The “Wegovy” brand slimming syringe is sold in the Achat pharmacy in Mitte. The “Wegovy” slimming syringe has been available in Germany for a year.
Jens Kalaene | Picture Alliance | Getty Images
Novo Nordisk on Monday said it is ending its collaboration with Hims & Hers due to concerns about the telehealth company’s sales and promotion of cheaper knock-offs of the weight loss drug Wegovy.
Shares of Hims & Hers fell roughly 28% on Monday, while Novo Nordisk’s stock fell more than 6%.
Novo Nordisk in April said it would offer Wegovy through several telehealth companies such as Hims & Hers to expand access to the blockbuster injection now that it is no longer in short supply in the U.S.
The end 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 companies have said patients may still need personalized compounded versions of Wegovy in situations where it’s medically necessary.
But Novo Nordisk on Monday said Hims & Hers has “failed to 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 is putting patient safety at risk.
“We expected that the efforts towards compounding personalization would diminish over time. When we didn’t see that, we had to make a choice on behalf of patients,” Dave Moore, Novo Nordisk’s executive vice president of U.S. operations, told CNBC. “We’ve been firm all along that patient safety is our primary focus.”
“Our expectation was that [Hims & Hers’] business focus would transfer toward real, safe, approved medications,” he said. Moore said Novo Nordisk will not incur any fees from terminating the collaboration, as it was established through a third-party that manages the drugmaker’s direct-to-consumer online pharmacy
A Hims & Hers spokesperson did not immediately respond to CNBC’s request to comment.
During an earnings call in May, Hims & Hers CEO Andrew Dudum said the company gives providers and patients choice in their treatments.
“Ultimately what is right for them is their own discretion,” he said. “I think we strongly believe it’s really important that we maintain that independence.”
In a note on Monday, Citi analyst Daniel Grosslight said the end of the collaboration increases Hims & Hers’ legal risk “substantially.” He added that he was surprised the partnership, when initially announced, did not 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 can also be produced on a case-by-case basis when it’s medically necessary for a patient, such as when they can’t swallow a pill or are allergic to a specific ingredient in a branded drug.
But drugmakers and some health experts have pushed back against the practice, largely because the FDA does not approve compounded drugs.
Novo Nordisk said it will continue offering the branded version of Wegovy through telehealth organizations that “share our commitment to safe 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 company will “engage on the legal front” and with the FDA to ensure that illegal compounding diminishes.
In a release on Monday, Novo Nordisk said it conducted an investigation that found the active ingredients used in Wegovy knock-offs sold by telehealth companies 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 large share of those Chinese suppliers were never inspected by the FDA, and many that were inspected had drug quality assurance violations.
“These medicines that are coming into our country from sources around the world are not even approved in those countries that they originated, and it’s a problem,” Moore said.
