Bloomberg Businessweek November 9, 2020 pp52-55. “Hims Makes Online Prescriptions Easy-Maybe TOO Easy” “The $1.6billion telehealth startup is about to go public. Is anybody going to rein it in? By Kristen V. Brown and Gerrit De Vynck.
image credit forhims.com
Please read the BBW for full back story and many other details.
Hims Inc. founded a few years ago by Andrew Dudum, CEO, is currently leveraging snappy marketing to penetrate the online and telehealth business. Using upbeat messaging like “Your future you thanks you”, “Balance is everything” and “You’re not alone” Him’s sells consultive medical services and generic pharmaceuticals aimed at improving male and female libido, sexual health and hair loss. “Consumers 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.” Hims makes money by charging more. For example, selling generic 40 mg “Viagra” for $4 rather than coupon-cost of $1.70 at a local pharmacy. In May, they also started offering COVID testing for $150. Future plans call for entering markets for diabetes, hypertension, lipid disorders, insomnia, skin care-acne, depression and even infertility. Dudum comments “We’re at the beginning of what I believe is 10, 20 years of growth for this company…on the forefront of innovation and health care.”
Currently they have ¼ million subscribers, 600K orders so far in 2020, and are predicting profit and 2020 revenue of $138M up 66% verses FY 2019. Venture investors have dropped $200M so far and by end-of-year Hims will merge with Oaktree Capital Management to take them public with a private-equity valuation of $1.6B.
Of course, all this is not happening with some controversy regarding the practice of medicine as governed by a “thicket of largely outdated state and federal rules. The FDA doesn’t regulate the practice of medicine-that’s left to state-level medical boards.” The play to their 200+ physicians, like other GIG economy jobs, is flexible workhours, working from home, and fewer patient encounters with less pressure to produce medical-practice volume. The latter, less corporate-medicine hustle, hasn’t panned out as physicians are consulting on “200 to 300 patients a week” versus the average of 100 inpatient exams. Hims claims only to require prompt responses to patient inquiries but does admit to evaluating physicians that are far below typical production. Some physicians, speaking in anonymity, counter saying “managers and customer service reps made clear the company saw them as salespeople and pressured them to keep their numbers up. “I don’t feel like I’m practicing medicine. I’m just serving the company, selling their products.” As "hims" ventures into more serious conditions having a path for actual inpatient exams is essential. “The company recently partnered with Privia Health, a network of more than 2,600 doctors across multiple states, to begin offering in-person consultations as well as virtual ones.”
Dudum comments “Ten years from now the health system is going to look and feel more like consumer brands than hospitals.”