Hims obesity drug business may get boost as employers drop coverage

Key Facts

1Telehealth provider Hims and Hers Health may get a boost next year from employers dropping coverage of weight-loss drugs like Novo Nordisk's Wegovy and Eli Lilly's Zepbound to rein in costs, investors and analysts say.

As employers grapple with soaring healthcare costs, telehealth provider Hims & Hers Health is poised to benefit from a potential shift away from expensive branded weight-loss drugs. The company may get a boost next year from employers dropping coverage of Novo Nordisk's Wegovy and Eli Lilly's Zepbound to rein in costs, analysts and investors say.

The trend reflects a broader cost-cutting push in the U.S. healthcare system, with employers increasingly seeking cheaper alternatives to manage employee wellness. Hims, which offers compounded versions of weight-loss medications at lower prices, could see increased demand as branded coverage declines. Analysts highlight that the company's direct-to-consumer model and competitive pricing make it an attractive option for cost-conscious employers.

Looking ahead, investors will watch for Hims' upcoming quarterly results and any announcements of new employer partnerships. The company's ability to scale production and maintain pricing will be key. Additionally, any regulatory changes affecting compounded drugs could influence the stock's trajectory.