Regulatory heat on compounded GLP-1s puts Hims’ growth and investor hopes under pressure
US regulators are drawing a line on copycat weight-loss drugs — and Hims & Hers is right on it.
US authorities are reviewing potential legal action against Hims & Hers Health after the online telehealth provider briefly moved to sell a cheap compounded version of Novo Nordisk’s Wegovy pill before backing off under pressure, according to Reuters.
The company had planned to offer a compounded Wegovy-style pill for US$49 a month, far below the branded drug’s price, before the US Food and Drug Administration (FDA) signalled it would act.
The FDA has referred Hims to the US Department of Justice (DoJ) for possible violations of the Food, Drug and Cosmetic Act tied to marketing an unapproved drug.
Three attorneys told Reuters the DoJ could still seek a court injunction or civil or criminal fines, although Hims’ rapid retreat may limit the scope of any case.
One attorney said that if Hims has already stepped back and says it will not proceed, “it’s not clear there’s a case or controversy here.”
The legal question centres on compounding.
Compounded drugs are only allowed under narrow US rules, typically during shortages or when a patient needs a customised formulation, and regulators can act when compounders effectively bypass the federal approval process by recreating drugs already on the market.
Hims has argued its products are legal because they are tailored to patients’ medical needs.
Two attorneys with FDA expertise told Reuters it remains unclear whether Hims’ products meet the “personalised” standard under federal law, in part because little is public about its manufacturing and prescribing practices.
Regulators may also look at Hims’ compounded injectable GLP‑1 weight-loss products, which use semaglutide, the same active ingredient as Wegovy.
Any case involving injectables would likely be more complex because varied dosages and inactive ingredients give compounders more room to argue they fit within the law, said James Shehan of Lowenstein Sandler, a former general counsel for Novo Nordisk.
This is happening against what Reuters described as “skyrocketing” demand for GLP‑1 drugs from Novo Nordisk and Eli Lilly, with drugmakers arguing some compounders are illegally selling unapproved copies.
Mike Stuart, general counsel at the US Department of Health and Human Services, told CNBC that part of the motivation is to protect the investment pharmaceutical companies make in traditional FDA approval and to ensure safety, saying compounders “haven’t spent that inordinate amount of money making sure that they’re safe and effective,” according to Reuters.
The regulatory pressure comes on top of mounting commercial risk.
The Financial Times reported that Novo Nordisk has sued Hims for patent infringement after cutting its own prices, and that Hims was forced to withdraw a pill version of its GLP‑1 this week.
Citigroup estimates that roughly a quarter of Hims’ 2027 ebitda could be at risk if it cannot sell weight-loss drugs, and the shares have fallen about 30 percent in a week.
As per the Financial Times, Hims is now pivoting towards “longevity”, including testing, microdosing, hormones and potentially compounding peptides with supposed wellness benefits.
Many peptides operate in a legal grey area because they are not approved as mainstream drugs, and the Financial Times noted that larger drugmakers, with far bigger lobbying budgets, are likely to push into the same space.
