Hims & Hers Health (HIMS.US) launches cheap weight loss pills, FDA stops sales the next day, stock price plummets after hours.

The Food and Drug Administration (FDA) of the United States announced that it will crack down on generic weight loss drugs sold by companies like Hims & Hers Health (HIMS.US). Just the day before, this telemedicine company began offering a heavily discounted generic drug. Hims stated on Thursday that it will sell a low-cost version of Novo Nordisk A/S Sponsored ADR Class B's new Wegovy weight loss drug. Novo Nordisk A/S Sponsored ADR Class B immediately called this action illegal and promised to take "legal and regulatory action to protect patients." By Friday, FDA Commissioner Matt Maclary promised to take action against companies selling generic weight loss drugs. Maclary stated in a declaration, "These actions are intended to protect consumers from drugs that FDA cannot verify for quality, safety, or effectiveness." Pharmaceutical companies including Eli Lilly (LLY.US) and Novo Nordisk A/S Sponsored ADR Class B have long complained that the FDA is not doing enough to prevent the proliferation of combination weight loss drugs. Novo Nordisk A/S Sponsored ADR Class B is pinning its hopes on the Wegovy drug, and has been competing fiercely with Eli Lilly to become the top contender in the weight loss drug market. Novo Nordisk A/S Sponsored ADR Class B's ADR rose by 5.1% in after-hours trading in New York. Hims' stock price dropped by about 13% in after-hours trading. During a period of widespread shortages, Hims and other telemedicine companies took advantage of the opportunity to sell lower-cost generic versions of Eli Lilly and Novo Nordisk A/S Sponsored ADR Class B weight loss injections. These shortages have now ended, so companies providing generic versions should have ceased this practice. Telemedicine companies have been able to circumvent rules by adjusting dosages or adding ingredients to make their products appear different from the brand-name versions. In a more concrete action, Mike Stewart, General Counsel for the U.S. Department of Health and Human Services (HHS), posted on X on Friday that the agency has referred Hims to the Department of Justice for investigation under the criminal and criminal prosecution provisions of the Federal Food, Drug, and Cosmetic Act. A spokesperson for Novo Nordisk A/S Sponsored ADR Class B, Liz Skerlbkova, stated, "We welcome the actions taken today by HHS and FDA to protect patients from unapproved generic drugs, which are made from foreign and misleading active drug ingredients, potentially posing significant risks to patient safety." A representative from Hims stated that the company has always operated in accordance with applicable laws and looks forward to continuing to engage with the FDA to ensure that people can safely access affordable medical services. Eli Lilly expressed appreciation for this measure in a statement, stating that the company looks forward to actions taken by the FDA, other regulatory agencies, and law enforcement agencies. There has been a rocky history between Novo Nordisk A/S Sponsored ADR Class B and Hims. Last year, the two companies collaborated to offer a discounted version of Novo Nordisk A/S Sponsored ADR Class B's injectable weight loss drug, but ended the partnership two months later. Novo Nordisk A/S Sponsored ADR Class B accused Hims of using "misleading marketing" to sell generic Wegovy injections. The Trump administration has promised to restrict drug advertising by requiring companies to disclose more side effects in ads and enforce existing rules on misleading information. In addition to issuing warning letters in the fall, the FDA stated in a declaration that it will take further actions to crack down on direct-to-consumer advertising. Hims was one of the companies that received a warning letter.