Hims & Hers stock plunged around 30% on Monday after drugmaker Novo Nordisk abruptly ended a month-long collaboration to make its weight loss drug Wegovy available on the telehealth company's platform.
Novo Nordisk cited concerns about Hims & Hers selling and promoting knock-off compounded GLP-1 drugs, which are more affordable versions of the popular weight loss medications.
Direct access to Wegovy will no longer be available to Hims & Hers Health via the company's online pharmacy, NovoCare Pharmacy, the company said in a press release.
In late April, the Food and Drug Administration resolved the Wegovy shortage based on its conclusion that Novo Nordisk is fully meeting current and projected nationwide demand for this medicine. Novo Nordisk then began collaborating with telehealth companies Hims & Hers, LifeMD and Ro to expand access to Wegovy.
Through that partnership, patients could access the branded GLP-1 drug, at a discount, through the company's online pharmacy, NovoCare Pharmacy, directly through the telehealth platforms of Hims & Hers.
Novo Nordisk claimed that Hims & Hers was breaking the law by continuing to sell compounded semaglutide, the active ingredient in Novo’s Wegovy and Ozempic drugs, along with Novo's branded drugs.
"Over one month into the collaboration, Hims & Hers has failed to adhere to the law, which prohibits mass sales of compounded drugs under the false guise of 'personalization' and are disseminating deceptive marketing that put patient safety at risk," the pharma giant said.
"Novo Nordisk is firm on our position and protecting patients living with obesity. When patients are prescribed semaglutide treatments by their licensed healthcare professional or a telehealth provider, they are entitled to receive authentic, FDA-approved and regulated Wegovy," said Dave Moore, Executive Vice President, US Operations of Novo Nordisk, in a statement. "We will work with telehealth companies to provide direct access to Wegovy that share our commitment to patient safety—and when companies engage in illegal sham compounding that jeopardizes the health of Americans, we will continue to take action."
In a statement issued Monday afternoon, Hims & Hers CEO Andrew Dudum hit back, asserting that the drugmaker was "misleading the public" and insisted that the online health and wellness company wants to offer patients a range of options for weight loss medications.
"In recent weeks, Novo Nordisk’s commercial team increasingly pressured us to control clinical standards and steer patients to Wegovy regardless of whether it was clinically best for patients. We refuse to be strong-armed by any pharmaceutical company’s anticompetitive demands that infringe on the independent decision making of providers and limit patient choice," Dudum said in a statement to Fierce Healthcare. "We take our role of protecting the ability of providers and patients to control individual treatment decisions extremely seriously, and will not compromise the integrity of our platform to appease a third party or preserve a collaboration. The health and wellness of individuals always comes first. We will continue to offer access to a range of treatments, including Wegovy, to ensure providers can serve the individual needs of patients."
With the partnership announced in April, Novo appeared to have struck a truce with Hims & Hers after the two sparred over the telehealth company's practice of selling compounded versions of semaglutide.
In January, Hims & Hers aired a Super Bowl ad that featured a montage of junk food, abdominal fat, statistics about the health risks of obesity and Big Pharma's high prices. The ad then promoted Hims & Hers' weight loss products, including compounded GLP-1 medications, as an alternative to pricey branded GLP-1s such as Ozempic and Wegovy.
Novo Nordisk hit back almost immediately, placing an ad in The New York Times and USA Today called "Check Before You Inject." A company spokesperson said, at the point, that the ad was a "direct response" to the Hims & Hers' Super Bowl commercial.
Hims & Hers and other telehealth companies took a hit when the FDA announced that semaglutide was no longer in short supply, making it ineligible for compounding. Manufacturers of compounded semaglutide and some telehealth players had built up a market selling cheaper alternatives to branded weight loss drugs.
The U.S. allows compounding pharmacies to manufacture close approximations of branded drugs when the reference drug is in short supply. The FDA's announcement that the shortage was resolved means compounding of semaglutide will no longer be permitted under current regulations.
Novo Nordisk launched its online pharmacy in March to offer a direct-to-patient channel for selling its weight loss drugs. Self-paying consumers can buy Wegovy for $499 per month through NovoCare Pharmacy.
In just 18 months, weight loss has become one of Hims & Hers' largest specialties, CEO Andrew Dudum told investors during its Q1 earnings call in May. Earlier this year, the company began selling a generic version of Novo Nordisk's diabetes drug, liraglutide. The company also continued to sell personalized doses of semaglutide "for the subset of consumers for whom it is a clinical necessity," Dudum said.
Novo Nordisk cited patient safety concerns over "foreign illicit active pharmaceutical ingredients" in knock-off versions of GLP-1 drugs.
The drugmaker said, based on its investigation, the "semaglutide" active pharmaceutical ingredients that are in the knock-off drugs sold by telehealth entities and compounding pharmacies are manufactured by foreign suppliers in China.
The pharma giant cites a report from the Brookings Institute that the FDA has never authorized or approved the manufacturing processes used by any of these foreign suppliers to make semaglutide, nor has the FDA ever reviewed or authorized the quality of the "semaglutide" they produce.
The report also found that a "large share of [these Chinese suppliers] were never inspected by FDA, and many of those that were [inspected] had drug quality assurance violations," according to Novo Nordisk.
Editor's Note: This story has been updated to include a statement from Hims & Hers CEO Andrew Dudum.