By Josh Nathan-Kazis
A plan by Hims & Hers Health to sell legal copies of Novo Nordisk's weight loss drug Wegovy is drawing pushback from the industry, and bringing new attention to an area of concern for public-health officials.
Enormous demand has created shortages of Novo's Wegovy, as well as a competing weight loss injection from Eli Lilly called Zepbound. Both companies are spending billions of dollars to increase their manufacturing capacity, but the availability of the medicines is limited in the U.S., according to the Food and Drug Administration.
Hims & Hers, known for generic prescription medicines for ailments like erectile dysfunction and hair loss, saw its shares soar 28% on Monday after the company said it would offer an alternative for patients who can't get Wegovy or Zepbound.
In its announcement, Hims & Hers said it would offer compounded GLP-1 shots, the class of medicines powering the new obesity drugs. The company told Barron's that it plans to sell semaglutide, the ingredient in Novo's Wegovy, manufactured by a compounding pharmacy named BPI Labs.
FDA rules allow certain compounding pharmacies to manufacture copies of a branded drug when the treatment is unavailable due to shortages. The clause gets around exclusivity rules that otherwise protect branded medicines for a certain period after their approval.
Branded drugmakers say compounded drugs are potentially dangerous, and the FDA seems increasingly uneasy about the arrangement.
Compounding pharmacies traditionally make customized versions medicines for individuals who can't take an FDA approved drug because of allergies, say, to a particular ingredient in the drug's formulation.
"Compounding is kind of a tricky area for the FDA, because it's a very, very old practice," says Nathan Cortez, a professor at SMU Dedman School of Law. "These customized medicines aren't rigorously studied, and so the FDA is kind of skeptical, but it allows compounding drugs."
The opportunity to copy semaglutide has proven enticing to certain compounders in recent months, given the massive demand for weight loss drugs.
The FDA says that it has received reports of patients who experienced complications after using compounded semaglutide, warning that some compounders are using a form of the drug called semaglutide salts that is different from the ingredient in Wegovy.
"Patients and healthcare professionals should understand that the agency does not review compounded versions of these drugs for safety, effectiveness, or quality," the FDA says on a page of its website dedicated to compounded semaglutide.
In a statement to Barron's, Hims & Hers chief medical officer, Dr. Pat Carrol, said that the company agrees with the FDA that patients should ensure they are using a reliable supplier for medications. "At Hims & Hers, we've built our offerings to ensure customers have access to safe, high-quality, reliable care," Carroll said.
Hims & Hers said it would offer the compounded drug at $199 per month. Wegovy's list price is $1,350 per month, though most patients pay less. Hims & Hers does not take insurance.
If Wegovy were to drop off the FDA's shortage list, Hims & Hers would have to stop selling the compounded semaglutide. It isn't clear when that might happen.
Shares of Hims & Hers have given back some of their gains since Monday's rally. The stock dropped 5.6% on Tuesday and was down 3.9% on Wednesday to $16.88. Shares climbed as high as $20.11 on Monday.
Wall Street will need to determine whether the decision by Hims & Hers to dive into the compounded semaglutide market is worth the roughly $500 million in market value the company added between the close of business Friday and midday on Wednesday.
While most compounding pharmacies only make drugs meant for a specific patients, roughly 80 compounders across the country are registered with the FDA under a federal program called 503B, which allows them to manufacture and sell large quantities of drugs. Those compounders, known as outsourcers, are required to abide by certain quality standards and are subject to FDA inspection.
Hims & Hers' Carroll said that its compounded semaglutide manufacturer, BPI Labs, is registered as a 503B outsourcer.
BPI Labs didn't respond to a request for comment. According to an FDA database, BPI Labs is based in Largo, Florida, and has been registered as a 503B outsourcer since 2019.
Carroll said that BPI Labs uses the semaglutide base that is the active ingredient in Wegovy, not the salt forms of the drug. He said that Hims & Hers also hoped to sell compounded tirzepatide, the active ingredient in Lilly's Zepbound, "at some point in the future."
"Safety and quality are our highest priority when it comes to compounding, and we conducted extensive research for over a year into finding a quality supplier who met our rigorous safety standards," Carroll said.
Lilly, in a statement to Barron's, said that compounded GLP-1 drugs remain untested. "Neither the FDA nor any global regulatory agency has reviewed these products for safety, quality, or efficacy, and unsafe products should not be on the market."
Lilly has sued some compounding pharmacies, among other entities, over their sale of compounded tirzepatide, the ingredient in Zepbound, though judges have since dismissed at least one of those cases. In March, Lilly said it planned to "continue to pursue legal remedies."
Novo, in a separate statement, said that it had filed a dozen lawsuits against compounding pharmacies and other entities "engaging in unlawful marketing and sales of compounded drugs claiming to contain semaglutide."
Novo noted that as of late March, the FDA's public database of adverse events reported by patients after taking medicines includes 99 incidents where patients reported being hospitalized after taking compounded semaglutide.
So far, U.S. regulators have tolerated the compounders, but other countries are taking different approaches. In Australia, regulators this week said they would ban compounding pharmacies in that country from making and selling compounded GLP-1 drugs due to safety concerns.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 22, 2024 14:18 ET (18:18 GMT)
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