Telehealth Company Retreats on Weight-Loss Pill After FDA, Lawsuit Pressure

Online healthcare company Hims & Hers quickly abandoned plans to sell a $49 weight-loss pill after federal regulators called it an "illegal copycat" and Danish drugmaker Novo Nordisk filed a patent lawsuit. The failed launch has accelerated regulatory scrutiny of compounded weight-loss medications and left the company searching for new growth opportunities.

A telehealth company’s ambitious attempt to break into the lucrative weight-loss drug market has spectacularly collapsed, triggering increased federal oversight of medication compounding operations nationwide.

Hims & Hers Health, an online healthcare platform, quickly withdrew its announcement to sell a compounded weight-loss pill for $49 after facing immediate pushback from both federal regulators and a major pharmaceutical manufacturer.

The company had planned to offer an oral version of semaglutide, the active ingredient found in popular weight-loss medications, even as established drugmakers Novo Nordisk and Eli Lilly were already working to reduce prices on their branded products.

Within just two days of the announcement, Hims reversed course after FDA Commissioner Marty Makary publicly criticized the offering and similar medications as “illegal copycats.”

Danish pharmaceutical giant Novo Nordisk then escalated the situation by filing a patent infringement lawsuit against the telehealth company over its injectable weight-loss products.

The oral medication could have provided Hims access to patients who prefer pills over injections, according to industry analysts. However, the company’s future growth strategy now remains uncertain.

“They probably looked at this as their next big driver of growth in the business,” explained Needham analyst Ryan McDonald. He noted that Hims’ other recent service additions, including testosterone treatments and cancer screenings, were “nice add-ons” but wouldn’t generate substantial new customer subscriptions independently.

Hims representatives declined to provide comment on the situation.

The company, led by entrepreneur Andrew Dudum, has marketed itself as an affordable healthcare alternative, including through an expensive Super Bowl advertisement campaign.

Hims has also worked to increase its political influence, contributing $1 million to President Donald Trump’s inauguration – matching donations from much larger pharmaceutical companies like Pfizer and Gilead.

The telehealth platform’s recent expansion has been largely driven by injectable weight-loss treatments. Company sales were under $900 million in 2023, before introducing the injection services, but Wall Street projects revenues will surpass $2.3 billion when 2025 results are announced Monday. Analysts anticipate fourth-quarter sales of $620 million, representing a 28% increase.

While Hims has maintained sales growth rates between 59% and 94% over the past four years, forecasts suggest growth will slow to approximately 17% over the next two years.

Company stock prices have dropped to less than 25% of their mid-2023 peaks and have fallen more than 45% since the weight-loss pill announcement.

Industry experts project the obesity medication market will reach roughly $100 billion in annual sales by 2030. Novo Nordisk executives believe oral medications could account for one-third or more of that market, with Eli Lilly potentially launching its oral treatment as early as April.

Compounding pharmacies gained temporary permission to market their own versions of GLP-1 medications during widespread shortages in recent years. After branded medication supplies stabilized last year, companies like Hims continued selling what they termed personalized compounded versions, adjusting dosages or ingredients to address side effects and allergies.

However, analysts suggest Hims may have overstepped regulatory boundaries with its pill proposal.

GLP-1 compounds are fragile peptides requiring specialized technology to remain effective when taken orally. Hims couldn’t utilize Novo’s patented absorption technology for oral semaglutide, the primary component in Wegovy and Ozempic. Instead, the company planned to employ complex liposomal technology to enhance absorption.

Manufacturing experts indicated this technology would likely prove difficult to produce in personalized doses and could raise safety concerns with regulators, particularly since the manufacturing process lacked prior FDA approval.

“It’s a tricky technology,” said Prashant Yadav, a professor of technology and operations management at INSEAD business school. Yadav likened liposomal particles to bubbles, explaining that incorrect application could render the medications ineffective.

“Each of those bubbles has to be precisely the right size,” Yadav detailed. “If some are too big or are too small, then it has the problem that it won’t carry the payload, or it may carry the payload, and when it’s time to release, it may not release it in the right quantity.”

BMO Capital Markets pharmaceutical analyst Evan Seigerman, who follows Lilly, predicts compounded GLP-1 sales will continue declining as branded medication prices decrease, insurance coverage expands, and regulatory oversight intensifies.

“That’s the problem with a platform that’s kind of based on selling of a gray-market product,” Seigerman observed. “Lilly and Novo are always going to be able to make their product more efficiently. They have the scale, so they’re going to win.”