Novo and Lilly rise, Hims falls on FDA “illegal copycat drugs” warning

Investors are reacting premarket to US Food and Drug Administration Commissioner Marty Makary signaling a crackdown on unapproved drugs that are marketed as being similar to FDA-approved products.

In an X post on Thursday, Makary said the FDA would “take swift action against companies mass-marketing illegal copycat drugs, claiming they are similar to FDA-approved products,” adding that the agency “cannot verify the quality, safety, or effectiveness” of such products.

While Makary’s post didn’t single out specific companies, it came shortly after telehealth firm Hims & Hers rolled out a much cheaper compounded version of Novo Nordisk’s newly launched Wegovy pill, starting at $49 a month. Hims’ product is not FDA-approved and has not undergone clinical trials to prove safety and efficacy, and Novo yesterday threatened legal and regulatory action.

The launch had initially sparked a sell-off in shares of Novo Nordisk and Eli Lilly, the latter of which is expected to debut its own oral weight-loss pill in April and has pledged lower pricing.

Following Makary’s comments, Hims shares have fallen about 6% as of 6 a.m. ET, while Novo and Lilly partially erased earlier losses, rising 7.5% and 3.8%, respectively.