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- [00:01]
Podcast Sponsor/Announcer
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- [00:46]
Ed Elson
Welcome to the profit you markets founder series. I'm Ed Elson. Healthcare in America isn't just expensive, it's often out of reach. Nearly half of Americans can't access or afford quality care. And even for those who the system is broken. Long wait times push nearly 40% to delay or skip appointments altogether. In 2017, my next guest set out to make healthcare more accessible, launching a platform that connects patients with doctors and treatments directly through their mobile devices. Today, it's grown into one of the leading telehealth companies, offering care across sexual health, hair loss and weight management, with no waiting room required. With more than 2 1/2 million subscribers, it is reshaping how people engage engage with care and redefining what the future of healthcare could look like. This is my conversation with Andrew Dudham, co founder and CEO of Hims and Hers. Andrew, thank you for joining me on the podcast. I guess I want to start with the founding story of hims and hers. Back in 2017, you start this company and back then I started to see a lot of ads around New York City that were these kind of iconic ads that I remember of these, like cacti on these billboards. And we were trying to figure out what this company did and ultimately it seems like the main product back then was erectile dysfunction medication. So tell us a bit, a little bit about the beginnings of this company. Is that right? Is that how you started?
- [02:21]
Andrew Dudum
When I started the company in 2017, at the heart of it was this opportunity to build something that really changed what people thought about healthcare. You know, all of us, I looked at my peers, my family, you'd go to the doctor, you know, essentially if your leg was bleeding or if you broke something and otherwise you just really hated that experience. But then when you look at other aspects of our lives, you pick up your phone, you click a button, and you can get access to amazing financial Services you can get on demand, food you can buy a car from your iPhone, right? I mean, like everything had been completely consumerized in a beautiful price transparent way, yet health care was still this environment that was paternalistic, that was lacked any empowerment, that lacked all price transparency, and really was built for a system, not a consumer. Right? And so what I set out to do was can we take the best of consumer love, the best of consumer health care, the best of consumer technology, the things that we've grown to appreciate in Amazon and every other service, and reimagine what's possible for everyday people when it comes to their health. And part of that is to your point at like the stigmatization of healthcare, things like sexual dysfunction, things like hair loss that affect maybe 50% of the population, things like weight loss that affects 70% of the population, actually normalizing the fact that these things happen and they're common and everyday people suffer from them, that's a big first step of it. Then the next step of it is actually making it incredibly easy to get care on demand. You click a button, you can connect with a Hims and hers doctor in minutes, often or within an hour from any state in the country, and now across nearly a dozen countries globally. And then you can receive amazing personalized care. You can get that treatment delivered to your door within a couple of days. And it makes you feel great, right? That type of opportunity to rethink what's possible in healthcare, move it from a very reactive system to a proactive one, but also build something that people love. That was really the ambition. And I think in the early days, some of the stigmatized conditions were a really great way for us to start the conversation with people about what healthcare could look like in the future.
- [04:44]
Ed Elson
So it sounds like those stigmatized issues such as hair loss, such as erectile dysfunction, these sort of male focused issues, maybe that was your entry point into becoming a larger telehealth company that focuses on a range of different issues. I guess the question is, why did you focus on those issues to begin with? Because it seems, I think in the beginnings of the company that's how hims, I mean, it originally was hims and it's transitioned to Hims and hers. I think a lot of people think of this company originally as this is specifically for male issues. Things like hair loss, things like ed. Why did you focus on those issues to begin with?
- [05:24]
Andrew Dudum
They were conversation starters, which I think was really important in healthcare. You know, we spent a lot of time talking to doctors and what they told us over and over again was men would come into the hospital, they'd have an annual appointment, the appointment would be going well, they answer all their questions, and then on the way out, as the doctor is literally leaving the room, the patient goes, hey, there was one more thing. I had one more question. And that one more question was actually the reason they came to the doctor's appointment, right? And that one more question was something like hair loss, or something like mental health, or something like weight loss, or something like erectile dysfunction or concerns around menopause. It was all of the things that everyday people go through but are kind of uncomfortable to talk about. Like that's actually the reason you are motivated and activated to, to go and interact with the system. And it makes sense because it's the thing that affects you every day, right? You wake up in the morning, they're deeply personal, they affect your relationships, how you feel with your partner, how you feel in the world, your confidence. And so to me, as a consumer technology nerd, that was an incredible opportunity to expand on. Right. If we could build a system that actually started conversations and activated you to come talk to the healthcare system, we could then go wide. Now that we have you and have delivered on this issue, you might be concerned with and treat other things. So a good example, erectile dysfunction. It's actually the only physical symptom of cardiovascular disease, period. There's no other symptom. And cardiovascular disease is the number one thing that kills men in the world. So if you can build something that activates men to come talk to you, get care for something like erectile dysfunction, you actually are bringing one of the most at risk populations in the door. And then you can say, hey, while you're here, what if we send you an at home blood test and just test some basics, right? And it turns out now we treat tens of thousands of people every year who came for erectile dysfunction and actually are at severe risk of heart attacks. And now they're getting personalized treatments with combinations of therapies to address both. So I think there's this idea of how do you activate consumers, how do you energize them and understand the things that people want and care about and then from there build trust and expand into the things that maybe they, they need.
- [07:54]
Ed Elson
Yeah, that tracks with how I've seen this company because, you know, there are, there are a lot of telehealth companies out there and a lot of companies that have had the idea of how do we figure out how to streamline the health care industry. There are all these issues in how it works and can we digitize it and make it, you know, work for a digital agent, for a digital consumer? But it seems as though with hims and hers, the thing that really got you guys out ahead, at least from an observer's perspective, is that you were willing to tackle the issue that no one really wanted to touch. And this is something we've talked about on our show a lot, which is the mental health crisis among young men, also the sexual health crisis among young men. The fact that young men aren't going out and socializing, they're not finding girlfriends, they're not finding. Establishing romantic relationships, they're not having sex. And erectile dysfunction is those. The amount of people and the rates or the share of the population who are experiencing that is on the rise. So it seems as though that. That seems to be like the entry point that puts hims on the map. And I guess I'd be interested to hear more about your views on young male health at large and how you spotted this very early in the game. We started talking about this issue a couple of years ago. You started this company in 2017, so you were very early to look at this issue and to really go out and try to address it.
- [09:28]
Andrew Dudum
You know, when I was in university, I think there was an increasing sentiment around it being not masculine to take care of yourself or even to care, right, to try to give a shit, to make an effort. And I think that, as you've seen with the acceleration of pornography, as the acceleration of Internet access and different communities in that world has created, I think, a real isolation for young men. And I think in a lot of ways, that's very, very concerning. So internally, I push our team because it's funny. I'll look at our calendar, and I have meetings on my calendar called perimenopause, and then there's meetings in my calendar called erectile dysfunction. And I think we've normalized the uncomfortable conversations internally in an attempt to try to normalize them externally. If we can't talk about it directly and honestly as an issue, as a clinical issue, that actually results, as you said, Ed, in loneliness and depression rates and social media addiction and not getting out. Like, if there's a confidence, if you. If you're struggling from obesity and there's a lack of confidence, so you're not going out and meeting people, all of those things have very massive clinical impacts, huge clinical impacts to cognitive mental health that then cycle on top to depression and loneliness and things that we see. So I actually Think it's really important for a brand like him's and hers. And I think we try to do this to be aspirational and to be energizing. Say, hey, this is not going to be a whole bunch of models that you're going to see. You're going to see real people that actually feel great. And we're going to try really hard to make it really fucking easy to feel great. Because if we can help you feel great, you're then going to get out in the front door and you're going to do something. You're going to be a better dad, you're going to be a better partner. You can help find a partner. All of those things are confidence, but they, they, they have huge impacts downstream in your life. And so I think the brand really tries to capture that. And I think there's a willingness from us to venture into uncomfortable conversations and be a brand that actually sits in that uncomfortable conversation, because that is how you activate that consumer. That is how you actually have a conversation with people that they really need to have and it catches their attention and that's ultimately what matters most.
- [12:03]
Ed Elson
So you ended up taking the company public via SPAC in 2021, which was three years after you launched. Take us through what happened between launching this company and then suddenly you're publicly traded on public stock exchanges. I mean, how did that go down?
- [12:23]
Andrew Dudum
It was a crazy time scale. I mean, I think it was probably the fastest or one of the top few fastest companies from founding to I. And you know what, what became obvious to me was the opportunity was, was there, the demand was there immediately. The need was, was kind of coming through the door and we needed very quickly to establish the capital resource, the brand resource to go and actually go after this scale. The opportunity, I mean, this is. When you step back and look at hims today, we treat 10 or 15,000 patients a day globally. That is the largest healthcare system, I think, in the world. The actual number of patients that are getting treated every single day, more on hemps and hers than our associated global brands than any other place in the world. The opportunity for impact is huge. I think we're in the earliest of innings. I think right now you've got a few million subs on the platform. I think the offerings that we're expanding into and the size of the opportunity is such that, that, that my vision is nearly everybody. You know, would be silly not to have a Hims and hers membership because it just helps make, it helps make feeling great and being healthy easy. And my Goal is to make that so unbelievably obvious to the average person and so unbelievably accessible from a price standpoint and beautiful and easy that, that people want to do it. And so for me, going public was an intentional decision to put our team in boot camp. Like public markets is brutal, right? And you see it from our stock, it's gone to whatever 70 to 2, to 50 to 10. I mean it's like up and down, like you have to have a stomach of steel. But more importantly, the team has to get really good very quickly at both setting quarterly targets and meeting long term vision. Right? You have to be able to deliver growth and efficiency at the same time. You have to be able to tell the street with confidence we're going to hit these numbers a year out and then you have to hit them or else you lose all trust. And that environment, I think is one of the most powerful assets that we've had in the last decade of our company. It is just forced rigor, it's forced discipline. And when I step back, and this was a really critical part of why I decided to put us in this pressure cooker. When you step back and look at some of the biggest companies in the world that have been built, Google, Microsoft, Meta, Amazon, these companies were public within a few years of being founded. The founders put themselves in the public markets and then had to be forced with both having a long term vision and building a great business. And not saying you can't do this in the private markets, but the public markets make it required. And so I've really, as a competitive person, I've loved that environment, I've loved what it's done to our team and I think it has prepared us to be able to go after a much bigger opportunity.
- [15:33]
Ed Elson
So did you intentionally decide that you did not want to continue raising in the private markets because you wanted the opportunity to kind of play ball in the public markets? I mean most people today are like, would prefer to play in the private markets, not deal with the headache of going public, reporting all the financials etc. That's why you didn't raise privately.
- [15:55]
Andrew Dudum
That's right, yeah. I mean we raised privately. For a few rounds the company was doing north of 100 or 200 million in revenue and it was profitable and we had very good line of sight into this business going from 100 million in revenue, 2 billion and companies now guidance this year, something like 3. So I think you believe that we had the capabilities to deliver in the public markets, but then also the public markets have unlocked incredible assets for us. Right? So we've been able to acquire very strategically critical infrastructure. We acquired one of the only US manufacturing peptide facilities last year in California. We acquired IP for one of the only at home blood testing devices. We acquired international leaders. We've brought in talent that we can actually attract because we've got a public currency. It's just materially different than private markets. So I think the public markets have given us real assets to go and actually pursue the speed at which we want to.
- [16:52]
Ed Elson
On the vision, just a side question. Do you look at the stock price? Because it's true the stock price has been very volatile up and down. Do you look at it, do you care much about it when you're, when you're running the company day to day?
- [17:05]
Andrew Dudum
The team, at this point, most of the team has been building this company for north of six years. And so you know, this is a team that's woken up and it was $2.97 and woken up and it was $70. And many of the, many of the reasons that it fluctuates has nothing to do with the business. Right? Amazon puts out a press release and the stock goes down 10%. You know, somebody else puts out a press release, it goes up 15%. So I think we've gotten numb to the movements. Long term, I think is where everybody's focused. I think the vast majority of my executive team will retire with this business. And so the reason that I and them continue to operate is because we actually just see the impact it can have. I think our combination of consumer understanding, design, clinical excellence and kind of goal to go after a huge vision and disrupting what people can expect from healthcare. I think that combination positions us very well to build something that I think is really important to people. I think what we achieve in the next decade, my hope is, and my expectation is it becomes the gold standard of what is healthcare, what people actually expect healthcare to be. It's proactive, it's got advanced diagnostics, it's with you everywhere through wearables. It's all connected. You've got the intelligence of the masses through AI. You've got doctors on demand whenever you need and they know everything about you and they're helping you make it easy to, to be your best. Both your best in the most clinical ways. Cardiovascular disease, diabetes, obesity. And also in the ways that give you confidence. Hormonal support, skincare, dermatology, sexual health. Right. And I think the combination of both is absolutely critical.
- [18:58]
Ed Elson
Just from a management perspective, if say Amazon puts out some press release and the stock falls 10% just like immediately. What do you say to the team? Like, you know, I think a lot about this organizationally, how do we keep up morale? How do we keep everyone motivated and invested in the mission? I feel like I would find it very difficult to do that if random news events were causing the stock price to fall on any given day. So what do you say to your employees and to your team when things like that happen?
- [19:34]
Andrew Dudum
Yeah, I think you have to set the expectation early with the team that it's going to be a ride. And I do that, I think very intentionally and very often to anybody. New employees, old employees. So that on those days it's not unexpected. Right. On the days that the stock rockets for no reason, I'm still in slack, still in amplitude, A B tests, asking the same questions as to why the numbers aren't getting better. And on days when the stock is tanks for some reason, I'm still doing the exact same thing. And I think that that culture of the stock is not the company. Right. The company is how we impact patients over the long haul and how we actually build a profitable cash flow business. That is the company. The ruthless focus on that I think people can get. But you have to be very consistent in that communication. The first time you bring it up can't be the day that the Stock goes down 10% from Amazon. You actually have to tell, you know, every quarter, hey, expect that the stock is going to go down, somebody's going to put out a press release, somebody's going to do something, it's going to go up and down. Because when you're disrupting something so big as the healthcare system, everybody in the world is incentivized for you to lose. Right? The PBMs, the insurers, the drug companies, the regulators, the unionized providers, everybody has figured out a way to make money from this system as it exists to today. Yet none of the financial outcomes of the system have any relation to how consumers actually feel and whether or not they are getting better. There's no relation at all to those economic dynamics. And so I think establishing in the company's mind, everything we're going to do is for the consumer. We're only going to make money when the consumer is happy. If they're not happy, they're going to leave. If they're happy, they're going to stay. We make more money. So all of our decisions are going to be based on how we make people feel better, feel great for more affordable prices. You keep that North Star there. And then you let the chaos of the market of disruption happen because, you know, we're not. We're not. I mean, you can see this just from the business. We're not a team that is shy when it comes to having hard conversations or pushing into new categories. We will fight on behalf of the consumer. And that often does cause friction and disruption. But that is a part of the DNA because we think that is right for what's best for people. And so I think with that expectation, people are good with the ups and downs, you know, as you push forward.
- [22:16]
Ed Elson
We'll be right back.
- [22:29]
Podcast Sponsor/Announcer
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- [23:43]
Ed Elson
We're back with Andrew Dudum. So GLP1 drugs and diabetes weight loss drugs. This is a new category for you guys. It's generated a lot of press. Yes, we've talked about it a lot on our podcast. We found it super interesting when you guys entered the GLP1 market, which was back in 2024, and there was a lot of controversy because of course, these GLP1s were. I mean, they were being supplied by Novo Nordisk and then eventually Eli Lilly. But there was this shortage of supply and the rules around the FDA meant that if there is a shortage of those drugs, then you can sell these compounded drugs, these sort of alternative versions of these semaglutide drugs, which is what you were Selling. And then there was a resolution in the shortage. There was a kind of an interesting legal battle with Novo Nordisk that you guys had to the extent that you can describe what happened there. Walk us through hims entry into the GLP1 market. How things played out with some of the more legacy players are now where you are today.
- [24:54]
Andrew Dudum
It was one of those sagas that I think was exciting to read about. And so it was everywhere from a news standpoint. But the actual strategy and rationale was actually really quite simple. And the regulatory framework was also really quite simple. You had a lot of new FDA medications that had come and the demand was through the roof. So there was, as you said, there was immediate shortages of these medications. And so we have about a million square feet of infrastructure across the US and globally where we can compound these medications personalized for patients. These are regulated 503A, 503B facilities. The FDA regulates these. The state boards of pharmacies regulate these facilities. You have to do exactly what you would do through, you know, CGMC kind of requirements as you would at any other drug manufacturing. Right. Like we hold the same bar of quality.
- [25:49]
Ed Elson
And just, just for our audience to understand, what does compounded actually mean when you say you compound these drugs?
- [25:56]
Andrew Dudum
Yeah, it's essentially pharmacy capabilities to bring active API ingredients, so medications that are approved by the FDA and on very specific lists that you can then combine and adjust in dosage or formulate in new form factors on behalf of the patient. So you think of one of the simplest examples, and it's not actually compounding, but back in the day, you think of the Flinsky own vitamins, right? Kids needed their vitamins, kids can't swallow pills. And so the combination of supplements in something that tastes good, that's chewable for a four year old, that's a very simple example of a compounded treatment. With this shortage, this drug shortage, our facilities from a regulatory standpoint could start manufacturing and producing these medicines, which we did simultaneously. What we identified was that, and this is all very known with these medications, the side effect rates are astronomical. Massive gastrointestinal side effects, diarrhea, nausea, vomiting. People will go to the ER for, for this stuff. And so you had this interesting dynamic where the demand was through the roof, but about 70 or 80% of patients were stopping the medication within 90 days because of very adverse reactions, like very serious reactions. And so the compounding facilities have the ability to make medicine in two circumstances. One, when there's a drug shortage and two, when there's a clinical necessity for the patient. When a provider says, for this patient, a dosing adjustment is necessary, a formula adjustment is necessary, a combination of therapies is necessary, a different form factor is necessary. Any of those reasons. Reasons. So the legal framework allows for
- [27:48]
Ed Elson
two
- [27:48]
Andrew Dudum
ways in which you can compound. For us, for about a year or two, we operated under both. There was a shortage where patients could come get the exact same medication. And then there was also a personalization exemption which allowed us to personalize medicine for patients. And I'm a really big believer when you step back and look at the healthcare system today, the future of healthcare isn't patients getting one of three dosing regimens. It's us understanding you, Ed, your body mass, your, your metabolism, your desires, your goals, and actually taking safe medicines approved by the FDA and personalizing them for you. Like, it just, it's, it's an obvious iteration of where medicine should go. When you think about precision medicine, everybody is different. And so with these medicines, particularly the side effect rates were so high that that personalization dynamic was critical for patients now. And because of that, the business grew very quickly, extremely quickly, because patients wanted that personalization.
- [28:50]
Ed Elson
Yeah, I remember you guys reporting your financials after this happened and it just blew up. I mean, it was.
- [28:57]
Andrew Dudum
The company doubled overnight. And it was amazing for, you know, hundreds and hundreds of thousands of people who couldn't get access to this medicine or who had tried the medicine and had severe side effects. Now, what happened was, I think, phenomenal. Not without friction, but phenomenal. The drug companies reacted to two different things. One, they reacted to the pricing pressure. So we were able to manufacture and compound these vials, personalize for patients, and offer it to them for something like $150. The price of the FDA approved medication at the time was $1,500. And so the pure exposure, the transparency of a model like him's and hers, where it says, hey, we're consumer oriented, we can make this stuff, we have these facilities, it costs us about, you know, 80 bucks all in with all of our stuff. So we're going to put a markup on it, we're going to sell it to you for 150. And it was very transparent about how this all worked, resulted in immense pressure on the drug companies to take the blockbuster medicine of this century and bring its price down to what consumers could actually afford. And through all types of regulatory pressure, through corporate pressure, from us, through consumer pressure, those medications are now available to consumers for $150. The brand name medications. That has never happened in the history of this country when the medicine that is brand new, recently approved and needed by the masses was able to apply enough consumer force and pressure to bring that cost down to something that people could afford. And I think it was a big part, the administration was a huge part of it. Through Trump Rx, they did a phenomenal job in applying pressure. And I think the exposure of the fact that we could actually make this medicine for this cheap and we could sell it for 150 and have a really reasonable business resulted in people applying that same pressure to the drug company. So that was an amazing transition. So that happened. The second thing happened on the personalization side. The drug companies, and we were talking to all of them, saw that 70% of their patients were stopping right after starting their medicine because of these side effects. And these were injections. With single dose injections, you put it in your belly, you click a button and you get 5 milligrams. Well, if 70% of those people are throwing up and stop using it because 5 milligrams is too much, they were coming to hims and hers. And so now fast forward two years later and the drug companies have done a phenomenal job. Novo and Lily have adopted it very quickly. They now have vials on Lily Direct where you can do custom dosing. They've got quick pens where you can adjust exactly the amount of dose for you. And then Novo just put out the Wegovy pillow. So low dose pills where you can titrate and adjust your treatment based on side effects, microdose as necessary and get to whatever the outcome is that you need. And so over the course of 18 months or 20, 24 months, our pressure by saying, hey, we've identified something that really matters to consumers. They need this personalization. And this price point is a fair price point because it's what it costs us to make. The whole industry responded. And so as a result, we have now been able to partner with Novo Nordisk directly, which is fantastic. We recently launched the Eli Lilly products on the platform because now Those products are $150 and can be personalized to patients. And so again, through our lens, we push on behalf of people. And the industry has changed dramatically as a result of the pressure in a way that we think is phenomenal for people. And now it really aligns us very well with many of these drug companies to be able to help them get these medicines to millions of individuals.
- [32:57]
Ed Elson
Such an interesting story, because it all happened because of this strange regulatory dynamic where if there's a shortage of the drug, which is what was happening because it was so new to the scene and demand was going just so crazy, then you can do these things, specifically compounding, which is basically a fancy word for let's take different ingredients, put them together in an interesting way, and then give it to the public. And you were allowed to do that because of this? I guess, sort of like a regulatory glitch.
- [33:31]
Andrew Dudum
And it's not even a glitch, Ed. It's it's. It was created for exactly this purpose.
- [33:36]
Ed Elson
Feature, not a bug, maybe?
- [33:37]
Andrew Dudum
Yeah, it's a feature. It's not a bug. It's saying, hey, if the drug companies can't make enough medicine, all of you pharmacies around the country, you can make it.
- [33:45]
Ed Elson
Which to me brings up questions of how our regulatory system in healthcare actually works. Because if it weren't for the fact that there was a shortage of the supply of GLP1 drugs, you wouldn't have had the regulatory or the legal ability to go out there and create a different version of the drug at a much cheaper price, and we probably wouldn't be here today where you have essentially forced the hand of the large healthcare companies to offer that drug at a lower price. And it makes me think, are regulatory restrictions perhaps too stringent? Is it maybe a problem that the only reason that you were even allowed to pursue this model is because there was some issue in the supply chain of the GLP1 industry itself?
- [34:34]
Andrew Dudum
I think a lot of people are thinking that. I mean, I think the new peptides conversation that's taking place is another version of this conversation. Right? There's a push to deregulate what the administration qualifies as supplements. Right? BPC 157, TB 500, Epitalin. All of these, all of these peptides during the Biden administration were moved to a Category 2 list, no longer letting pharmacies manufacture them or compound them. Now there's a meeting in July pushed by RFK to see if those can be then reintroduced into a Category 1 list to allow access to consumers. Now, the traditional industry doesn't want this to happen at all because by doing so you are frankly educating consumers that peptides, which are just chains of amino acids that are found in the body, can be sourced, produced, safely manufactured and delivered to consumers for, let's say, 50 to $100. Well, the drug industry would love for, for that knowledge not to be known. Because if you can patent those, if you can take those amino acids and throw something on the side of that chain and patent it, well, now you've Got Blockbuster pharma medications at 80 or 90% margins, where the population is is either forced to pay that out of pocket or the insurance companies are forced to cover it. So again, the system is set up to make a ton of money. And so I do think there's a real conversation that should happen around consumer empowerment in healthcare. And that doesn't undermine, I think, the importance of the FDA's oversight in making sure things are safe and things are manufactured right from the right facilities with the right regulatory frameworks, and that the risks of those are mitigated. But there also has to be an opportunity for consumers to have empowerment and get access and ultimately have more choice. So there's no question that the FDA and the regulatory oversight to make sure medicines are safe is required and needs to be respected. Yet at the same time, consumers have to be able to have empowerment to work with their provider and work with their doctor and explore what's right for them. And that could be adjustments to dosing, that could be combination therapies or that could be exploring things like Peptides. And so I think we as a business sit at a really interesting intersection because I think we can lead by both empowering customers to have access to this level of innovation, but establishing what doing it the right way means. And to me, Peptides as an example, what doing it right means is always doing it hand in hand with the provider. So making sure the clinical oversight is there, the understanding of you is there, and that a doctor is involved and active in that decision making so that you have informed understanding of your choice. And then second, making sure that the actual supply and manufacturing and sourcing is entirely gold standard. So when you look at, you know, the compounding of weight loss medications in the last couple of years, just like when you look at the compounding of peptides right now, almost all of it is coming from unregulated, imported sources overseas. And people say, oh, it's made in America. Compound in America. It's not right. We know the same five facilities that manufacture all of this stuff. And so there is a real gray market and there's a black market for these therapies that is dangerous. There is lack of understanding of the purity and the exposure. And when you're talking about sterile pharmacies, people are injecting these things. The oversight of these facilities from an FDA standpoint needs to be very high. And so I do think as we enter this world where there's more consumer empowerment, there's more interest in things like BPC157, it will be critical for hims and hers to establish that gold standard of quality, saying, hey, this is actually made in America. The APIs are manufactured here. This is how you do third party testing. This is how you do certificates of authentication so people know exactly what they're getting. And this is how you do doctor and clinical oversight to make sure you're thinking about this the right way. And we're putting a ton of effort into making sure that the approach for all of our categories looks like that. And that doesn't mean it's going to be the cheapest, but I think it's going to be done right. And I think companies are going to need to find that middle ground.
- [39:34]
Ed Elson
We'll be right back.
- [39:46]
Podcast Sponsor/Announcer
Support for the show comes from Engine. The companies winning right now aren't cutting travel, they're booking smarter. Here's the reality. The average business traveler spends 45 minutes booking a single trip on a legacy platform. With Enjin, that booking time drops to as little as 2 1/2 minutes. And its AI powered personalization gets faster the more you use it. Multiply that across your team every trip, every year. That's not a perk. That's a competitive advantage. Last year, Enjin customers saved more than $300 million on travel. Because the platform negotiates rates no one else can get. Exclusive deals you won't find anywhere else. And with the Engine X card, get up to 10% back on any hotel booking. 33,000 businesses have joined. Now it's your turn. Get $500 when your business signs up and starts traveling. @enjin.com founders nginx visa commercial cards for issued by 5th 3rd Bank NA member FDIC earn up to 10% backing points on eligible Engine travel purchases. Actual reward rates vary by purchase category and may change. Points have no cash value and are redeemable for rewards through our programs. See full rewards terms. For details go to enjin.com x rewards terms.
- [40:59]
Ed Elson
We're back with Andrew Dudum. The peptide conversation, the GLP1 conversation. You're sitting at one of the most interesting fulcrums between how everything should be regulated. I mean, it's such a perfect example of the pros and the cons of regulation on both sides. Because on the one hand, overregulation, the stringent regulation around these drugs has resulted in an ecosystem where a lot of these companies, there are huge barriers to entry. And these companies have essentially established these maybe monopolies, maybe you'd say oligopolies. They have unbelievable pricing power. There is no price transparency. They're ratcheting up these prices to extraordinary degrees and it's having real adverse effects on the actual health of the American people. And it's probably worse in the United States than in any other nation when you just look at the amount of money that we're spending per capita on healthcare costs. And there is a really good argument, as you say, and I think that your story really brings it out in how over regulation that has actually been lobbied for by a lot of these large corporations has led to that outcome. At the same time, though, in a world of healthcare, in an industry where we're talking about the actual biological health of human beings, the idea of being loose with regulation and sort of letting everyone kind of do whatever they want to do is also a very scary game to play because there is a world in which, you know, maybe let's just assume that There was a GLP1 shortage and then you were compounding these drugs and maybe you guys got it wrong. You didn't. And you delivered great medication for a lot of Americans. But if you had messed up in some way, then suddenly that's a moment where you'd say, well, why did we let this guy who's kind of new to the healthcare game get involved in these drugs and sell these things to people? So I guess at a sort of very high level, how do you think about regulation? Like what is the right balance and what should we be pursuing from a policy level, even from a company level, to deliver low cost health care to Americans without making them potentially more sick?
- [43:23]
Andrew Dudum
You know, I think the administration right now is doing a great job pushing the right balance. To be honest, I think the, the government applying pressure to the drug companies to come to the table with regard to government negotiated drug pricing was an incredible step. We're the only country in the world that doesn't do that. Any established country in the world that doesn't do that. Which is why, you know, people could buy WeGovy in Canada and UK and Australia and Japan for 100, 150 for the last few years. And here in the US where there's a massive obesity epidemic, the medications were 10 times that. And so I think it was a great first start for the administration to say, hey, these are important to people and we're going to force change. Nobody wanted to do that. No drug company wanted to do that. And it was only possible because frankly, the President made that happen. I think that's a great, a great start. And I think that should continue. I think that should continue as precedent for the Mass market therapies that are needed by the American people. I don't think there's any reason that the margins of these companies need to be so exorbitant. I believe that pharma needs to get paid back for their innovation. No question. Huge believer in that. And I think the US has benefited from that innovation. But there is a middle ground there. There's a way to also make it accessible to people as well.
- [44:56]
Ed Elson
You guys are one of the leaders, I would say, in GLP1 drugs at this point. I mean, of course it's Novo Nordisk and Eli Lilly who are manufacturing this stuff, but you're getting it out to a lot of people. How, how large Is the GLP1 opportunity? Is it that some people are going to be skinnier and that's kind of how you see it, or does it. I mean, I could just tell you that my co host, Scott Galloway, he thinks that GLP1s are more important than AI.
- [45:28]
Andrew Dudum
I think GLP1s will have more impact in global society over the next five years in AI, no question. And it's not just because, you know, somebody's losing 10 pounds. Right. The, the, the science at this point, the price points of them coming down overseas, they just went generic in Canada this year. They'll, you know, semi glue Tide will go generic in the US in I don't know, four years. Right. It's already, it's, it's already expanding into new form factors with Novo and the Pill, which unlocks a completely different customer audience. The impacts of these are monumental. Dropping general obesity, like for the first time you're actually seeing, you know, like early obesity curves turn. That's going to then have downstream on, on diabetes deaths, all metabolic meta resistance. You're seeing cancer data come out in the last few weeks, which is just tremendous. You're seeing fatty liver and, and kidney. I mean it's just like I think you essentially have a population that is metabolically ill that then results in all of these perverse outcomes, whether it's heart attacks, cancer and the body just going astray, even neurodegenerative diseases. From what we can tell from the science is that when you metabolically fix somebody, all of these other things meaningfully reduce. And so I think it's going to have massive implications for people's health. It's already having massive implications for things like smoking and drug addiction and alcoholism. I mean it's, I would be surprised if, fast forwarding four or five years from now, GLP1s were not a part of north of 50 to 60% of every American's daily habits. It, whether that's through a vitamin, that they're taking a compounded vitamin orally or through a weekly combination injection that also helps them manage their hormones or cardiovascular risks. But I think it's going to be a staple in the global healthcare society, no question.
- [47:42]
Ed Elson
Do you think that big pharma and large healthcare companies are concerned about this? I mean, if we have a drug that sort of systemically resolves many of the root causes of all of these symptoms, obesity leads to all sorts of things. I mean, if we see cancer rates going down, smoking cessation, alcoholism going down, all of these things that, I mean, in a dark way, large healthcare companies, healthcare insurance companies, big pharma companies benefit from because they're making money solving those problems. Do you think those companies are worried about what this could do?
- [48:20]
Andrew Dudum
I think there's no question. And you see it this year with the, the GLP1 pressure on pricing, that the age of unrestrained pharma margins is gone. It's gone. It might still be there quarter to quarter, but like the, the culture has caught on, government has caught on, everyday people have caught on. And whether or not Hims and Hers is here any longer, players like us expose the reality. Right? And I think hims will continue to do that. Now what I hope will happen is they will adapt. They'll adapt to what consumers want. And I think there's a tremendous opportunity, consumer biotech that I think Hims and hers is at the forefront of and we're able to go, you know, earlier on in the process of actually starting to work with these drug companies and making these therapies, because now there's actually a way to get them to hundreds of thousands, you know, millions of people quickly. But I think what's going to happen is consumer biotech is going to start making medicines that people actually want, not necessarily the things that just keep them treated and sick, but stable. So good example, Eli Lilly has a new medication, early phase trials where single injection a year removes cardiovascular risk. This came out just about a few weeks ago. So you don't have to take a statin every single day. You don't have to take rapatha, which is 500amonth, twice a week. You can take one injection that probably costs about $30, $30 to $50 to make that one injection and it removes your cardiovascular risk. It just drops your LDL to, to like obliterates it. It. Now when that drug comes to market, there's gonna be 10 other versions of it also. And hims is gonna be. And hers is gonna want to get that to as many people as possible. Right. And people are gonna want that because they don't have to be sick any longer. They can actually be proactive. They can. Like, it's like a vaccine for heart disease. Right. If you could take a vaccine for cancer or a vaccine for heart disease, a lot of people would do that immediately. And so I think there's gonna be a new wave of demand for therapies. But I do think, without question, traditional pharma is going to have to adapt very quickly because I think the age of unrestrained margins and just treating illness ongoing is gone. I think a big part of this is also just like the gene therapy dynamic, the gene editing capabilities actually allows you probably five years from now to fix issues instead of just treat the symptoms of the issue. And that is another reason in which I think the whole economic framework is going to have to be changed.
- [51:04]
Ed Elson
Obviously, you guys are offering way more affordable pricing, as exemplified in the story you told about your compounded semaglutide drug. And you're sacrificing larger margins, essentially. What's stopping you from eventually becoming like the rest of Big Pharma and the rest of healthcare, where you adopt these unrestrained margins? I mean, ultimately you have to return value to your shareholders. I mean, why should people trust that you will not do that at some point?
- [51:37]
Andrew Dudum
Yeah, I think it's just, we'll walk the walk, period. Right. I fundamentally believe that you can build with this company. And this is really rare, I think something that helps the entire world and is a great business. And that's because when you look at the reasons people are sick and you look at the reasons people are dying and the reasons they're. They're depressed or like these, it's. It's an. A lot of it is an access problem in many ways. This is not a scientific problem. Right. You have to leave your house and take off work and get a babysitter to drive to then wait in line at the doctors to then talk to a doctor who's super tired and barely paying attention to you, who's spending four hours a day writing notes to get like bottom of the barrel service. Right. You're not even getting proactive. You're just treating the thing that's most urgent. That's not a system that is loved and that's a system that's extremely costly. And so what you've seen hims and hers do in the last 10 years and you'll see us keep doing it is verticalize each part of the infrastructure that's costly and then give that right back to consumers. So instead of having brick and mortar facilities, we have a telemedicine platform. Instead of having doctors in the office, we've got a digital provider group. Instead of having to pay, you know, EPIC a ton of money for their emr, we build our own. Instead of having to partner with a compounding facility and drug manufacturing that's going to have huge margins, we're just going to invest hundreds of millions of dollars and build our own facilities so that these treatments can be 50 bucks. So I think you're going to see us just continue to invest in a better experience, a more efficient experience. And ultimately that's because I think the only reason we're building this thing is because we actually think that's possible. Right? We think it is possible that people could have a world class state of health and be empowered to feel awesome. And it only costs maybe 50 to 100 bucks a month. That's what I really think is possible. You think about Netflix, you're playing 15 bucks a month for some movies, you should be able to pay 100 bucks a month. And you are getting preventative, screening the medicines you need to feel great and a doctor watching over you, making sure you're on the right track. I really believe that's possible.
- [54:11]
Ed Elson
When you look at the healthcare industry, I think a lot of people listening to this podcast, a lot of people in this country are just fed up with how the whole system works. And every time we try to dig into this industry, oftentimes the answers that I get are it's super complex and there are all these different players and it's hard to know who is the problem or what the problem is actually stemming from. I mean, there's the pharmacy benefit managers and there's the insurance companies and there's the actual pharmaceutical companies themselves. As someone who's in it, who's the problem in your mind? Where is the problem coming from?
- [54:55]
Andrew Dudum
All of it. The ways in which the money flows is messy and deeply entrenched where everybody is the problem. Like there is no single issue. You can't point a finger and say it's the PBMs. No, it's, it's, it's everybody. And it's, and it's obvious because at the end of the day, they'll all lobby against a system that breaks the system, if that makes sense. Like they'll, they'll fight each other internally to try to make five bucks here and there, 5% more within the system. But if somebody attempts to break the system, all of them are on the same team and say, hey, we're going to shut that down. And I think that exposes very clearly what's going on. And so we chose very early to frankly, not really try to integrate into the existing system. And that's why we built our own provider group, we built our own pharmacies, we have our own drug sourcing. We buy directly from raw ingredients or we actually in the peptide side, buy our own manufacturing to make our own raw ingredients in the US because we don't believe we can buy them anywhere else. High quality. So I think, I think the system itself has been established for so long and so entrenched, it will be impossible to iterate its way to a great outcome. I think what will force a great outcome is a new system that delivers for consumers, that shows that it can be priced affordably, that shows it can deliver great care and on demand care and price transparent care and proactive care and things people actually love. And then as a result, the legacy system will be forced to change.
- [56:46]
Ed Elson
My final question, I think Hims and hers is a really good case study in entrepreneurship because you guys have entered into a system or broken into an industry which from the outset desperately did not want you to exist. And we've heard multiple stories in this podcast as to how that has played out and as to how you have overcome that. And I think that that is really the story of starting a company in a lot of different industries. Usually if you're the new entrant on the scene, the incumbents do not want you to succeed. So my final question to you, what would be your advice based on your experience starting this company, to founders, entrepreneurs, people who are starting up in their careers who are trying to break into a system, a system which does not want them to win.
- [57:36]
Andrew Dudum
One of my old co founders, he used to say this, and I think maybe Peter Thiel used to tell him, I don't remember the exact source, but it was something like, don't underestimate toys that can become big companies. And you know, you think of something like Snapchat, right? It was written off. It's like a disappearing photo. It's a feature, right? It's a toy or Facebook, right? It's a way to see other, you know, men or women on your college campus, you single. It's a joy. It's a joke. It's silly, right? If we had launched 10 years ago and talked about today or back Then what we talked about today, the ambition to disrupt the healthcare system, it would have been impossible. And the ambition hasn't changed. It's been consistent the whole time. But I think our approach was, what's the wedge? What's the toy? What's the thing that keeps the existing system unaware of what we're doing, Completely naive to it. And for many years, the healthcare system laughed at hims and hers. Right? Like, I'd go to JP Morgan healthcare conference and people are like, why are you even here? Right? Don't you guys just like, aren't you guys like the cactus? Like you said, you guys like cactus advertisements in New York? That's not healthcare, that's Viagra. And now I think the conversation has really changed. And so I think, you know, I would push founders to identify the consumer truth that is deeply misunderstood in the legacy system and start there and don't be too greedy about and don't have a big ego about like needing to say how you're going to go disrupt this whole system. You know, I think founders often like to do that. That doesn't matter. Like what matters. Like understand the consumer truth that the system is missing, figure out the purest implementation to prove that and go after that. And if you can figure that out, if you can unlock the consumer love because you've actually understood them better than anybody else, just keep growing from there. Slowly keep growing from there. And it's to your advantage that the legacy system thinks you're a toy and thinks you're a joke and doesn't pay attention to you. And eventually they'll start attacking you. They'll make fun of you and then you'll go through the phase, they'll go through the phases of grief and then they'll fight you and then you're actually onto something. But in the early days, like, just find that consumer insight.
- [60:08]
Ed Elson
Andrew Dudam is the co founder and CEO of HIMS and hers. Andrew, really appreciate your time. Thank you.
- [60:14]
Andrew Dudum
Thanks for having me, Ed.
- [60:19]
Ed Elson
This episode was produced by Alison Weiss and engineered by Benjamin Spencer. Our research associates are Dan Shalon and Kristen o' Donoghue and our senior producer is Claire Miller. Thank you for listening to the Proft Market's founder series. We'll see you next month with another founder story.
- [60:45]
Podcast Sponsor/Announcer
Support for the show comes from Engine. Here's the reality. The average business traveler spends 45 minutes booking a single trip on a legacy platform. But the companies winning right now aren't cutting travel. They're booking smarter. With Enjin, that booking time drops to as little as 2 1/2 minutes. And its AI powered personalization gets faster the more you use it. Multiply that across your team every trip, every year. That's not a perk. That's a competitive advantage. 37,000 businesses have joined Engine. Now it's your turn. Get $500 when your business signs up and starts traveling. @engine.com founders.