GLP-1 Drugmakers Face New Legal Front Over Vision Loss Claims
Lawsuits alleging drugs like Ozempic and Mounjaro cause severe eye damage are being consolidated, adding to existing litigation over stomach paralysis.
Shares of Eli Lilly (NYSE: LLY) and Novo Nordisk (NYSE: NVO) faced pressure Wednesday as the pharmaceutical giants confront a widening legal battle over the side effects of their blockbuster GLP-1 weight-loss and diabetes drugs. A federal judicial panel has moved to centralize lawsuits alleging the medications can cause a form of severe vision loss, opening a new front of litigation beyond the widely reported claims of stomach paralysis.
The U.S. Judicial Panel on Multidistrict Litigation (JPML) has created a new MDL to consolidate cases claiming that drugs like Ozempic, Wegovy, Mounjaro, and Zepbound lead to non-arteritic anterior ischemic optic neuropathy (NAION), a condition that can cause sudden and permanent vision loss. This legal maneuver signals that the number of plaintiffs is growing and that the courts see sufficient merit in the claims to streamline the cases into a single federal proceeding.
This development adds another layer of legal risk for the two companies, whose valuations have soared to make them the largest in the pharmaceutical industry on the back of unprecedented demand for these treatments. Eli Lilly, with a market capitalization approaching $920 billion, and Novo Nordisk, valued at over $220 billion, have seen their stock prices surge over the past two years.
However, that success has been shadowed by mounting legal scrutiny. An existing MDL is already underway in the Eastern District of Pennsylvania, consolidating thousands of lawsuits from patients who allege the drugs caused severe gastroparesis, or stomach paralysis. The addition of vision-loss claims to the legal challenges represents a significant expansion of potential liability for the manufacturers.
The new lawsuits concerning vision loss follow reports and studies suggesting a potential link. One study presented at the American Academy of Ophthalmology highlighted a significantly higher incidence rate of NAION in patients using semaglutide, the active ingredient in Novo Nordisk's Ozempic and Wegovy. European regulators have also taken note, with the European Medicines Agency's safety committee recommending a label update to warn about the risk of NAION with GLP-1 drugs.
In afternoon trading, Eli Lilly shares were down approximately 1.4% to $1,039.89, while Novo Nordisk fell about 1.6% to $48.16. While these declines are modest relative to the stocks' remarkable gains, they reflect investor concern over the long-term financial implications of the litigation.
To date, the legal challenges have not significantly dented sales or dampened analyst enthusiasm for the long-term growth trajectory of the GLP-1 market, which is projected to exceed $100 billion annually. However, the creation of a new MDL for a distinct and serious side effect underscores a persistent and growing risk. Investors will be closely watching the number of cases that are added to both the gastroparesis and vision-loss litigations, as they could eventually lead to substantial settlements or jury awards, similar to those seen in past large-scale pharmaceutical legal battles.