Hims & Hers Health, Inc. (HIMS) has retreated from a controversial foray into the weight-loss drug market, announcing on it will halt sales of its compounded semaglutide pill. The move follows mounting pressure from both Novo Nordisk, the maker of the popular Wegovy, and the U.S. Food and Drug Administration (FDA).
The telehealth company had sought to offer a cheaper alternative to Wegovy, with plans to price the compounded medication as low as $49 for the first month, significantly undercutting Novo Nordisk’s roughly $100 higher price point. This strategy, however, quickly drew the ire of the pharmaceutical giant, which threatened legal action, alleging “illegal mass compounding.”
Novo Nordisk’s concerns centered on the practice of compounding, where pharmacies create customized medications by combining ingredients. While legal in certain circumstances, the company argued that Hims & Hers’ approach constituted unlawful mass compounding, circumventing the rigorous regulatory processes required for FDA-approved drugs. Novo Nordisk stated this was “another example of Hims & Hers’ historic behaviour of duping the American public with knock-off GLP-1 products,” and referenced previous FDA warnings regarding the company’s advertising of similar products.
The FDA swiftly escalated the situation, announcing on its intention to take legal action against Hims & Hers. The agency’s plan included restricting access to the ingredients used in the compounded pill and referring the matter to the Department of Justice. This regulatory intervention proved decisive, prompting Hims & Hers to reverse course.
In a statement posted on social media, Hims & Hers affirmed its “deep commitment to the safety and best interests of consumers and in compliance with applicable law.” The company stated it had engaged in “constructive conversations with stakeholders across the industry” and, decided to discontinue offering the compounded semaglutide pill. The statement emphasized the company’s continued dedication to providing “safe, affordable, and personalized care” to its millions of customers.
The episode highlights the growing scrutiny surrounding compounded drugs, particularly those mimicking popular and often expensive medications like Wegovy and Ozempic. The FDA has been increasingly focused on ensuring the safety and efficacy of these compounded products, as concerns rise about inconsistent quality and potential health risks. Recent reports indicate that online pharmacies continue to sell cheap copycat versions of Ozempic and other weight loss drugs, despite new FDA rules aimed at curbing such practices.
The timing of this withdrawal is particularly noteworthy, as Hims & Hers is preparing to air a Super Bowl advertisement on . The ad, featuring rapper Common, aims to draw attention to the link between wealth inequality and health disparities, with the message that “America’s wealth gap has turned into a health gap.” The company anticipates the advertisement will “ruffle some feathers,” suggesting a deliberate attempt to position itself as a disruptor challenging the status quo in healthcare access.
However, the controversy surrounding the compounded Wegovy pill casts a shadow over this messaging. While the ad seeks to portray Hims & Hers as a champion of affordability, the company’s attempt to undercut Novo Nordisk through a potentially legally questionable route raises questions about its commitment to regulatory compliance and patient safety. The company’s stock price fell 8% following Novo Nordisk’s initial legal threat, according to reports, indicating investor concern about the potential financial and reputational repercussions.
The broader implications of this situation extend beyond Hims & Hers and Novo Nordisk. It underscores the challenges of balancing innovation, affordability, and patient safety in the rapidly evolving pharmaceutical landscape. The FDA’s increased scrutiny of compounded drugs signals a tightening of regulations, which could impact the availability and cost of customized medications. The episode highlights the growing demand for weight-loss drugs like Wegovy and Ozempic, and the potential for market exploitation as companies seek to capitalize on this demand.
For investors, the situation serves as a reminder of the regulatory risks associated with companies operating in the healthcare sector. Hims & Hers’ experience demonstrates that aggressive strategies to disrupt established markets can quickly encounter legal and regulatory hurdles. The company’s ability to navigate these challenges and maintain its growth trajectory will be closely watched in the coming months.
