Novo Nordisk Terminates Wegovy Marketing Deal with Hims & Hers Health

Novo Nordisk, the Danish pharmaceutical giant, has abruptly ended its marketing partnership with telehealth company Hims & Hers Health for the blockbuster obesity drug Wegovy. The termination comes just eight weeks after the deal's inception, citing concerns over the continued sale of compounded versions of the drug.

Controversy Over Compounded Drugs

Novo Nordisk alleges that Hims & Hers Health "has failed to adhere to the law which prohibits mass sales of compounded drugs." The company claims this action is necessary to protect patients from "knock-off drugs made with foreign illicit active pharmaceutical ingredients" that Hims justified under the "false guise of 'personalization.'"

The sale of compounded versions of Wegovy was initially permitted under U.S. law while the drug was in shortage. However, the U.S. government declared the shortage over in February, prompting Novo Nordisk to partner with telehealth companies to transition customers to branded Wegovy.

Hims & Hers Health CEO Andrew Dudum responded to the termination, stating that Novo Nordisk was "misleading the public." He further explained that the deal ended because Hims was defending the "ability of providers and patients to control individual treatment decisions."

Industry Implications and Market Response

The abrupt termination of the partnership highlights the ongoing challenges in the rapidly growing obesity drug market. Both Novo Nordisk and its rival Eli Lilly have faced difficulties meeting the overwhelming demand for their respective obesity drugs, leading to significant investments in manufacturing expansion.

The news has had a substantial impact on Hims & Hers Health's stock, with shares falling nearly 30% in morning trading following the announcement. This development underscores the volatility and high stakes in the competitive obesity drug market.

Broader Context of Obesity Drug Distribution

The controversy surrounding compounded versions of obesity drugs extends beyond this particular partnership. Eli Lilly's finance chief, Lucas Montacre, recently noted that some compounders had continued to combine the active ingredients of FDA-approved obesity drugs with other molecules or vitamins, marketing them as personalized treatments.

Both Novo Nordisk and Eli Lilly have been actively pursuing partnerships with telehealth companies and online pharmacies to provide more accessible distribution channels for their obesity drugs. These collaborations aim to accommodate cash-pay patients and offer alternative pricing options, recognizing the growing importance of this segment in the obesity drug market.

As the industry continues to grapple with supply challenges and regulatory complexities, the termination of the Novo Nordisk-Hims partnership serves as a reminder of the delicate balance between innovation, patient access, and regulatory compliance in the pharmaceutical sector.