May. 2 at 5:00 PM
Most bulls on
$HIMS think the company can lock customers in via membership models, becoming some kind of Amazon or Netflix in healthcare.
Much of the previous optimism regarding Hims' profit margins stemmed from the low cost of compounding Ozempic-like drugs.
However, the company must now purchase GLP-1 drugs from the original manufacturers (
$NVO and
$LLY), a practice widely considered financially difficult. For example, many retail pharmacies are reconsidering the sale of GLP-1 drugs due to their high cost and limited insurance coverage. This challenge is further exacerbated by the fact that HIMS does not accept insurance, whereas
$AMZN does.
As a result, Medicaid will not cover these drugs under the new Centers for Medicare & Medicaid Services (CMS) program and the BALANCE model.
