Hims & Hers Health saw its shares decline by more than 6% on Tuesday morning in response to Eli Lilly (NYSE:LLY)'s latest announcement.
Lilly said it has introduced single-dose vials of its obesity medication, Zepbound, priced at a 50% discount compared to other incretin medicines. This move comes amid growing competition in the obesity treatment market.
Lilly's new offering includes 2.5 mg and 5 mg single-dose vials priced at $399 and $549 for a four-week supply, respectively. This pricing significantly undercuts the list prices of competing medicines.
The vials will be available through Lilly's direct-to-patient service, LillyDirect, and are designed to provide a more affordable option for those paying out-of-pocket, without the need for insurance coverage.
According to Citi analysts, Lilly's initiative represents a "shot across the bow" for companies involved in the GLP-1 compounders space, including Hims & Hers Health.
The analysts noted that Lilly's move aims to address concerns about "counterfeit, fake, unsafe or untested knock-offs" and is a direct challenge to compounded alternatives in the market.
Hims & Hers currently sells compounded semaglutide, a product that might now face heightened competition from this branded option.
The single-dose vials of Zepbound are expected to drive higher consumer confidence due to their brand assurance, which could impact companies like Hims & Hers.
The implications of Lilly's new pricing strategy could intensify market pressures on similar players such as HIMS.