The first "AI unicorn" Medvi's myth reversal has uncovered a gray medical chain.

Original Title: The First “AI Unicorn” Medvi Myth Reversal Unveils a Gray Medical Chain

Original Author: Thinking Weird

Original Source:

Reprint: Mars Finance

On April 2, The New York Times published a long article about a telemedicine company called Medvi: founder Matthew Gallagher used more than a dozen AI tools such as ChatGPT, Claude, Grok, and others, spending two months and $20,000 to set up the entire company, with his brother as the only employee. In 2025, it sold for $400 million, and in 2026, it is expected to reach $1.8 billion. After Sam Altman read it, he said, “I’ll bet with the CEOs of tech companies on when AI will spawn billion-dollar-per-person companies—and it looks like I’ve won. Really want to meet this person.”

Four days later, the whole story collapsed.

You might think this is just another “AI scam,” but what’s truly interesting about this story isn’t the AI—it’s the complete gray pharmaceutical industry chain behind it. To understand Medvi, you first need to understand what’s happening in the U.S. GLP-1 weight-loss drug market.

GLP-1 Weight-Loss Drugs: A Hundred-Billion-Dollar Market

GLP-1 drugs (semaglutide and tirzepatide) are the hottest prescription weight-loss medications in recent years. They suppress appetite and delay gastric emptying by mimicking gut incretin hormones. In 2025, about 9 million people in the U.S. are using them—roughly 1 out of every 28 adults. Just Eli Lilly’s tirzepatide (brand name Mounjaro/Zepbound) alone is expected to generate $36.5 billion in global sales in 2025.

The problem is the price. Wegovy (injectable semaglutide for weight loss) is about $1,349 per month, while Zepbound (injectable tirzepatide for weight loss) is about $1,060 per month. Large numbers of American consumers want to use them but can’t afford them, especially self-paying patients whose insurance doesn’t cover them.

Regulatory loophole: the “drug shortage” gate opens

U.S. federal law includes a provision: when the FDA determines that a certain drug is in a “shortage” status, licensed compounding pharmacies may legally compound a compounded version of that drug. In 2023–2024, due to a surge in demand, the FDA first announced shortages of semaglutide and then tirzepatide. The gate opened.

A large number of compounding pharmacies flooded in, compounding generic GLP-1 versions priced as low as $100 to $300 per month—far below the brand-name drugs. Telemedicine companies handle patient acquisition and issuing prescriptions, while compounding pharmacies handle production and shipping. In just a few months, a full industry chain formed.

In early 2025, the FDA ended the shortage statuses for both drugs in succession, giving compounding pharmacies a few months of transition period. Under the law, after June 2025, except for a very small number of rare cases, all compounded GLP-1 products had become illegal. But the market didn’t shrink—it expanded instead. Many compounding pharmacies add ingredients such as vitamin B12 to the drugs, claiming that once “something is added,” it no longer counts as a “basic generic,” trying to get around the ban.

Since this year, the FDA has started large-scale enforcement: issuing thousands of warning letters, Novo Nordisk suing Hims & Hers (one of the largest telemedicine platforms in the U.S.), and the case ultimately ending in a settlement between Hims & Hers and Novo Nordisk, with genuine drugs being resold afterward.

Medvi exploded during this window.

What exactly is Medvi

Medvi itself doesn’t do any medical-related work. It doesn’t hire doctors, doesn’t prescribe drugs, doesn’t compound drugs, and doesn’t ship products. The only thing it does is customer acquisition.

All medical steps are outsourced to a company called OpenLoop Health. OpenLoop claims to be a “white-label telemedicine infrastructure provider,” offering a full, ready-to-launch service package for anyone who wants to build a telemedicine brand: more than 20,000 contracted doctors covering all 50 U.S. states, prescription workflows, compliance architecture, and a technology platform. Clients only need to set up a marketing front end to start selling drugs immediately.

Consumers fill out a questionnaire on Medvi’s website → after OpenLoop’s contracted doctors review it, they issue prescriptions → the prescriptions are sent to the compounding pharmacy Triad Rx → Triad Rx compounds and ships the medications. Medvi is just one of the consumer-facing fronts in this pipeline.

Health API Guy summarized key details from court documents: OpenLoop is a family business. Jon Lensing owns OpenLoop Health (the technology platform); his father Dale Lensing is an executive at OpenLoop Healthcare Partners (the medical group that issues prescriptions); and Triad Rx (the compounding pharmacy) is also controlled by the Lensing family. The same family controls the entire chain—from the platform to prescriptions to compounding.

Potentially useless drugs

Here is a problem far more serious than false advertising.

One of Medvi’s core products is an oral tirzepatide tablet. Tirzepatide is a peptide molecule (an amino-acid chain). In the human body, peptides are rapidly broken down by stomach acid and digestive enzymes. So the tirzepatide approved by the FDA (Zepbound/Mounjaro) exists only as an injectable formulation. It is delivered directly into tissues via subcutaneous injection, completely bypassing the digestive system.

For the oral version to work, it needs specialized absorption-enhancing technology to protect the drug molecules from being destroyed by stomach acid. Novo Nordisk spent years developing a patented technology called SNAC, which made oral semaglutide (Rybelsus) possible. Eli Lilly took a different route: it did not attempt to develop an oral tirzepatide. Instead, it developed a brand-new small-molecule drug called orforglipron (brand name Foundayo). This small molecule naturally resists stomach acid and was just approved by the FDA on April 1 this year.

Eli Lilly’s statement on this is very direct: “There are no human studies regarding oral tirzepatide products—let alone clinical trials. Anyone selling oral tirzepatide is conducting experiments on uninformed Americans.”

A RICO lawsuit accuses OpenLoop and Triad Rx of selling oral tirzepatide “without validated absorption mechanisms or efficacy.” The plaintiffs’ attorneys say that for oral tirzepatide to be absorbed properly by the human body is “chemically impossible.” In March this year, a preprint paper also found that many compounded tirzepatide/B12 mixed products contain a “novel, widely present unknown toxic impurity.”

Put simply: the oral tirzepatide tablets consumers pay several hundred dollars for each month are very likely to be broken down by stomach acid before reaching the bloodstream, based on existing scientific evidence.

A $400 million customer acquisition machine

Since the product itself may be ineffective, how does Medvi generate $400 million in sales? The answer is extremely aggressive affiliate marketing.

Court documents show Medvi massively buys traffic through affiliate marketers and pays per conversion. The biggest one is a Canadian company called The Offer, which brings Medvi “tens of millions of dollars” in revenue every month. These affiliate marketers attract customers using various methods: more than 5,000 active ads on Meta; heavy use of AI-generated fake doctor images (names include “Professor Albust Dongledore” and “Dr. Tuckr Carlzyn MD”); face-swapped weight-loss comparison photos stolen from Reddit; and more than 100,000 spam emails every year.

Medvi’s own website disclaimer says: “The people appearing in our ads may be actors or AI-portrayed doctors, not licensed medical professionals.”

Later, The Offer was acquired by Medvi’s competitor Remedy Meds. Medvi then discovered that all of its year’s operational data had ended up in the competitor’s hands. So Medvi refused to pay $1.06 million in commissions and removed tracking pixels. The Offer sued, seeking to freeze Medvi’s assets. Gallagher submitted an affidavit opposing the freeze, arguing that the company is solvent and doesn’t need asset freezes. But in the affidavit, he also admitted that Medvi simply didn’t want to pay the money. The court didn’t buy it and approved asset freezes on Medvi and on Gallagher personally.

What The New York Times missed

The New York Times report completely omitted the FDA warning letters (issued in February), the class-action lawsuit (filed in March), the controversy over the efficacy of oral tirzepatide, and the fact that Medvi has been sued three times. All of these are public information that can be found by simply Googling.

More ironically, Medvi previously displayed the logo of The New York Times on its official website, pretending it had been covered by the media. Then The New York Times actually wrote this promotional piece. TechDirt founder Mike Masnick said: “The New York Times has become a real endorsement backing up false credibility.”

The complete chain

The OpenLoop family provides a full pipeline from prescriptions to compounding and shipping, selling “ready-to-launch telemedicine brand” solutions to the outside world. Gallagher used AI tools to build a marketing front-end access pipeline, and then hired affiliate marketers for massive traffic buying. Affiliate marketers use fake doctors, face-swapped photos, and spam to acquire customers. Consumers place orders on Medvi’s site; OpenLoop’s doctors issue prescriptions; and the Lensing-family pharmacy compounds a potentially stomach-acid-degradable oral tablet and ships it out. AI allows just two people to operate a content production and delivery machine that would normally require a whole team.

This story isn’t “AI helped one person reach a billion dollars.” This story is: a gray pharmaceutical industry chain exploiting regulatory loopholes + extremely rigid consumer demand + AI boosting the production efficiency of deceptive marketing to an unprecedented level. And The New York Times packaged it as a startup success story of the AI era, with Sam Altman using it as evidence that his predictions have come true.