The Future

Welcome to the age of the online pseudo-pharmacy startup

Where everything is pastel colored, VC-funded, and capital-C Cool.
The Future

Welcome to the age of the online pseudo-pharmacy startup

Where everything is pastel colored, VC-funded, and capital-C Cool.

Last week, Amazon announced its long-rumored pivot to medication with the purchase of PillPack, an online pharmacy startup capable of shipping prescriptions around the country. As disconcerting as the image of Jeff Bezos knowing exactly how much Prozac you have to take to survive sitting in an office chair all day may be, Amazon’s latest acquisition is merely a small part of a much larger, complicated trend. A perfect storm of events has incentivized the launch of a fleet of startups that exist in the space where Silicon Valley’s boundless cash for young white dudes who are capable of saying the word “disruption” meets Big Pharma. It’s literally never been easier to get prescribed basically anything, pay for that prescription, and get it in your hands all without leaving the comfort of your home.

Welcome to the age of the online pseudo-pharmacy startup.

Unlike a traditional online pharmacy startup, the pseudo-pharmacy startup is loathe to be categorized as a stodgy medical institution. It’s the manic pixie dream girl of pharmacies: cool, effortlessly gorgeous (in a totally non-threatening way, of course), and even a little bit cheeky, all the while existing solely to teach their partners that they too can have it all.

If you’ve used Spotify, Pandora, or Instagram (or taken the New York City subway in the last few months), you’ve probably seen glossy, minimalist ads, generally featuring an uncomfortably droopy cactus against a pastel-colored backdrop, with few printed words besides “Hims,” the startup’s name. Sometimes the cactus is swapped out for a wilted eggplant or banana, sometimes it’s a pair of well-manicured hands covered in some suspiciously viscous white goo, but regardless, the messaging remains the same: This is a Cool, Hip product, it screams, for millennials and people who put a lot of effort into Instagram.

you can do it ! you can do it all night long ! 🕺🏽

A post shared by hims (@hims) on

we see and hear you NYC! subway take over starting .... now !

A post shared by hims (@hims) on

Hims is like Glossier, but instead of skincare products and makeup for people who don’t need makeup, it hawks prescription medication for erectile dysfunction, hair-loss, and herpes. Hims prescribes medication to men around the country remotely as a telemedicine platform, which connects users with licensed practitioners through an app, eliminating the need to go physically see a doctor. Users are invited to take a quick online survey about their general health and medical and family history, as well as send in relevant supplemental info, like photos of the affected area, in the case of cold sores or hair loss. All of this is then sent to one of Hims’ many remote doctors for review, who have the ability to follow up with the customer via text, call, or video chat, if need be.

And it’s not alone. The similarly sleek startup Roman also diagnoses ED and prescribes medication online (albeit with significantly more obnoxious ads), as does LemonAid, while the Birchbox-esque startup, Keeps, prescribes FDA-approved hair-loss drugs through an app.Coverage depends on the user’s general location, as doctors have to be licensed to practice in that particular customer’s state in order to legally prescribe them a legitimate medication through these services.

The growing popularity of the online pseudo-pharmacy has some worrying implications for personal privacy in this adtech-powered day and age. Though the private medical information that these companies collect on their customers is protected under HIPAA, it can still be sold to data brokers or used for third-party marketing services if anonymized, which could allow tech giants like Facebook, Google, and Amazon to make their ad targeting algorithms even more scarily accurate by incorporating of huge swaths of medical data.

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Part Goop-style wellness brand, part classic profit-hungry startup, part licensed prescriber — these companies exist in a gray space between industries, resulting in a somewhat jarring conflation of the patient and customer/user roles. Neither Hims, Roman, or Keeps take insurance, and — in a classic Silicon Valley fashion — few, if any, will cop to their status as a bonafide online pharmacy, instead choosing to hide behind fuzzy buzzwords and airy descriptions — a “men’s wellness/health brand,” versus, you know, a prescription medication dispenser that really likes pastels — which just so happen to absolve them of the high ethical standards generally associated with legitimate pharmaceutical institutions.

“In no way are we a direct-to-consumer hair-loss company. In no way are we an online pharmacy that can ship you ED drugs,” said Hims CEO, Andrew Dudum, in a statement to BuzzFeed News. Instead, telling BuzzFeed that “holistic men’s wellness brand” was a more apt description, since the company also sells supplements, non-prescription shampoo, skincare products, and merch, while maintaining a lifestyle blog.

There’s a whole host of equally aesthetically-pleasing pharmacy startups for birth control as well. Nurx, Maven, and The Pill Club use a similar digital diagnosis and prescription system. But few, if any, seem to fall into the trap of emphasizing wellness over healthcare as often as those hawking drugs exclusively for men. Online birth control prescribers market their status as a legitimate pharmaceutical entity, constantly reminding users that the site is part of the healthcare industry, rather than hitting them over the head with an air of “cool” nonchalance. Customers are “patients,” and companies self-identify as "a birth control telemedicine provider and a medication delivery service."

The About page for Hims.

The About page for Hims.

Take a look at the founding dates for any major online pharmacy (from Hims to Nurx and beyond) and you’ll start to notice a trend: Those selling birth control were started in late 2014; hair-loss focused ones came soon after; those selling erectile dysfunction drugs were almost exclusively founded in late 2017. These dates aren’t random, or tied to a particular surge in demand, but rather reflective of a much more minute change in the pharmaceutical industry: patent expirations. After a long and complicated legal battle, Bayer Pharmaceuticals’ patent for Yaz, an oral contraceptive, officially expired on April 30, 2014, paving the way for other companies like Actavis, Novartis, and Lupin to sell their own generic versions of the drug. Similarly, a deal between Pfizer and Teva Pharmaceuticals meant Viagra went generic after it was announced that the patent for company’s main competitor in erectile dysfunction market, Cialis, was set to expire in late 2017.

All pharmacies, regardless of whether they’re digital or physical, make money when they fill prescriptions. Some of this money is directly transferred from customer to business (e.g. copays, or, if the customer doesn’t have insurance, the total cost of the medicine). Just how much money a pharmacy makes per prescription depends upon the status of the drug itself. Brand name drugs with intact patents are significantly more expensive for pharmacies to obtain than generics.

By manufacturing its own products with FDA-approved active ingredients that have recently gone off-patent, Hims is able to turn a larger profit than a traditional pharmacy that relies on a third-party manufacturer. Profit margins are only further increased by the lack of physical retail space, and the fact that they — along with every other men’s wellness focused pseudo-pharmacy startup — only sell medications that aren’t covered by insurance, relying on soothing branding and a streamlined purchase process to draw in customers.

More and more online strong-brand pharmacies like Hims have been popping up as of late thanks to a number of key victories for telemedicine over the last decade. in the telehealth industry. Teledoctor visits and teleprescriptions are legal in most states, in some form, which has led to an increase in remote medical services from therapy to general practice. Obviously, the primary benefit of such a system is convenience. In the case of men with ED or hair-loss, privacy also plays a role: There is still a stigma around seeking help, and going to a physical doctor’s office can often be an embarrassing or awkward experience.

That being said, the setup of companies like Hims, Roman, and Keeps doesn’t exactly lend itself well to open communication between the doctor and patient, as there are, by default, little to no opportunities for the two parties to freely communicate in real time. Doctors work essentially as remote contractors, approving and denying prescriptions from afar based on the information presented to them by the customer (though they have the option to follow up with customers through an in-house messaging system, phone, or video chat). And though the companies claim to pay doctors regardless of whether or not they prescribe users the drug in question, it’s difficult to imagine there’s no pressure to drive sales.

“If they are acting as a pharmacy they have to comply with the regulations that apply to health care providers,” Sharona Hoffman, a bioethics and law professor at Case Western Reserve University, told The Outline. The HIPAA Privacy Rule ensures that companies can’t sell or share private medical data with third parties like marketers and data brokers. However, companies can get around this restriction and sell their batches of health information so long as they strip the datasets of personally identifiable markers, like your social security number or name. “If you're sophisticated and have a lot of experts there are a lot of uses you could put that [data] to,” explained Hoffman. “You might be able to develop algorithms that help you advertise certain products to particular subgroups.”

What’s more, the websites for all of these online pseudo-pharmacies have either Facebook social plugins or the Facebook tracking pixel embedded in them. Meaning that regardless of whether the companies themselves share that you take a particular medication regularly with marketers, Facebook already knows if you visit the associated site with the frequency of a regular customer, and likely has adjusted its understanding of you accordingly.

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