Novo Nordisk announced on Monday its decision to terminate its collaboration with Hims & Hers, a partnership that had previously aimed to provide the weight loss medication Wegovy to patients with a prescription but without insurance coverage. The original collaboration, unveiled in April, allowed for Novo Nordisk’s FDA-approved Wegovy to be offered on the Hims platform through NovoCare Pharmacy at a discounted price of $499 per month, in addition to Hims' monthly subscription fee. This bundled offering was initially hailed as a significant step in enhancing obesity care accessibility by pairing innovative treatments with a leading care platform.

However, the collaboration encountered a critical divergence, as Hims & Hers continued to sell “personalized” doses of compounded semaglutide, the primary active ingredient in Wegovy, for a significantly lower price of $165 per month. Novo Nordisk cited this practice as the reason for ending the partnership, alleging that Hims & Hers continued to offer compounded versions of Wegovy “under the false guise of 'personalization'” and engaged in “illegal sham compounding” that jeopardized patient health. Dave Moore, Novo Nordisk’s executive vice president of U.S. Operations, emphasized the company’s commitment to patient safety, stating that patients are entitled to receive authentic, FDA-approved and regulated Wegovy. Novo Nordisk also raised concerns about compounded semaglutide drugs using ingredients manufactured by foreign suppliers in China.

In response to Novo Nordisk’s decision, Andrew Dudum, CEO of Hims & Hers, expressed disappointment and accused Novo Nordisk’s commercial team of pressuring Hims to control clinical standards and steer patients towards Wegovy irrespective of individual clinical needs. Dudum characterized these demands as “anticompetitive” and an infringement on the independent decision-making of healthcare providers, limiting patient choice. He asserted that Hims & Hers would not compromise the integrity of its platform to appease a third party or preserve a collaboration, vowing to continue offering access to a range of treatments, including Wegovy, to meet diverse patient needs.

Wegovy is an injectable prescription medication approved by the U.S. Food and Drug Administration (FDA) for weight loss in individuals with obesity or those who are overweight with additional risks for cardiovascular disease. The controversy surrounding compounded drugs centers on their nature as copies of FDA-approved medications, made by licensed pharmacies but not subject to the same FDA approval or inspection processes. Drug compounding is generally permissible when FDA-approved drugs are on a shortage list or when a patient requires a specific alternative due to inability to take the manufactured version.

The context for this dispute is rooted in recent supply dynamics for popular weight loss and diabetes medications. Both Eli Lilly (maker of Zepbound and Mounjaro) and Novo Nordisk (maker of Ozempic and Wegovy) had faced shortages since 2022 due to overwhelming demand. However, both companies have since stated their ability to meet demand, leading the FDA to declare the shortages “resolved” and remove these drugs from its shortage list. Furthermore, a federal judge in Texas recently upheld the FDA’s decision, thereby blocking compounding pharmacies from producing copies of Wegovy and Ozempic.

The termination of the partnership had immediate financial repercussions. Hims & Hers stock plummeted 35% on Monday following the announcement, reflecting investor concerns over the development. Novo Nordisk’s stock also closed more than 5% lower. Hims & Hers’ stock has experienced significant volatility this year, having surged 20% in late April upon the initial collaboration announcement and then falling over 19% after Dudum’s earlier remarks about discontinuing sales of compounded versions of Novo’s weight loss drugs, opting instead for “personalized” dosages for clinical reasons. Despite the recent drop, Hims & Hers stock is still up 74% year-to-date, while Novo Nordisk is down 19% this year amid worries about losing market share to rival Eli Lilly.