Eli Lilly and Company (LLY) has made a significant move in the obesity treatment market by expanding the availability of its drug Zepbound (tirzepatide). The company is now offering 2.5 mg and 5 mg single-dose vials at discounted prices. This announcement has stirred up the telehealth and wellness industry, with Hims & Hers Health Inc (HIMS) experiencing a 5.05% drop in its stock price on Tuesday, likely due to concerns about increased competition.
Lilly’s new pricing strategy for Zepbound is particularly aggressive, with the single-dose vials costing 50% or more less than other incretin (GLP-1) medicines for obesity. A four-week supply of the 2.5 mg dose is priced at $399, while the 5 mg dose costs $549. This move aims to make Zepbound more accessible to millions of adults struggling with obesity, especially those who need to pay out-of-pocket or lack insurance coverage. LillyDirect, a platform for direct purchase, bypasses traditional supply chains, offering patients greater transparency in pricing.
The introduction of Zepbound at such a competitive price point has raised concerns about the impact on Hims & Hers, a telehealth company that has gained traction by providing accessible health solutions online. The concern stems from the possibility that Zepbound’s affordability and proven efficacy might attract customers away from Hims & Hers, potentially affecting its market share and profitability.
Zepbound’s clinical trial results show an average weight loss of 15% over 72 weeks, making it a compelling option for patients seeking effective and affordable treatment. Hims & Hers might be forced to lower its prices to stay competitive, potentially squeezing profit margins. The company may also need to invest more in marketing efforts to retain its customer base, further impacting its financial performance. However, despite this recent dip, HIMS stock has seen a 58% increase year-to-date, reflecting the growing popularity of GLP-1 medicines.
For investors interested in acquiring shares of HIMS, traditional brokerage platforms offer a way to purchase shares or fractional shares. Alternatively, investors can gain exposure to HIMS through exchange-traded funds (ETFs) that hold the stock or by allocating their 401(k) to strategies that invest in mutual funds or instruments within the Health Care sector, where HIMS operates. According to data from Benzinga Pro, HIMS has a 52-week high of $25.74 and a 52-week low of $5.65.
