By Patrick Wingrove and Sriparna Roy
(Reuters) -Eli Lilly said on Tuesday it cut the price for vials of its weight-loss drug Zepbound by $50 or more and expanded the range of doses sold online to try to stave off competition from compounding pharmacies and rival Novo Nordisk.
The move comes as the competitive dynamic in the highly lucrative weight-loss drug market is about to shift.
Compounding pharmacies that have been selling hundreds of thousands of doses of copies of Lilly’s Zepbound and Novo’s Wegovy while the medicines were in shortage are running out of time to produce them.
After having removed Zepbound from its shortage list in December, the U.S. Food and Drug Administration on Friday removed Wegovy as well and told compounders to cease selling copies in the coming months.
Drug compounders, led by industry trade group Outsourcing Facilities Association, sued the FDA on Monday over its decision to remove Wegovy and diabetes drug Ozempic, which have the same active ingredient, from its shortage list. It previously sued over the agency’s declaration that Lilly’s tirzepatide drugs, which include Zepbound, were no longer in short supply.
The FDA said this month that some compounding pharmacies had until the court makes its decision in the earlier case to stop selling compounded tirzepatide.
Telehealth firm Hims & Hers Health late on Monday warned it may not be able to sell compounded weight-loss drugs to the same extent, or at all, sending its shares down nearly 26%.
“The reality in the market is (Wegovy) remains in short supply, as we see in continuing shortage reports from our members for the low doses,” said Geoff Cook, CEO of Noom, another telehealth company that sells compounded versions of Novo’s drug.
Shares of telehealth firms LifeMD fell 11.4%, while Teladoc was down nearly 2%.
“Lilly has struck whilst the iron is hot and this offering is sure to act as a sweetener for those that are having their compounded supply come to an end,” Bernstein analyst Courtney Breen said of the expansion of Zepbound in vials at lower prices.
Shares of the Indianapolis-based drugmaker rose 2.3% to $902.42.
LILLY LAUNCH
The launch of Lilly’s vials expands options for patients who choose to pay cash through the drugmaker’s direct-to-consumer website, and the cheaper price point could sway more customers away from compounded copies of the drug, according to analysts.
Eli Lilly began offering vials of the two lowest doses of Zepbound, which is typically sold in auto-injector pens, in August last year. On Tuesday, it said it had cut the prices for a month’s supply of those doses by around $50 each. They now cost $349 and $499 a month through LillyDirect.
Lilly said patients could purchase higher-dose 7.5 milligram and 10mg vials of Zepbound for $499 a month on the LillyDirect website. That is nearly 23% less than the $650 Lilly charges for auto-injectors of the drug to patients who are insured but not covered for the medicine.
Patrik Jonsson, Eli Lilly’s president of cardiometabolic health, said in an interview that more than 10% of patients starting on Zepbound have been initiated on vials since their launch.
Lilly’s new offer of $499 per month is still higher than the $231 to $330 compounding pharmacies charge on average for their versions of Zepbound and Wegovy in the U.S.
Hims & Hers forecast sales of $725 million from its weight-loss business in 2025, and said it expected to keep offering “personalized” compounded drugs and generic versions of an older Novo Nordisk medicine.
Citi analyst Daniel Grosslight said he is less optimistic about the Hims expectation, noting that the forecast assumes a rapid acceleration in sales of the company’s other weight loss options.
(Reporting by Patrick Wingrove in New York and Sriparna Roy in Bengaluru; Editing by Caroline Humer and Bill Berkrot)
