Telehealth provider Hims & Hers Health is poised to benefit from a significant shift in the healthcare landscape, as employers increasingly consider withdrawing coverage for popular weight-loss medications.
Soaring costs linked to drugs like Novo Nordisk‘s Wegovy and Eli Lilly‘s Zepbound are prompting some employers to inform staff that these treatments will no longer be covered from 2027, according to industry experts.
This shift is anticipated to redirect individuals towards direct-to-consumer platforms, such as Hims’ subscription services, which bundle virtual consultations with healthcare providers and facilitate access to medicines.
Analysts currently estimate Hims revenue at $2.89 billion this year and $3.45 billion for 2027. Seven analysts have raised 2026 estimates for the company since May, boosted in part by its deal with Novo to sell its drugs.
Raul Shah, CEO of DocShah Financial, which owns less than 1% of Hims shares, noted that approximately a third of the company’s revenue currently stems from its expanding weight-loss division.
“I project that ratio to continue increasing as more Americans partake in the GLP-1 mania,” he said, adding that he sees the US weight-loss market shifting away from relying on insurance coverage.
A spokesperson for Hims and Hers declined to comment.
EMPLOYERS PUSH EMPLOYEES OFF
Employer-based plans are the most prevalent source of health insurance in the United States, with over 150 million Americans enrolled in them, KFF data showed.
About 43% of employers covered the drugs for weight-loss in 2025, and estimates for 2026 are about the same.
But 10% of employers currently covering GLP-1 drugs for weight loss said they planned to drop the drugs in 2027, according to the Business Group on Health, a policy research group for large employers.
Truist analyst Jailendra Singh said employers are directly driving cash-pay activity, through benefit guides and by advertising platforms like TrumpRx and manufacturer pharmacies. Health insurer Cigna is one example, dropping coverage of the medications for its own employees.
Novo Nordisk and Eli Lilly offer cash-pay pricing through their pharmacies NovoCare and LillyDirect. Novo’s Wegovy and Lilly’s Foundayo weight-loss pills start at $149 per month for cash pay.
NOVO’S NEW PARTNER
Hims had become one of the largest U.S. telehealth providers of weight-loss drugs, even after shifting from mass compounding of alternative versions of Novo and Lilly drugs. The company missed earnings and revenue targets last quarter as it adjusted to new compounding rules with the branded drugs no longer in shortage.
Hims in March announced it would partner with Novo Nordisk for its branded drugs but would continue to sell compounded versions in special doses or formulations, as regulations allow.
Jamey Millar, executive vice president of U.S. operations at Novo Nordisk, said Hims and Hers has since brought in the most volume of its telehealth partners.
Analysts said it was too early to provide estimates on how many subscribers Hims gained from the Novo deal. Hims had 2.6 million subscribers in the first quarter, up 9% from the year-ago quarter.
“Second-quarter results should give us a little bit more perspective on how many new subscribers are joining the platform and how well the weight-loss portfolio is performing,” said Morningstar analyst Keonhee Kim.
The majority of Hims’ revenue comes from auto-renewed subscriptions, which for GLP-1 users cost $39 for the first month and $149 for following months. That comes with access to unlimited clinical consultations but does not include the cost of the medication.
Hims and Hers shares closed at $32.70 on Wednesday, down more than 50% from July of 2025, when they reached $72.
RIVALS SEE GROWING DEMAND
Rival telehealth companies including Noom, Ivim Health and Ro said they anticipate demand will continue to grow as prices fall.
A spokesperson for Columbus, Ohio-based Ivim said the company has seen a 345% increase in demand for the Wegovy pill since January. Ro has said the Wegovy pill has increased demand and brought in new customers, including men.
Because Hims already has a large, recurring customer base, the company provides drugmakers with a more appealing footprint than smaller rivals, analysts said.
Truist estimates that about 70% to 80% of new Hims weight-loss subscribers renew on a monthly basis, indicating it has remained competitive.
Facing a decline in corporate coverage, drugmakers like Novo may want to target people who are already at Hims and other subscription-based telehealth programs, rather than looking for additional patients itself.
“Pharma knows how to sell business to business,” said Rajiv Leventhal, a healthcare analyst at commerce data firm eMarketer.
