HIMS Commentator
TSLL Gain HunterReuters: Employers cutting weight-loss drug insurance coverage could present new growth opportunities for Hims
New York, June 25 (Reuters) – Investors and analysts say remote healthcare provider $Hims & Hers Health(HIMS.US) may benefit next year from a trend of employers stopping coverage for weight-loss drugs. These drugs include Novo Nordisk's Wegovy, Eli Lilly's Zepbound, and Foundayo, as companies aim to control costs.
Industry experts say a surge in the use of such drugs is driving up healthcare costs for employers. Some employers plan to inform employees in 2027 that they will no longer pay for these medications.
Instead, employees are expected to turn to direct-to-consumer products, including subscription services from telehealth companies like Hims. Such services typically bundle doctor appointments and medication access.
Analysts currently expect Hims' revenue to reach $2.89 billion this year and $3.45 billion in 2027. Since May, seven analysts have raised their performance expectations for the company for 2026, partly due to Hims' cooperation agreement with Novo Nordisk to sell its drugs.
Raul Shah, CEO of DocShah Financial, said about one-third of Hims' revenue comes from its weight-loss business, and that business is still growing. DocShah Financial holds less than 1% of Hims' shares.
He said:
"I expect that percentage to continue to rise as more Americans join the GLP-1 craze."
He added that he believes the U.S. weight-loss market is shifting from reliance on insurance coverage to other payment models.
A spokesperson for Hims and Hers declined to comment.
Employers Pushing Employees Toward Out-of-Pocket Drug Purchases
According to KFF, employer-provided health insurance plans are the primary source of health coverage in the U.S., covering over 150 million Americans.
In 2025, about 43% of employers provide insurance coverage for weight-loss drugs; the projected rate for 2026 is roughly the same.
But data from the large employer policy research group Business Group on Health shows that among employers currently covering GLP-1 weight-loss drugs, 10% plan to stop covering them in 2027.
Truist analyst Jailendra Singh said employers are directly pushing employees toward cash-pay models through benefit guidelines and by promoting platforms like TrumpRx and drugmaker pharmacies. Health insurer Cigna is an example, having stopped covering these drugs for its own employees.
Novo Nordisk and Eli Lilly offer cash-pay prices through their own pharmacies, NovoCare and LillyDirect, respectively. Out-of-pocket starting prices for Novo Nordisk's Wegovy and Eli Lilly's Foundayo weight-loss pills are $149 per month.
Novo Nordisk's New Partner
Hims was once one of the largest telehealth providers of weight-loss drugs in the U.S., even after it stopped compounding large-scale alternative versions of Novo Nordisk and Eli Lilly drugs. Due to no longer facing shortages of brand-name drugs, Hims needed to adapt to new compounding rules, leading to its profit and revenue missing expectations last quarter.
Hims announced in March that it would partner with Novo Nordisk to sell its brand-name drugs but would also continue selling compounded versions with special dosages or formulations where regulations allow.
Jamey Millar, Executive Vice President of Novo Nordisk's U.S. business, said that since then, Hims and Hers has driven the largest sales volume among Novo Nordisk's telehealth partners.
Analysts say it's still too early to estimate how many subscribers Hims has gained from its partnership with Novo Nordisk. Hims had 2.6 million subscribers in the first quarter, a 9% year-over-year increase.
Morningstar analyst Keonhee Kim said:
"Second-quarter results should give us further insight into how many new subscribers are joining the platform and how the weight-loss product portfolio is performing."
Most of Hims' revenue comes from auto-renewing subscriptions. For GLP-1 users, the subscription costs $39 for the first month and $149 per month thereafter. The fee includes unlimited clinical consultation services but not the cost of the medication itself.
Hims and Hers shares closed at $32.70 on Wednesday, down more than 50% from the $72 high reached in July 2025.
Competitors Also See Demand Growth
Competitive telehealth companies including Noom, Ivim Health, and Ro say they expect demand to continue growing as prices fall.
A spokesperson for Columbus, Ohio-based Ivim said demand for Wegovy pills has grown 345% since January. Ro also said Wegovy pills have boosted demand and attracted new customers, including men.
Analysts say that because Hims already has a large and sustainable recurring customer base, it offers drugmakers more attractive market coverage compared to smaller competitors.
Truist estimates that about 70% to 80% of Hims' new weight-loss subscribers renew monthly, indicating it remains competitive.
Facing declining corporate insurance coverage, drugmakers like Novo Nordisk may want to directly reach users already on Hims and other subscription-based telehealth platforms rather than finding more patients themselves.
Rajiv Leventhal, healthcare analyst at commercial data firm eMarketer, said:
"What drug companies are good at is business-to-business sales."
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