Cigna’s $200 Weight-Loss Drug Cap Shakes Up Hims & Hers Stock

• Hims & Hers Health Inc. (HIMS) declined 4.45% to $55.50, with an intraday low of $51.20, as Cigna’s (CI) Evernorth division introduced a $200 monthly cost cap for weight-loss drugs Wegovy and Zepbound.
• Evernorth’s pharmacy benefit plan enhances access to Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, with co-pays counting toward deductibles, against list prices reaching $1,000.
• The FDA’s policy permitting compounded versions of these drugs, offered by Hims & Hers and others, expires today, May 22, 2025, potentially reshaping market dynamics for weight-loss treatments.

Hims & Hers Health Inc. (HIMS) fell nearly 5% in midday trading Thursday, reaching $55.50, with an intraday low of $51.20. The decline comes as market dynamics shift following an innovative pharmacy benefit initiative launched by Cigna’s (CI) health services division, Evernorth. Announced on Wednesday, Evernorth’s first-of-its-kind offering caps patient out-of-pocket costs at $200 per month for weight-loss medications Wegovy and Zepbound, making these high-demand drugs more accessible through direct negotiations with their manufacturers, Novo Nordisk and Eli Lilly (LLY). This strategic move by Cigna, which allows the $200 co-pay to count toward patients’ deductibles, contrasts with the cash-pay market where Wegovy and Zepbound list prices can reach $1,000, though often available for approximately half that amount through manufacturer websites.

The initiative responds to the growing popularity of Wegovy and Zepbound, which clinical trials have shown to achieve 15% to 20% body weight reduction by slowing digestion and prolonging satiety. These medications, produced by Novo Nordisk and Eli Lilly respectively, have seen surging demand, exacerbated by shortages that fueled sales of compounded versions from companies like Hims & Hers, Noom, Weight Watchers, and Ro. However, the Food and Drug Administration’s policy permitting these compounded copies is set to expire on May 22, prompting adjustments in the market, with Noom announcing last week its plan to continue offering smaller doses post-deadline. A January research study highlighted the cost barrier for uninsured patients, noting average prices of $549 for Zepbound directly from Eli Lilly and $650 for Wegovy with a Novo Nordisk discount card.

Cigna’s cost-capping strategy, as explained by Evernorth senior vice president Harold Carter, aims to integrate these medications seamlessly into pharmacy benefit management plans, potentially reshaping patient access and affordability in the weight-loss drug market. This development could pressure companies like Hims & Hers, which have relied on compounded versions to capture market share during shortages, contributing to the stock’s recent volatility. The broader implications of Evernorth’s initiative may influence competition and pricing dynamics in the pharmaceutical sector, as demand for effective weight-loss treatments continues to grow, driven by their proven efficacy and increasing consumer interest in health management solutions.

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