The news: Eli Lilly joined forces with direct-to-consumer (D2C) telehealth company Ro to offer single-dose vials of its GLP-1 Zepbound to Ro patients with obesity.

Previously, this reduced price form of the medication was only available on the drugmaker’s D2C website for its LillyDirect self-pay pharmacy (meaning insurance isn’t accepted). Now, consumers can get 2.5 mg and 5 mg vials of Zepbound for $399 per month and $549 per month, respectively, through Ro’s platform as well as Lilly’s.

The opportunity for Lilly: The drugmaker opens up a new distribution channel for Zepbound by leveraging Ro's advertising and marketing prowess. Since its launch, Ro has assisted more than 1.5 million patients and facilitated over 8 million digital health visits.

Further, Ro will no longer exclusively offer a compounded version of tirzepatide (marketed as Zepbound for weight loss). Lilly can directly benefit from patients who were previously getting the compounded version of its drug from Ro, as many could switch to single-dose Zepbound.

And for Ro? It can now offer branded Zepbound to draw in consumers who may have otherwise been wary of compounded versions after the FDA issued warnings about them.

Our take: Two aspects of Lilly and Ro’s tie-up immediately stand out to us.

1. Ro's press release uses highly favorable language to describe Zepbound—a drug it's been it's been competing with since the compounded GLP-1 frenzy began.

The use of phrases like “the FDA-approved, rigorously tested Lilly medicine” represents a curious about-face for a company that was recently selling compounded versions of tirzepatide. Especially considering Ro continues to sell compounded semaglutide (marketed by Novo Nordisk as Ozempic and Wegovy).

2. It’s surprising to see competitors become business partners.

We think Lilly’s decision to partner with Ro makes sense since Ro is willing to appease drugmakers to gain access to their branded GLP-1s. Choosing to join forces with Ro’s top competitor Hims & Hers likely would’ve been a more contentious relationship, considering Hims has doubled down on offering compounded GLP-1s, even going so far as purchasing an FDA-registered compounding pharmacy.

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