Him & Hers tumbles as Lilly slashes prices on lowest doses of weight loss drug

Eli Lilly (LLY) said it is lowering the prices of the two lowest doses of Zepbound as it tries to ease supply constraints. Under the new pricing plan, self-pay patients would be able to purchase the blockbuster weight loss drug for as little as $399 per month. The new versions of Zepbound will come in vials instead of auto-injector pens and will be available on the company’s own telehealth platform. The news sent Him & Hers (HIMS) into negative territory.

SINGLE-DOSE VIALS: Eli Lilly announced Zepbound 2.5 mg and 5 mg single-dose vials are available for self-pay for patients with an on-label prescription, significantly expanding the supply of Zepbound in response to high demand. “The single-dose vials are priced at a 50% or greater discount compared to the list price of all other incretin, or GLP-1, medicines for obesity. This new option helps millions of adults with obesity access the medicine they need, including those not eligible for the Zepbound savings card program, those without employer coverage, and those who need to self-pay outside of insurance,” the company stated.

“We are excited to share that the Zepbound single-dose vials are now here, further delivering on our promise to increase supply of Zepbound in the U.S. These new vials not only help us meet the high demand for our obesity medicine, but also broaden access for patients seeking a safe and effective treatment option. In a clinical study, the 5 mg maintenance dose helped patients achieve an average of 15% weight loss after 72 weeks of treatment and has been a powerful tool for millions of people with obesity looking to lose weight and keep it off,” said Patrik Jonsson, executive vice president, and president of Lilly Cardiometabolic Health and Lilly USA.

VIAL VOLUMES COULD OFFSET PRICE PRESSURE: In a research note following the news, Morgan Stanley said it estimated that the Zepbound U.S. net price in Q2 was $790 per month, with this trending down over time to about $600 per month in 2028. While distributing the vials via this channel could pressure Zepbound average price assumptions near term, the incremental volume from vials could prove to be a positive offset, says the firm, which has an Overweight rating and $1,106 price target on Eli Lilly shares.

SHOT ACROSS THE BOW: Citi views Eli Lilly’s announcement that it is making Zepbound single dose vials available for self-pay patients with an on-label prescription as a “shot across the bow for the GLP-1 compounders.” Lilly is introducing the vials, in part, to protect patients from “counterfeit, fake, unsafe or untested knock-offs,” which Citi says is a “not-so-subtle dig at the compounders.”

While the firm does not think this will have an immediate impact on Hims & Hers’ GLP-1 offering, it does think Lilly has a “compelling offering for patients who want the certainty of a branded drug and do not want to commit to multi-month orders for a lower price.” Citi also notes the Lilly pricing does not include the price of the doctor’s visit to obtain a prescription while Hims & Hers’ pricing does. The firm anticipates Lilly’s offering will take share away from the compounders given patients will likely opt for the branded over compounded tirzepatide as pricing is a bit more flexible and certainty of supply. Citi keeps a Neutral rating on the stock with a $20 price target.

PRICE ACTION: In morning trading, shares of Eli Lilly have gained almost 2% to $966.19, while Hims & Hers have dropped about 6% to $15.15.