Novo Nordisk ends Wegovy take care of Hims & Hers

Novo Nordisk on Monday said it’s ending its collaboration with Hims & Hers because of concerns concerning the telehealth company’s sales and promotion of cheaper knock-offs of the load loss drug Wegovy. 

Shares of Hims & Hers closed greater than 34% lower on Monday, while Novo Nordisk’s stock closed greater than 5% lower.

Novo Nordisk in April said it might offer Wegovy through several telehealth firms comparable to Hims & Hers to expand access to the blockbuster injection now that it isn’t any longer in brief supply within the U.S. 

The tip of the Wegovy shortage meant compounding pharmacies were legally restricted from making and selling cheaper, unapproved versions of the drug by May 22 – with rare exceptions. Telehealth firms have said patients should still need personalized compounded versions of Wegovy in situations where it’s medically crucial.

But Novo Nordisk on Monday said Hims & Hers has “didn’t adhere to the law which prohibits mass sales of compounded drugs” under the “false guise” of personalization. The drugmaker also accused Hims & Hers of “deceptive” marketing that’s putting patient safety in danger.

“We expected that the efforts towards compounding personalization would diminish over time. After we didn’t see that, we had to select on behalf of patients,” Dave Moore, Novo Nordisk’s executive vp of U.S. operations, told CNBC. “We have been firm all along that patient safety is our primary focus.”

“Our expectation was that [Hims & Hers’] business focus would transfer toward real, protected, approved medications,” he said. Moore said Novo Nordisk is not going to incur any fees from terminating the collaboration, because it was established through a third-party that manages the drugmaker’s direct-to-consumer online pharmacy

In a statement on X, Hims & Hers CEO Andrew Dudum said the corporate is “disenchanted to see Novo Nordisk management misleading the general public.”

Dudum said in recent weeks, Novo Nordisk’s business team has “increasingly pressured us to regulate clinical standards and steer patients to Wegovy no matter whether it was clinically best for patients.” He added Hims & Hers plays a task in protecting the power of providers and patients to regulate individual treatment decisions, and “is not going to compromise the integrity of our platform to appease a 3rd party or preserve a collaboration.”

He said Hims & Hers will proceed to supply several treatments, including Wegovy, to permit providers to fulfill the person needs of patients.

In a note on Monday, Citi analyst Daniel Grosslight said the tip of the collaboration increases Hims & Hers’ legal risk “substantially.” He added that he was surprised the partnership, when initially announced, didn’t include any efforts to curb the telehealth company’s compounding efforts.

During Food and Drug Administration-declared shortages, pharmacists can legally make compounded versions of brand-name medications. They may also be produced on a case-by-case basis when it’s medically crucial for a patient, comparable to when they cannot swallow a pill or are allergic to a selected ingredient in a branded drug. 

But drugmakers and a few health experts have pushed back against the practice, largely since the FDA doesn’t approve compounded drugs.

Novo Nordisk said it’s going to proceed offering the branded version of Wegovy through telehealth organizations that “share our commitment to protected and effective medical treatment for patients living with chronic diseases.”

Moore said Novo Nordisk has seen several other mass compounding pharmacies reduce or stop making and selling Wegovy knock-offs. He added that the corporate will “engage on the legal front” and with the FDA to be sure that illegal compounding diminishes.

In a release on Monday, Novo Nordisk said it conducted an investigation that found the energetic ingredients utilized in Wegovy knock-offs sold by telehealth firms and compounded pharmacies are manufactured by foreign suppliers in China. The drugmaker also cited a report from the Brookings Institution in April, which found that a big share of those Chinese suppliers were never inspected by the FDA, and plenty of that were inspected had drug quality assurance violations. 

“These medicines which are coming into our country from sources world wide are usually not even approved in those countries that they originated, and it’s an issue,” Moore said.