retatrutide is analogous to a protein.

Lilly filed an appeal with the 7^th Circuit on December 16, 2025. I believe Lilly filed the appeal because Lilly thinks the FDA will come to a conclusion that retatrutide is not analogous to a protein and that FDA will do so in a manner that will withstand judicial scrutiny.

VI. The 7^th Circuit Litigation

On appeal, Lilly makes three arguments. First, Lilly argues again that retatrutide is a protein under FDA’s regulation and rehashes the absence of the repeat of the word alpha in the definition of protein as any alpha amino acid polymer.²⁹ In the pleadings, Lilly and FDA analogize the amino acid count and the meaning of the words to chocolate cake and student counts in classrooms, which, a reader may find entertaining if not illustrative. Second, that the District Court erred in remanding the analogous to a protein determination back to FDA, rather Lilly’s request for designation as a biologic should have taken effect. And third, that the District Court’s vacatur of FDA’s determination that retatrutide is not analogous to a protein required the FDA to take a second look and make another determination within 60 days.³⁰

The 7^th Circuit has set oral argument for September 24, 2026 at 9:30am central time. A date and time not to be missed for those interested.

VII. What’s Going to Happen?

This is what everyone wants to know, but there’s no way to know other than to wait. Amid all of this litigation, as mentioned at the very opening of this article, Lilly announced on July 23, 2026, that it intends to submit a BLA for retatrutide in Q1 2027. Lilly can submit whatever it wants, but FDA has authority to accept or reject a filing, generally within 60 days, for applications that do not contain, “all pertinent information and data.”³¹

Will the 7^th Circuit have decided Lilly’s appeal by the time Lilly intends to submit the BLA? Will the FDA have come to its conclusion regarding analogous to a protein as ordered by the District Court?

What is each party’s risk calculus?

Lilly possibly has little to lose other than the cost of the litigation since FDA already determined retatrutide to be a drug and any change in that decision to regulate retatrutide as a biologic would be a win for Lilly.

FDA, however, may have more at stake. FDA likely wants to hold onto its authority to decide what is a protein, what is analogous to a protein, and accordingly what is a drug and what is a biologic. A line from the District Court decision may frame the risk for FDA, “[t]he meaning of “analogous” is a question of law for the court to decide.”³² Following that proclamation the District Court went on to say, “courts have determined that whether a product is “similar or comparable to” a protein in the relevant respects is an issue of scientific fact best left to the FDA,” and that, “[e]ven in the wake of Loper Bright,³³ courts are permitted to leave those niche factual questions for the agency to decide.”³⁴

It’s possible the 7^th Circuit could read alpha out of the definition of protein contrary to the District Court’s reading of alpha into the definition. The 7^th Circuit possibly could decide the meaning of analogous is a question of law and that it should make that definitional decision rather than deferring to FDA. In each of these situations, FDA would lose ground on its interpretation of the meaning of words and, therefore, the regulation of products as it sees fit. Accordingly, FDA may be contemplating a way to allow retatrutide to be regulated as a biologic in order to moot the litigation and avoid any risk of the Court telling FDA what FDA’s words mean. In doing so FDA would lose the metaphorical retatrutide battle in order to win the broader protein regulation war on its own terms. It’s also possible though that the 7^th circuit will affirm the District Court’s order before Lilly submits the BLA, FDA defines analogous to a protein in a way that excludes retatrutide, and Lilly’s submission of a BLA would be nothing but a waste of time because FDA would have solid ground to reject the application and require Lilly to submit an NDA.

Citations

1. Lilly. News Release. Lilly’s triple agonist, retatrutide, successful in two additional Phase 3 obesity trials, delivering significant improvements in weight and A1C. July 23, 2026. ↩︎

2. Compare 42 U.S.C. § 262(k)(7) and 21 U.S.C. § 355(c)(3)(E) ↩︎

3. 21 U.S.C. § 353a. ↩︎

4. 21 U.S.C. § 355. ↩︎

5. 42 U.S.C. § 262. ↩︎

6. FDA has issued guidance describing enforcement discretion for repackaging biologics, but this is different from drug compounding starting with a bulk drug substance. See FDA, Mixing, Diluting, or Repackaging Biological Products Outside the Scope of an Approved Biologics License Application. Guidance for Industry. January 2018. ↩︎

7. 21 U.S.C. § 360bbb-2. ↩︎

8. ELI LILLY AND COMPANY, Plaintiff, v. Robert KENNEDY, Jr. in his official capacity, U.S. Department of Health and Human Services, Martin Makary in his official capacity, Food and Drug Administration, Defendants.

   Case No. 1:24-cv-01503-TWP-KMB. Signed October 3, 2025. 2025 WL 2844524. (Herein after “Lilly’s SD Indiana lawsuit.”). ↩︎

9. ELI LILLY AND COMPANY, Plaintiff-Appellant, v. ROBERT F. KENNEDY, JR., in his official capacity, et al., Defendants-Appellees. IN THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT. On Appeal from the United States District Court for the Southern District of Indiana, No. 1:24-cv-01503 (Pratt, J.) BRIEF FOR APPELLEES at 16. ↩︎

10. Id. (We note that 21 U.S.C. § 360bbb-2 requires FDA to make a decision within 60 days otherwise the classification by the submitter shall be considered a final determination, and while FDA made its drug determination within that time period from the time Lilly submitted an accepted filing, there is dispute in Lilly’s 7^th Circuit appeal regarding the effect of the court’s decision in Lilly’s SD Indiana lawsuit on this decision timeline. In this author’s opinion, a discussion of that issue at this time would detract from the overall narrative of this article). ↩︎

11. Lilly’s SD Indiana lawsuit at 2. ↩︎

12. Lilly’s SD Indiana lawsuit at 4. ↩︎

13. 42 U.S.C. § 262(i)(1) and 21 C.F.R. § 600.3(h). ↩︎

14. 21 C.F.R. § 600.3(h)(6). ↩︎

15. Lilly’s SD Indiana lawsuit at 6. ↩︎

16. Lilly’s SD Indiana lawsuit at 5 and 6. ↩︎

17. 21 C.F.R. § 600.3(h)(6). ↩︎

18. Without getting too much into the biochemistry, there are 20 alpha amino acids and hundreds of other non alpha amino acids. ↩︎

19. Lilly’s SD Indiana lawsuit at 6. ↩︎

20. Lilly’s SD Indiana lawsuit at 6. ↩︎

21. 21 C.F.R. § 600.3(h). ↩︎

22. Lilly’s SD Indiana lawsuit at 7, and 21 C.F.R. § 600.3(h). ↩︎

23. Lilly’s SD Indiana lawsuit at 7. ↩︎

24. Lilly’s SD Indiana lawsuit at 8, and Teva Pharms. USA, Inc. v. United States Food & Drug Admin., 514 F. Supp. 3d 66, 74 (D.D.C. 2020). ↩︎

25. Lilly’s SD Indiana lawsuit at 8. ↩︎

26. Lilly’s SD Indiana lawsuit at 8. ↩︎

27. FDA would need to give a reasoned explanation that survives judicial scrutiny, but it is possible FDA could do so. ↩︎

28. Lilly’s SD Indiana lawsuit. ↩︎

29. ELI LILLY AND COMPANY, Plaintiff-Appellant, v. ROBERT F. KENNEDY, JR., in his official capacity, et al., Defendants-Appellees. IN THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT. On Appeal from the United States District Court for the Southern District of Indiana, No. 1:24-cv-01503 (Pratt, J.) BRIEF OF APPELLANT at 18. ↩︎

30. Id at 18 and 19. ↩︎

31. 21 C.F.R. § 601.2(a), and FDA, Refuse to File: NDA and BLA Submissions to CDER Guidance for Industry DRAFT GUIDANCE. December 2017. ↩︎

32. Lilly’s SD Indiana lawsuit at 7 (citing Loper Bright, 603 U.S. at 391–92). ↩︎

33. Loper Bright was a Supreme Court case decided June 28, 2024 that shifted a longstanding framework for how much deference a court should give to decisions made by administrative agencies like FDA. ↩︎

34. Lilly’s SD Indiana lawsuit at 7. ↩︎