On Friday, Judge Carter granted defendant Zealthy Inc.’s motion to dismiss claims brought by Novo Nordisk under the Lanham Act and New York General Business Law. Novo Nordisk alleged that Zealthy, which markets compounded GLP-1 medications, falsely represented to consumers that those products were equivalent to Novo Nordisk’s FDA-approved medications like Ozempic and Wegovy. Compounded medications (mixed by a doctor or pharmacist for an individual patient) are not FDA-approved, even if legal to prescribe.

Novo Nordisk pointed to a cluster of statements on Zealthy’s website: that “GLP-1 medications, with active ingredient semaglutide, are FDA-approved for type 2 diabetes”; that a clinician “might prescribe FDA-approved medications like Wegovy or its active ingredient, semaglutide”; that Zealthy offers “FDA-approved weight loss medications, including semaglutide”; and similar language elsewhere describing “FDA-approved medications such as semaglutide.” Novo Nordisk argued that these statements falsely indicate that Zealthy’s compounded products are FDA-approved.

But Judge Carter ruled that Novo Nordisk failed to plead that these statements were either “literally or impliedly false,” as required to state a false advertising claim. Zealthy helps customers access Novo Nordisk’s own FDA-approved products, and one reasonable reading of the statements about FDA approval is that Zealthy was referring to that aspect of its business, not its compounded medications. Relatedly, Novo Nordisk did not sufficiently plead that consumers were deceived by the potential ambiguity:

Because Defendant facilitates prescription of Plaintiff’s FDA-approved medications, such statements could reasonably describe Plaintiffs’ own medications–not compounded semaglutide product. Despite reading the Complaint in an effort to raise the strongest arguments, Defendant’s statements are “susceptible to more than one reasonable interpretation” and thus not literally false.

Even if the Court  construes Defendant’s statements as misleading, Plaintiffs must still allege actual consumer confusion or deliberate deception to establish implied falsity. … In their Complaint, however, Plaintiffs fail to do any more than identify a broad set of potential patients who could be deceived. … Plaintiffs make conclusory allegations of consumer confusion, but they offer no specific factual allegations of mistaken consumer beliefs to support their claims. Plaintiffs therefore fail to make the showing of consumer confusion required to plead a claim of implied falsity.

Judge Carter granted Novo Nordisk leave to amend.