Hims Makes Online Prescriptions Easy—Maybe TOO Easy
Bloomberg Businessweek|November 09, 2020
The $1.6 billion telehealth startup is about to go public. Is anybody going to rein it in?
Kristen V. Brown and Gerrit De Vynck

A gainst all odds, the box of pills is cute. On one side of its winsome cardboard shell, a custom typeface spells out the brand name, Hims, in all lowercase, giving off a vibe somewhere between an e.e. cummings poem and a retro zine. A pamphlet that comes with the drug—Addyi, a controversial pill that aims to increase female libido—trades in millennial-empowerment language worthy of Goop. “Future you thank you,” it begins, followed by a string of rah-rah slogans like “balance is everything” and “you’re not alone.” Also included: a stylized postcard of a woman joyfully watering plants in a pair of clogs. The minimalist white pill bottle would blend in on a shelf at an Apple Store.

Hims Inc. is a 3-year-old telehealth company in San Francisco. This year, as the pandemic created a surge of demand for online medical care, the startup began providing Covid-19 tests as well as primary care and mental health services. Mostly, though, it’s known for offering generic prescription drugs to treat erectile dysfunction and hair loss. Customers fill out an online questionnaire, perhaps exchange a few messages with a prescribing physician, then get the medication shipped to their homes without having to take a separate trip to the doctor. For this service, Hims charges a premium. It sells a month’s worth of a generic version of Viagra for $4 per 40- milligram pill; at local pharmacies, a larger 50mg dose costs as little as $1.70 each with a coupon.

In Hims ads and on the company’s website, the products’ relevant medical information is scattered among hyperphallic cacti, eggplant emojis, and a cartoon Snoop Dogg. As with other mail-order brands of the past decade, such as Casper and Warby Parker—which sell mattresses and eyeglasses, respectively—the packaging is central to the sales pitch. In an interview conducted pre-Covid, Chief Executive Officer Andrew Dudum says his goal was to build a health-care delivery system with the inviting gloss of Instagram. “When you use it, endorphins are rushing through your body,” Dudum says of the photo-sharing site. “That currently doesn’t happen in the health system, which is a big problem. It’s an ugly experience.”

Insufficiently grabby marketing of white-label libido pills wouldn’t top many lists of problems with U.S. health care. The country’s 330 million citizens pay at least twice the going global rates for most pharmaceuticals. And for the roughly 30 million who lack health insurance, costs are usually far higher.

Still, as the pandemic has widened the gaping holes in America’s fragile health-care system, Hims has capitalized on priorities further up Maslow’s hierarchy of needs. Its shiny veneer, wellness lingo, and ability to prescribe over the internet have helped attract more than a quarter- million subscribers to its upmarket commodities over the past three years. It says it’s profitable and on track to bring in $138 million in revenue this year, up 66% from 2019. In October, Hims announced plans to go public by the end of the year through a merger with a special-purpose acquisition company spun out of Oaktree Capital Management, a deal that values Hims at about $1.6 billion. To date, investors have supplied Hims with more than $200 million in venture funding.

The Oaktree timetable means that Hims will likely be the first of a slew of similar telemedicine companies to join the public markets as the need for remote doctoring grows. These businesses market treatments for everything from ADHD to aging. Dudum says he’s interested in expanding into such conditions as diabetes, hypertension, high cholesterol, insomnia, and infertility in the coming years, bringing the company’s marketing expertise to a much wider range of chronic conditions. “We’re at the beginning of what I believe is 10, 20 years of growth for this company,” he says, adding that Hims is “at the forefront of innovation and health care.”

And yet Hims’s real innovation isn’t in destigmatizing embarrassing medical conditions. It’s in making prescriptions extremely easy to get—maybe too easy, critics say. Interviews with six current and former Hims doctors, as well as interviews with other employees and recordings of company phone calls shared with Bloomberg Businessweek, suggest that Hims has pushed the bounds of medical ethics. Each of its 200-odd doctors sees hundreds of patients a week. Often, doctors prescribe Hims drugs for uses the U.S. Food and Drug Administration hasn’t approved. (In one ad, which Hims says it’s removed from its social media campaigns, it pitched a blood-pressure drug, sometimes prescribed for anxiety, as a way to calm down before a big date.) U.S. doctors are allowed to prescribe drugs at their discretion, but pharmaceutical companies aren’t allowed to market medications for off-label uses, and it’s unclear whether such rules might apply to Hims. Many states also forbid companies from instructing doctors on how to do their jobs.

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