FDA “Think Twice” Removes LLY.US (LLY.US) Weight Loss Drug From Shortage List, Hims & Hers Health (HIMS.US) Responds By 10%

The Zhitong Finance App learned that after the US Food and Drug Administration (FDA) decided to remove Lilly's (LLY.US)'s Tirzepatide (Tirzepatide) from the drug shortage list, a lawsuit against this delisting measure triggered a rise in Hims & Hers Health (HIMS.US) trading on Monday, closing 9.68% higher. As a result of this lawsuit, the FDA is now reconsidering delisting. Tesipatide is sold under the names Mounjaro and Zepbound and is used to treat type 2 diabetes and weight loss, respectively.

On October 7, the Outsourcing Facilities Association (Outsourcing Facilities Association), an industry organization representing compound pharmacies, filed a lawsuit in a federal court in Texas, alleging that the FDA made a “reckless and arbitrary decision” to deprive consumers of their right to obtain tesipeptides. The organization claims that tesipatide is still undersupplied and is asking the FDA to reverse its decision.

According to reports, if a branded drug is found to be in short supply by the FDA, the rules allow mixed pharmacies to produce the drug, which is still protected by a patent. Previously, Eli Lilly had addressed the shortage of tesipatide and notified the FDA. The regulator has now determined that the supply issue of this type of drug has been resolved, so the drug has been removed from the list.

This means that, according to FDA guidelines, compounding pharmacies will no longer be allowed to produce and sell imitations of these drugs. Patients who cannot afford the high cost of the original drugs may lose access to these weight loss drugs.

On October 11, the FDA said it will not take regulatory action against compound pharmacies and facilities that produce their own version of tesipatide until their review is complete.

The decision is good news for telemedicine companies like Hims & Hers Health, as they can continue to offer combined versions of weight loss medications. As a result, Hims & Hers Health's shares rose about 10% in Monday's trading.