U.S. telehealth company Hims & Hers said on the 7th (local time) that it will halt sales of its low-cost compounded drug using Wegovy, a glucagon-like peptide-1 (GLP-1) obesity pill, just two days after launch.
The move came a day after the U.S. Food and Drug Administration (FDA) warned it would step up enforcement against compounded drugs using GLP-1 ingredients. Following Hims & Hers' sales move and the FDA warning, shares of Novo Nordisk, Eli Lilly and Company, and Hims swung.
Hims & Hers said the same day that it decided to stop offering the product after having constructive conversations with stakeholders across the industry since launching compounded semaglutide (the ingredient in Wegovy) pills.
Novo Nordisk's Wegovy pill won FDA approval in Dec. last year and launched in the United States in early Jan. this year. It is being sold starting at $149 a month for cash-pay patients (about 218,000 won). The market views the product as Novo's key card to regain leadership in the obesity drug market, some of which it ceded to Eli Lilly and Company.
However, controversy erupted when Hims & Hers moved to sell a compounded version of the Wegovy pill on the 5th (local time). Hims & Hers set the monthly subscription fee at $49 (about 71,000 won).
Compounding is a customized medication manufacturing method in which a pharmacist, under a doctor's prescription, adjusts dosage, ingredients, and formulation using marketed drugs or raw materials to suit a specific patient. In the United States, it is allowed only under conditions set by law. For example, when a marketed drug is out of stock or in short supply, or when a patient cannot use an existing product due to an allergy.
While GLP-1 obesity and diabetes treatments were temporarily allowed to be compounded due to initial supply shortages after launch, supply constraints for the main GLP-1 products from Novo Nordisk and Eli Lilly and Company have now been resolved, and the Wegovy pill was never on the shortage list to begin with.
News of Hims' pill launch sent shares of Novo Nordisk and Eli Lilly and Company tumbling. Lilly, which has the obesity drug Mounjaro, also plans to launch its own GLP-1 pill in the United States in Apr.
But the situation flipped when the FDA stepped in. The FDA said it plans to tighten regulation of GLP-1 compounded drugs sold by Hims and some online pharmacies, citing concerns about quality, safety, and potential violations of federal law.
Marty Makary, the FDA Director General, said, "We will take swift action against corporations that mass-market illegal copycat drugs that claim to be similar to FDA-approved medicines," adding, "The quality, safety, and effectiveness of unapproved drugs cannot be verified."
After the FDA's statement was released, shares of Novo Nordisk and Eli Lilly and Company rose, recovering earlier losses. Hims' shares, by contrast, fell about 15%.
Earlier, the U.S. Department of Health and Human Services (HHS) also said it would refer the matter to the Department of Justice (DOJ). Novo Nordisk strongly objected, saying Hims' product used the active ingredient of its Wegovy as is, and also warned of possible litigation.