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Eli Lilly and Co (NYSE:LLY) today announced an expansion in the availability of its obesity treatment, Zepbound (tirzepatide), which is now offered in 2.5 mg and 5 mg single-dose vials at a discounted price.
The announcement has sent shockwaves through the telehealth and wellness industry, with Hims & Hers Health Inc (NYSE:HIMS) seeing a 5.05% drop to $15.24 during Tuesday’s session amid possible competition concerns.
Zepbound Enters the Market with Competitive Pricing: Lilly’s new Zepbound single-dose vials are priced at a 50% or greater discount compared to other incretin (GLP-1) medicines for obesity, with a four-week supply of the 2.5 mg dose costing $399, and the 5 mg dose priced at $549.
This pricing strategy is aimed at increasing accessibility for millions of adults with obesity, particularly those who need to self-pay outside of insurance or who do not qualify for savings programs.
The new self-pay option allows patients to purchase Zepbound directly through LillyDirect, bypassing traditional supply chains and enabling greater transparency in pricing.
Impact on Hims & Hers: Following Lilly’s announcement, shares of Hims & Hers dropped, reflecting investor concerns over the increased competition in the weight loss market.
Hims & Hers has enjoyed significant growth by offering accessible health solutions online, particularly to individuals seeking alternatives outside of traditional healthcare channels. However, the introduction of Zepbound at such a competitive price point could draw customers away from Hims & Hers, challenging its market position.
Investor Concerns Over Market Share and Profit Margins: The most significant concern for Hims & Hers is the potential loss of market share.
With Zepbound’s proven efficacy—patients in clinical studies achieved an average of 15% weight loss over 72 weeks—consumers may now view Lilly’s product as a superior option, both in terms of effectiveness and affordability.
Moreover, the aggressive pricing of Zepbound may pressure Hims & Hers to lower its own prices to remain competitive, which could lead to tighter profit margins. The telehealth company may also need to increase marketing efforts to retain its customer base, further impacting profitability.
HIMS stock is otherwise up some 58% on a year-to-date basis amid popularity in GLP-1 medicines.
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Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.
For example, in Hims & Hers Health’s case, it is in the Health Care sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.
According to data from Benzinga Pro, HIMS has a 52-week high of $25.74 and a 52-week low of $5.65.
