BloombergBusinessweek November 9, 2020
say yes as often and as quickly as possible. Hims wanted to
make sure each prescription application received a decision
in less than 24 hours, he said, and he planned to “relax” the
guidelines for prescribing erectile dysfunction and hair-loss
meds, which sometimes denied patients with other health
conditions or who were taking certain other drugs.
“You will find, most likely, that you’re going to be accepting
a lot more prescriptions than denying,” Rawlinson said on one
of the 2018 calls. “We’re getting a lot of, I wouldn’t say com-
plaints, but a lot of concern from a lot of patients asking why
they were denied.” At that time, about 80% of patients seek-
ing treatment for erectile dysfunction and hair-loss drugs were
being approved, according to a slide in a Hims presentation
later seen by Businessweek, but the company wanted to bump
up that number. One doctor says that when Rawlinson came
on board, he asked physicians to issue prescriptions to patients
they had previously denied. Under Rawlinson’s relaxed rules,
the doctor says, a patient with diabetes, for example, might no
longer be told to seek an in-person evaluation to receive erec-
tile dysfunction medications.
Hims said in a statement that
its prescribing guidelines were
updated because the initial rules
were “incredibly conservative” and
that no guideline changes lowered its
standards for patient care. The com-
pany said each medical condition
has its own set of guidelines in keep-
ing with accepted clinical practices.
In the calls, Rawlinson told
doctors they could always cancel
the prescription later if there was
some problem.
“You don’t see what we’re seeing,” one of the doctors on that
call told him. The patients she was seeing via Hims were much
more prone to lying about their medical histories to make sure
they got their prescriptions, sometimes omitting serious com-
plicating conditions like diabetes. One patient she’d denied for
such a reason just that morning, she said, had told her, “I’ll just
go to your competitor and not tell them I have this.”
“There’s no way to stop that, unfortunately,” Rawlinson
replied.
When one physician on the same call demanded clearer
independence for Bailey Health, so the doctors could develop
their own more stringent protocols, Rawlinson told the doc-
tors that wasn’t going to happen. “I look at Hims and Bailey
as kind of one organization,” he said.
In a statement, Hims again emphasized that the companies
are distinct, and said it requires doctors to respond to patient
requests with due speed but not necessarily to prescribe.
By the end of 2019, as Hims prepared to start selling more
serious medications, it eliminated Rawlinson’s VP job from
its payroll, though he remained a member of Hims’s medi-
cal board through August. The company hired Chief Medical
Officer Patrick Carroll, a primary care physician who previously
oversaw Walgreens’s retail clinics. Hims began offering primary
care and talk therapy around the time Covid lockdowns began
in the U.S. in March. It rolled out an at-home coronavirus test
in May. Free Covid tests are readily available; Hims’s costs $150.
In the first six months of this year, Hims says, its telehealth
sessions almost doubled its total for all of 2019. In its most
recent quarter, it processed close to 600,000 orders. Sexual
health products still account for most of its business, but
Dudum says the pandemic put the company years ahead of
schedule in its push toward treatments for more conventional
chronic illnesses. In an unusual vote of confidence, all of Hims’s
investors said in October that they plan to roll almost all their
equity into its public listing rather than cash out, according to
Alex Taubman, the president of Oaktree’s venture arm.E
ven so, Hims is operating in unsettled legal territory.
Telemedicine is governed by a thicket of largely out-
dated state and federal rules. The FDA doesn’t regulate the
practice of medicine—that’s left to state-level medical boards,
which generally investigate only
when there’s been a complaint—but
the federal agency could step in and
limit some kinds of telehealth mar-
keting. Regulators could also target
prescribing doctors. The California
medical board last year revoked the
medical license of a doctor it said
prescribed Viagra through a site
called KwikMed.com without exam-
ining the patient.
During the pandemic, however,
many state-level restrictions on tele-
medicine have all but evaporated,
and it may be much tougher to meaningfully regulate the
industry. The stakes will get higher as Hims, and likely other
telehealth companies, continue offering tests and prescribing
medications for more serious conditions. Hims says it expects
a big slice of its future business to come from antidepressants,
which many patient advocates already view as overprescribed.
“We tend to think about physicians making decisions based on
the individualized interest of the patient, but if they’re mak-
ing decisions based on a company incentivized to sell drugs,
that’s a problem,” says Patricia Zettler, a former FDA attorney
who teaches law at Ohio State University.
Hims says it’s working firmly within the bounds of the med-
ical system, providing “access to treatment for conditions that
the medical community has established can be safely and effec-
tively treated via telehealth.” 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 says salesmanship can still change U.S.
health care for the better, and he’s committed to working in the
field until those changes are manifest. “Ten years from now,”
he says, “the health system is going to look and feel more like
consumer brands than hospitals.” <BW>55