Amazon Ventures into Erectile Dysfunction Treatment Market, Potential Impact on Hims Shares
Amazon Ventures into Erectile Dysfunction Treatment Market, Potential Impact on Hims Shares
Amazon is delving deeper into the medical field with fixed pricing for treatments of specific conditions such as erectile dysfunction and hair loss. Prime members can now see the expense of a telehealth consultation and their desired treatment ahead of time, allowing them to decide if they wish to proceed before scheduling a telehealth appointment. This information was previously reported by CNBC.
An initial video consultation costs $49, or $29 for messaging, if permitted. In terms of medication costs, anti-aging skincare medication will set you back $10 per month, while erectile dysfunction treatment will cost $19. Other treatments with upfront pricing include those for motion sickness at $2 per use, hair loss at $16 per month, and eyelash growth, which will cost you $43 monthly (seems a bit steep). Amazon offers treatments for over 30 common conditions, but only the aforementioned five have upfront pricing at present. The pricing will appear at checkout when users are logged into Amazon with a Prime membership. Medications are HSA-eligible if you have one.
Amazon acquired primary care provider One Medical for $3.9 billion in 2022, and fills prescriptions through Amazon One Medical. Medications are conveniently packaged in standard Amazon packaging, so no one will know you're ordering ED medication.
The healthcare industry has been a significant focus for Amazon in the U.S., where it is notably not free but instead represents a massive multi-trillion dollar market.
Amazon One Medical offers treatment for a multitude of ailments, including hair loss. (Source: Gizmodo)
In 2022, Amazon dipped its toes into the primary care market by purchasing One Medical for almost $4 billion. It also shelled out $750 million in 2019 for PillPack, a company that pre-sorts and delivers medications for individuals managing multiple medications simultaneously. Besides providing a potential new source of income, the upfront pricing for Prime members could also contribute to subscriber retention if members become accustomed to using Amazon for their medications. People are reluctant to change their medication providers frequently.
Amazon's competitors in the telehealth sector have taken the news less than favorably. Hims & Hers, which offers similar medications prescribed over the internet, saw a significant drop of over 20% today following Amazon's announcement. Telehealth companies saw a boom during the pandemic when the U.S. government relaxed regulations on insurance billing.
Other retailers, such as CVS, Safeway, and Walgreens, also have substantial healthcare units. CVS generates nearly 70% of its revenue, or approximately $200 billion, from prescribing medications.
Safeway and Walgreens invested hundreds of millions into Theranos, the blood testing startup that turned out to be a fraud. They had ambitious plans to make potentially billions off providing finger-prick blood tests that could run hundreds of tests, but in the end, they were forced to compensate customers with tens of millions of dollars in damages after it was discovered the tests they received were faulty.
It's unfortunate that Americans have to pay so much for healthcare. But at least Prime membership costs only $14.99 per month. Beyond the cost of the consultation and the medication, there are no additional fees associated with obtaining prescriptions from Amazon.
In the future, we might see Amazon expanding its upfront pricing model to more healthcare conditions, leveraging its acquisition of One Medical and other investments in the tech-driven healthcare sector. With the growth of telehealth and tech-enabled healthcare services, Amazon's tech-based approach holds potential to revolutionize the cost and accessibility of various medical treatments.