Novo Nordisk’s stock dove 7% on Thursday just after an announcement from a key competitor.
The drop came just after telehealth company Hims & Hers announced it will offer a new version of the treatment, made from the same active ingredient, semaglutide, for a fraction of Novo Nordisk’s price. The telehealth site will offer the treatment at an introductory price of $49, the announcement said. After the introductory offer ends, patients with a five-month subscription will pay $99 monthly for the treatment. Novo Nordisk sells the weight-loss drug for $149.
Hims & Hers had already been offering the treatment in an injectable form, but the oral version is new for the brand. “We’re excited to find ways to continue bringing branded treatments to the platform across specialties. More choice on the platform is the best thing for customers everywhere,” said Hims CEO Andrew Dudum in a statement.
While the announcement spurred Novo Nordisk’s stock to reach its lowest level since July 2021, it wasn’t the only company that saw its stock slip on Thursday. Eli Lilly’s fell by up to 6.1% on the announcement. Meanwhile, Hims and Hers Health stock surged 19% on Thursday.
On Wednesday, Novo CFO Karsten Munk Knudsen told Reuters that the company is “frustrated” with “mass marketing” of knock-off versions of the drug which was “unapproved by the FDA.” The CFO warned of unprecedented pricing pressure as competition grows in the weight-loss drug market, added that it’s a challenge to predict “if and when the tide turns” for the brand.
Per Hims & Hers announcement, the company said that safety is the brand’s “top priority.” It continued, “The Compounded Semaglutide Pill joins a wide range of other weight loss treatments accessible through our platform, all of which meet rigorous clinical standards.”
“The action by Hims & Hers is illegal mass compounding that poses a significant risk to patient safety. Novo Nordisk will take legal and regulatory action to protect patients, our intellectual property and the integrity of the US gold-standard drug approval framework,” the company said in a statement regarding the Hims & Hers announcement. “This is another example of Hims & Hers’ historic behaviour of duping the American public with knock-off GLP-1 products, and the FDA has previously warned them about their deceptive advertising of GLP-1 knock-offs.
The American Diabetes Association’s Obesity Association recently published new standards of care, which discourage the use of compounded GLP-1s due to safety, quality, and effectiveness concerns.
Only Novo Nordisk manufactures an FDA-approved Wegovy pill formulated with SNAC technology, which facilitates semaglutide absorption when administered orally. The Wegovy pill is available in all doses, in full supply, nationwide in the US. Compounded semaglutide is not approved by the FDA and may contain impurities, unnecessary additives, and untested doses.”
In November, when the company dropped its prices to fend off competition, Dave Moore, executive vice president of U.S. operations at Novo Nordisk, said, “As pioneers of the GLP-1 class, we are committed to ensuring that real, FDA-approved Wegovy and Ozempic are affordable and accessible to those who need them.”
Moore continued: “The U.S. healthcare system is complex, with different types of insurance and various ways for patients to obtain their medicines. Our new savings offers provide immediate impact, bringing forward greater cost savings for those who are currently without coverage or choose to self-pay.”