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By Megan Cerullo
Edited By Aimee Picchi
/ CBS News
Direct-to-consumer pharmaceutical startup Hims & Hers Health said it is selling injectable GLP-1 weight loss drugs for a fraction of the cost of brand-name competitors such as Wegovy and Ozempic. Following the announcement, shares of the telehealth company soared more than 30% Monday.
Hims & Hers will provide patients with compounded GLP-1 drugs that start at $199 a month, or about 85% less than brand-name versions like Ozempic and Wegovy. The injectables use the same active ingredients as the branded versions, which currently are in short supply in some doses.
Shares of Hims & Hers soared $4.21, or 29%, to $18.79 in Monday afternoon trading.
GLP-1 drugs, which stands for glucagon-like peptide 1 agonists, help people feel fuller and less hungry, aiding their efforts to lose weight. But the brand-name versions made by a handful of pharmaceutical companies can be pricey, with Novo Nordisk’s Wegovy costing about $1,350 a month, or more than $16,00 a year, without insurance, according to GoodRx.
Hims & Hers Health’s may also beat out competitors on another key metric: availability. The startup said its GLP-1 injectable drug, which is made in partnership with a manufacturer of compounded injectable medications, will have “consistent” availability.
The company added that it will also sell brand-name versions of GLP-1 drugs, once supply rebounds.
“We’ve leveraged our size and scale to secure access to one of the highest-quality supplies of compounded GLP-1 injections available today,” Hims & Hers Health CEO and co-founder Andrew Dudum said in a statement Monday. “We’re passing that access and value along to our customers, who deserve the highest standard of clinical safety and efficacy to meet their goals, and we’re doing it in a safe, affordable way that others can’t deliver.”
Customers will need a prescription from their medical provider, based on what is “medically appropriate and necessary for each patient,” the company said.
The company is tapping an opportunity to profit by focusing on Americans’ desire to slim down. It already has an existing weight-loss program that is on track to bring in more than $100 million in revenue by 2025, with the program selling oral weight-loss medications for about $79 per month.
Compounded drugs are made by pharmacists to tailor a medication to a patient or if some drugs are in short supply. To be sure, the Food and Drug Administration warns that patients should not use compounded drugs when approved drugs are available to patients.
The agency does not review compounded GLP-1 medications for safety, and said it has received “adverse event reports” from patients who have used compounded semaglutide medications.
Some consumers have turned to compounded versions of the medications as demand for brand name drugs like Wegovy, Ozempic and Eli Lilly’s Mounjaro, dubbed “miracle drugs” by users who have slimmed down, soars and strains supply.
Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.
First published on May 20, 2024 / 2:00 PM EDT
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