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Prediction market on metaculus. Eli Lilly is developing retatrutide (LY-3437943), a triple hormone receptor agonist (GLP-1/GIP/glucagon) for obesity and type 2 diabetes. In early 2024, Lilly requested the FDA classify retatrutide as a [biologic product](https://www.fda.gov/about-fda/center-biologics-evaluation-and-research-cber/what-are-biologics-questions-and-answers) rather than a traditional small-molecule drug. The FDA [rejected this request](https://www.goodwinlaw.com/en/insights/blogs/2024/09/eli-lilly-files-suit-challenging-the-fdas-drug-classification-of-retatrutide) in March 2024, determining that retatrutide does not meet the regulatory definition of a "protein" because it contains at most 40 alpha amino acids, not exceeding the agency's threshold of greater than 40. Biologic classification carries significant commercial advantages: 12 years of market exclusivity (versus 5 for drugs), delayed eligibility for [Medicare price negotiation](https://www.kff.org/medicare/issue-brief/explaining-the-prescription-drug-provisions-in-the-inflation-reduction-act/) under the Inflation Reduction Act (13 years versus 9), stronger barriers against compounding pharmacies, and weaker biosimilar competition compared to generics. In September 2024, Lilly [sued the FDA](https://www.bigmoleculewatch.com/2024/09/24/eli-lilly-files-suit-challenging-the-fdas-drug-classification-of-retatrutide/) in the Southern District of Indiana, arguing the classification was arbitrary and capricious. In September 2025, the [district court vacated](https://www.goodwinlaw.com/en/insights/publications/2025/10/alerts-lifesciences-district-court-sets-aside-fda-interpretation) the FDA's decision, finding the agency's reasoning on the "analogous to a protein" standard did not hold up, but stopped short of ordering biologic classification, instead remanding the issue to the FDA. Lilly [appealed to the Seventh Circuit](https://endpoints.news/lilly-appeals-retatrutide-classification-ruling-in-case-that-could-impact-compounders/) in early 2026, seeking a direct ruling that retatrutide qualifies as a biologic. Two prior challenges to FDA drug-vs-biologic classifications, Teva's Copaxone and Ipsen's Somatuline Depot, both resulted in courts upholding the FDA's drug classification. However, the Supreme Court's 2024 *Loper Bright* decision, which eliminated Chevron deference to agencies on statutory interpretation, has shifted the legal landscape in favor of challengers like Lilly.
Resolves: 12/31/2028.