MW Hims & Hers' stock tumbles on Amazon's latest disruptive foray into healthcare

By Ciara Linnane

Amazon is now offering upfront pricing for virtual care for ailments such as men's hair loss and ED

Hims & Hers Health Inc. shares tumbled 22% Thursday, on concerns that Amazon.com Inc.'s latest push into healthcare will disrupt Hims & Hers' business.

Amazon One Medical launched a new service Thursday that offers upfront pricing for telehealth visits for a range of issues and ailments - including men's hair loss, antiaging skin care, erectile dysfunction, eyelash growth and motion sickness.

Prime members can now see the cost of a pay-per-visit virtual visit, as well as any medications required from Amazon Pharmacy before starting care.

"This new offering makes it easy for Prime members to get expert clinical advice and prescribed treatments for common health, beauty, and lifestyle needs, all from the comfort of home," said Bergen Pehnart, general manager for Amazon One Medical's Pay-per-visit service, in prepared remarks.

Hims & Hers $(HIMS)$ similarly connects patients to healthcare professionals via its online platform.

"We don't know how successful it will be, but also note that this is a serious competitive threat being introduced to the market," Leerink Partners analyst Michael Cherny wrote in a note to clients.

Amazon $(AMZN)$ said the new service builds on its existing offer of $29 for an on-demand messaging visit or $49 for a video visit, which are payable by card or using a flexible spending account or health savings account.

"For comparison, Prime members save up to 92% on ED treatment versus popular subscription-service alternatives," Amazon said in its statement. "This simple, upfront pricing helps customers shop for their healthcare and make informed, confident decisions."

Hims and Hers' stock has rallied 141% this year, mostly due to its ability to offer its own version of the weight-loss drugs called GLP-1 agonists, which have proven so popular it has created shortages.

Food and Drug Administration rules allow compounding pharmacies to offer copycat drugs as long there's a shortage and a patient need.

The drugs offered by Eli Lilly & Co. Inc. $(LLY)$ and Denmark's Novo Nordisk $(NVO)$ (DK:NOVO.B) have been in short supply, although the FDA said last month that Lilly's Zepbound and Mounjaro were no longer in shortage.

Both companies have been expanding manufacturing to meet the demand. Lilly, for example, is investing $4.5 billion in a new plant in Indiana that will produce new medicines and scale up the manufacturing of existing drugs.

For more, read: Obesity drugs' next wave: These companies could snag 20% of GLP-1 market, analysts say

Amazon has long harbored ambitions for the healthcare business. The company acquired primary-care chain One Medical in 2023 for $3.9 billion.

It bought PillPack, a medication-delivery service that presented a clean, millennial-friendly user interface, for about $1 billion in cash in 2018. It has been working with Crossover Health since mid-2020 in setting up employee health centers that offer primary care. And it now offers Amazon Care to employees and other employers.

-Ciara Linnane

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November 14, 2024 14:40 ET (19:40 GMT)

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