TLDR
- Hims & Hers removed its $49 compounded pill mimicking Wegovy just two days after launching it, due to regulatory pressure and a Department of Justice referral
- HIMS stock fell 16% in after-hours trading, whereas Novo Nordisk’s shares rose more than 10% in response to the news
- The FDA Commissioner issued a warning about taking “swift action” against firms that mass-market illegal copycat drugs claiming similarity to approved products
- The Department of Health and Human Services referred Hims to the DOJ over potential violations of the Federal Food, Drug, and Cosmetic Act
- Unlike Novo Nordisk’s Wegovy, the compounded pill did not undergo FDA review or get approved for safety or effectiveness
Hims & Hers Health took its compounded weight-loss pill off the market on Saturday. The company had launched the Wegovy copy just two days prior. Federal regulators ramped up pressure on the telehealth company right after its Thursday announcement.
The company priced the pill at $49 per month. Novo Nordisk’s Wegovy, by contrast, costs $149 monthly. The price gap quickly drew attention.
Mike Stuart of the Department of Health and Human Services wrote on X Friday afternoon that his agency referred Hims to the Department of Justice. The referral involves potential violations of the Federal Food, Drug, and Cosmetic Act, and also covers applicable Title 18 provisions for federal crimes.
HIMS stock fell 16% in after-hours trading Friday. Novo Nordisk’s shares rallied more than 10% during the regular session. The Danish drugmaker’s stock jumped another 4.2% after hours.
The Regulatory Crackdown
FDA Commissioner Dr. Marty Makary posted on X Thursday about taking “swift action against companies mass-marketing illegal copycat drugs.” He didn’t name specific companies. The timing matched Hims’ announcement exactly.
U.S. law permits compounded drugs under limited circumstances. But regulators warned that misleading advertising creates problems. Companies can’t imply their products have similar effects to FDA-approved drugs.
The Hims product never received FDA review or approval. Wegovy went through the full approval process. That distinction matters to regulators.
Novo Nordisk called the Hims product “illegal” in a Thursday statement. The company said it “poses a risk to patient safety.” Hims responded on X that big pharma companies regularly suggest accessible approaches are dangerous.
Company Response and Market Impact
Hims said it held “constructive conversations with stakeholders across the industry” before pulling the product. The company stated it remains “committed to the millions of Americans who depend on us for access to safe, affordable, and personalized care.”
This marks the first time Hims withdrew a copycat product after a competitor complained. Telehealth firms have sold lower-cost versions of GLP-1 weight-loss drugs for years. Drug shortages made compounding more common.
Supply shortages have now eased. Regulators appear more willing to limit the practice. Both Novo Nordisk and Eli Lilly have pushed the FDA to crack down on knockoff drugs.
Hims CEO Andrew Dudum previously said he wouldn’t “cave” to pharma demands. The company changed course within 48 hours this time. Novo and Hims have past tension. The two companies planned a partnership on discounted weight-loss shots last year. It ended early when compounding didn’t stop as agreed. Novo executive Ludovic Helfgott said at the time, “We had an agreement that the mass compounding would stop, and unfortunately, it didn’t stop.”
Analysts maintain a Hold rating on HIMS with an average price target of $38.14. That implies 65.68% upside from current levels. The regulatory setback complicates the company’s expansion into the weight-loss market.
Hims dropped 2% Friday during regular trading before the after-hours plunge. The company said Friday it has “always operated with a deep commitment to the safety and best interests of consumers.”
