Amazon said that Prime members will have access to new fixed pricing for the treatment of ailments including erectile dysfunction and men’s hair loss, as part of its most recent effort to compete with rival direct-to-consumer markets like Hims & Hers Health and Ro.
TakeAway Points:
- Amazon said that new upfront prices for the treatment of five common diseases, including men’s hair loss and erectile dysfunction, are now available to Prime members.
- The company now faces competition from other direct-to-consumer marketplaces, such as Ro and Hims & Hers Health, as a result of the move.
- There are no extra costs; Prime members will cover the cost of the drug and a consultation with a clinician.
Amazon fixed pricing
Amazon announced that, as part of its latest attempt to compete with other direct-to-consumer marketplaces like Hims & Hers Health and Ro, Prime members will have access to new fixed pricing for the treatment of conditions like erectile dysfunction and men’s hair loss.
Shares of Hims & Hers closed down more than 24% on Thursday, the company’s worst day on record.
Amazon said in a blog post that Prime members can see the cost of a telehealth visit and their desired treatment before they decide to proceed with care for five common issues. Patients can access treatment for anti-aging skin care starting at $10 a month; motion sickness for $2 per use; erectile dysfunction at $19 a month; eyelash growth at $43 a month, and men’s hair loss for $16 a month by using Amazon’s savings benefit Prime Rx at checkout.
Amazon acquired primary care provider One Medical for roughly $3.9 billion in July 2022, and Thursday’s announcement builds on its existing pay-per-visit telehealth offering. Video visits through the service cost $49, and messaging visits cost $29 where available. Users can get treatment for more than 30 common conditions, including sinus infection and pink eye.
Medications filled through Amazon Pharmacy are eligible for discounted pricing and will be delivered to patients’ doors in standard Amazon packaging. Prime members will pay for the consultation and medication, but there are no additional fees, the blog post said.
Hims & Hers
Analysts at Bank of America downgraded shares of Hims & Hers from buy to underperform on Thursday, citing Amazon’s push into the hair loss and erectile dysfunction markets. The analysts said Hims & Hers generates more than 80% gross margins from its core erectile dysfunction and hair loss offerings and estimate that Amazon’s medications for those conditions are about 42% and 29% cheaper, respectively.
As a result, the analysts said they think Amazon will limit the prices that Hims & Hers can charge and will hinder the company’s ability to attract new customers.
“While Amazon may not offer the same personalized products, its wide net (we estimate 150MM Americans have Prime) creates a serious competitive threat for HIMS, in our view,” they wrote in a Thursday note.
Amazon has been trying to break into the lucrative healthcare sector for years. The company launched its own online pharmacy in 2020 following its acquisition of PillPack in 2018. Amazon introduced, and later shuttered, a telehealth service called Amazon Care as well as a line of health and wellness devices.
The company has also discontinued a secretive effort to develop an at-home fertility tracker, as reported Wednesday.
