The US regulators said that Eli Lilly's weight-loss miracle drug is no longer in short supply, with "generic substitution" manufacturer Hims & Hers plummeting more than 10% intraday

The U.S. regulatory authorities dealt a heavy blow to Hims & Hers Health Inc., a company producing generic drugs for Eli Lilly's weight-loss miracle drug Zepbound.

On Thursday, October 3rd, Eastern Time, the U.S. Food and Drug Administration (FDA) announced that due to increased demand, there has been a consistent shortage of the GLP-1 injectable drug containing tirzepatide, a component of Eli Lilly, since 2022. The FDA has now confirmed that the shortage issue of this type of drug has been resolved. FDA has informed Eli Lilly that its product supply and production capacity can meet the current and future anticipated demand nationwide in the United States. As the product flows from manufacturers and distributors to local pharmacies, patients and prescription drug orderers may still encounter intermittent local supply interruptions.

Following this announcement, the FDA removed two drugs from Eli Lilly that have been on the shortage list for nearly two years - Zepbound, a GLP-1 weight-loss drug with tirzepatide as the main ingredient, and Mounjaro, the first FDA-approved GIP/GLP-1 receptor agonist for lowering blood sugar.

After the FDA announcement, Eli Lilly's stock price fell on Thursday, dropping over 1.1% when hitting a daily low, while the stock price of Hims & Hers Health Inc., a discount healthcare company, fell much more than Eli Lilly, dropping 15.3% when hitting a daily low. In the end, Eli Lilly closed down by about 0.6%, Hims & Hers closed down by 9.6%, and the New York-listed American stocks of Novo Nordisk, a Danish company and a rival of Eli Lilly in weight-loss drugs, fell by 1.2%.

Eli Lilly's Executive Vice President Patrik Jonsson later issued a statement saying that Eli Lilly has "invested heavily" in expanding the production of GLP-1 drugs to bring new choices to the market. Media reports quoted Jonsson as saying that the reversal of the shortage situation reflects Eli Lilly's commitment to providing a continuous supply of genuine and safe drugs.

Scott Brunner, CEO of the Alliance for Pharmacy Compounding, an industry organization aimed at speaking out for compounding pharmacists, technicians, patients, and suppliers, commented that the FDA's termination of the shortage designation for Eli Lilly's GLP-1 related drugs may cause trouble for consumers taking non-branded compounded tirzepatide drugs. "They are completely cut off, their prescriptions are no longer compoundable," and pharmacies will "have to immediately stop compounding and distributing generic versions of Mounjaro and Zepbound."

Eli Lilly and Novo Nordisk have been fiercely competing in the generic GLP-1 drug market. Media reports pointed out that Eli Lilly's representatives warned prescription drug providers in August this year to stop selling generic drugs.

Media reports estimate that there are tens of thousands of Americans using generic versions of Eli Lilly and Novo Nordisk weight loss drugs. Investment bankers collaborating with the industry revealed that manufacturers of such combination drugs can generate annual revenues as high as $1 billion.

Huawei Street View mentioned that in May this year, Hims & Hers launched its weight loss injection for the first time, priced at only $199 per month, challenging the expensive weight loss drugs on the market that cost as much as $1350 per month. The injection is 85% cheaper per dose compared to Novo Nordisk's semaglutide (Wegovy) and Eli Lilly's tirzepatide. Hims & Hers CEO Dudum stated at the time that the company expects revenue from weight loss products to exceed $100 million by the end of 2025.

Even major pharmaceutical companies are caught up in the competition. At the end of August, in order to address supply shortages, Eli Lilly started selling small bottles of Zepbound at a 50% discount, priced at $399 per month, half the price of the injections, while the higher dosage version is priced at $549