Hims shares plunge after FDA chief threatens action on 'illegal copycat drugs'

The U.S. Food and Drug Administration (FDA) will take swift action against companies that mass-market "illegal copycat drugs" by claiming they are similar to FDA-approved products, its commissioner Marty Makary said on Thursday.

Makary's comments came after online telehealth company Hims and Hers Health HIMS.N began offering a much cheaper $49 compounded version of Novo Nordisk's NOVOb.CO new Wegovy weight-loss pill.

Hims stock, which closed down 3.8% on Thursday, plunged 10% in after-hours trading after Makary's comment.

Hims' compounded drug is not FDA-approved and has not gone through clinical trials to prove efficacy. Compounding, in which pharmacies mix ingredients for specialized medicines or to copy a drug but at different dosages, has flourished as Americans chase cheaper prices for drugs.

"The FDA cannot verify the quality, safety, or effectiveness of non-approved drugs," Makary said in a post on social media platform X, without naming Hims. The FDA did not immediately respond to a request for further details.

Earlier in the day, Hims' launch of the cheap GLP-1 weight-loss pill sparked a selloff in Novo and Eli Lilly's LLY.N shares.

A Hims spokesperson said it has not compromised on safety or efficacy and that the company uses a technology based on liposomes that is intended to support absorption.

But Novo, which has seen strong demand in the U.S. for the weight-loss pill it launched early last month, said Hims' mass compounding was illegal and that it would take legal action to protect its intellectual property.

The Danish drugmaker' s CEO, Mike Doustdar, called the Hims' pill a waste of money, saying its own pill uses unique technology that aids in the absorption of the medicine.

Hims, Novo and Lilly did not immediately respond to Reuters' requests for comment on Makary's statement.

BITTER PILL

Novo launched its pill in January at $149 for first-time users and $199 after that. Hims is pricing its drug at $49 for the first month and $99 afterwards for those who purchase a five-month plan.

Lilly is also expected to launch its pill in April - which has weighed on Novo's stock - and has promised affordable pricing on the U.S. government's TrumpRx site. Lilly shares rose 1.6% after hours on Thursday.

Some analysts said Lilly's pill, an experimental GLP-1, could be a next target for compounded copies.

Last year, Novo and Hims walked away from a partnership that allowed the telehealth company to offer injectable Wegovy. Novo said Hims had wrongfully marketed versions of its medicine, while Hims accused Novo of attempting to control how its clinicians make decisions.

Hims has been tussling with Novo since it was allowed in 2023 by the U.S. FDA to sell versions of Novo's GLP-1 injectable drugs while the branded medicines were in short supply. Since then, it has made "personalized" copies of the branded drugs at different doses or regimens than those available from Novo and other drug companies.

In September, the FDA issued a warning to Hims regarding its marketing of compounded semaglutide, stating claims like "same active ingredient as Ozempic and Wegovy" are misleading.

-Carlos Méndez and Chris Thomas/Reuters