Hims & Hers $HIMS ( ▲ 0.92% ) fell on Wednesday after two US lawmakers introduced a bill that could sharply limit the company’s fastest-growing business: compounded versions of blockbuster GLP-1 weight-loss drugs from Eli Lilly $LLY ( ▲ 1.45% ) and Novo Nordisk $NVO ( ▲ 1.87% ).
The proposed legislation, called the Safeguarding Americans from Fraudulent and Experimental Drugs Act of 2025, was introduced by two Indiana representatives, the home state of Lilly. The bill would raise the legal threshold for when pharmacies can sell compounded copies of branded medications, a market that has exploded as demand for GLP-1s has surged.
Citi analysts called the bill a direct headwind for Hims. They noted that it would meaningfully restrict Hims’ ability to sell compounded GLP-1s, a category that has driven much of the company’s revenue growth over the past year.
Under federal law, compounders can sell copies of a branded drug only when it is officially in shortage. Lilly and Novo’s GLP-1s were removed from the FDA’s shortage list earlier this year, meaning bespoke versions are supposed to be limited to individual patients with documented medical necessity.
Telehealth companies like Hims have continued promoting these versions as “personalized” treatments. The SAFE Act would tighten that definition, requiring physicians to determine whether a compounded version offers a meaningful difference over the commercial drug.
Lilly and Novo have argued that these compounded products are mass produced, not customized as intended by law. They have taken several telehealth companies to court and urged the FDA to increase enforcement, though oversight is split between federal and state regulators.
If passed, the bill could give the FDA clearer authority to crack down on compounders and protect drugmakers’ market share. Hims has not yet commented on the proposal.