If you can use technology meaningfully lower the cost of care to people. So, any zip code you're in in the country, any zip code you are in the world, pick up your phone, click a button as if you're sitting in a waiting room at Stanford and you're getting all of these perspectives from the best clinical care on your device. That to me is the ultimate goal. Right? Because you're standardizing a level of care that today is nearly impossible to get access to. And that includes, I think, what we're talking about more proactive understanding of your baseline health, so genetic testing, more personalized treatments, combination of therapies, combinations of Western medicine, Eastern medicine together for whatever the patient feels is appropriate. And then a care team that's actually responsible quarterbacking your health so that you don't have to have that burden every single day, every morning.
Okay, so you're leaning in super heavily into AI.
How is that going to change the dynamic either from a drug perspective or just from the consumer side?
It's transformative. So, on the consumer side if you start a medicine today because you're at risk of heart disease 12 months later, only 10 or 15% of these patients are still taking that medicine. So, number one killer in the country for dads, heart attacks. Even though entirely preventable and it takes us or costs us maybe two to three cents to manufacture and compound medicine that can prevent heart attacks. If you can have a coach, an AI coach, be with you, hand-holding you, checking in on you, reminding you to take the medicine. You're having side effects, great, let's adjust your dose. Let me talk to your provider and tweak the medicine for you. The adherence can double or triple. And so, the outcomes of people actually sticking on medicine is one of the biggest ways in which you can massively extend life expectancy in this country. So many of the things people are dying from are not actually clinically, scientifically challenging. The bridge, the issue is actually just access, price, and accountability.
So, how far are you away from that?
I think we're very close.
What does that look like?
I think it looks like you picking up your phone, clicking a button, and having an AI coach right there who knows everything about you, knows your goals, knows all of the data that's coming in.
But, are you telling it I didn't take my medicine today, or is it notifying me in the morning, and quizzing me? How's it know what I'm doing or not doing?
There's a lot of ways. You can have scales at home. You can have at-home blood testing shipped to your door. We acquired an at-home blood testing company last year. You click a button, a little tube of blood comes out, and you ship it back to our lab. Costs something like $30. You can have wearable devices that are tracking your sleep and your glucose, right? You can have a Dexcom, a CGM. And so, you can even have, you know, we've talked about the bottle that you open every morning can have Bluetooth enabled to the device. So, you're actually being held accountable to say, 'Yeah, I took that medicine. I opened that bottle, and I closed it.' And all of that is getting documented back into a global ecosystem where you have...
How far are we away from that, though?
I don't think you're that far. I think you're 12 months away. I really do.
And is that something that you are pioneering yourself? You're working on bottles as we speak?
We are trying to figure out how you get those bottles connected to device. We just launched the Dexa scan where you can have a scale at home connects directly into your weight loss program. We're partnering with all of these device platforms. And eventually, I think these devices, you know, the Aura, the Whoop, the scales, the sleep, if I fast forward 5 years from now, these devices can be manufactured for $10 overseas without subscription requirements, just device, $10. So, if you can have these devices proliferate to the masses, and let people choose their preference of device, the preference of color, and it's built into a core Hims & Hers membership. All of that data comes back into a global ecosystem where you have an AI caretaker overseeing the whole thing. You have a doctor that can be pulled in as needed. You have a pharmacist downstream that can actually compound and make a personalized treatment for you that has the hair, the heart disease, the metabolic supplements that you're on so that everything is actually tailor-made to you.
All through your company though. So the other thing is this sort of patchwork system that we've had thus far. Does that work in the future?
No, it does not. I think right now what's happening is the consumer is taking an active participating role in their health, which has never happened. Right, the health care system has always been incredibly paternalistic. You walk in, they give you something and you have no choice. Now with Hims and Hers, you have price transparency, you have choice, you can have a conversation, and you can choose what is right for you. And this is across anything from some of the more cutting-edge things like peptides all the way to more standardized medicine. But bringing that together is going to be necessary because ultimately a care team looking after you, a concierge medicine experience that's looking after everybody in the world requires a holistic 360-degree understanding of all of your data sources, all of your habits, your goals, your lifestyle, your sleep, etc.
Okay, and then the question is will people pay a premium for that? Because on one end we're trying to reduce the cost of all of these things. On the other end, you're creating all sorts of new combinations of therapies where there's a higher cost.
I think ultimately the cost is going to come down dramatically. If you look at the GLP-1s as an example, you know, we brought those to market at $150, $200 price points per month. At the time, the drug companies were offering those at $1,500 per month. Immense amount of consumer pressure amongst a lot of people resulted now in an environment where you have branded pills, you have vials, you have quick pens all priced at $150 a month. And so that came down almost 80-90% in just 12 months. One of the blockbuster therapeutics of the century. And so I think as consumers get more involved in healthcare, they start demanding access.
What was the lesson of that? Because you were compounding.
By the way, there's a big debate about compounding. You effectively moved away from compounding because you had to. But you would probably turn around and say, well, it kind of worked in terms of forcing the price down and creating some of these relationships that you now have.
Yeah. Yeah, I mean ultimately, we will always apply pressure to the system if we believe it's best for the consumer. And when we were compounding the GLP-1s, there was no affordable access to these therapeutics. There was no personalization available. And these have some of the highest side effect rates of any medication, right? Patients, I think it was 70% of patients after 30 or 90 days were not on the medication any longer. And these are chronic therapies. You should be on these for a very long time. So without personalization, without access to affordable prices, without form factor differences, injections, oral pills, you didn't have a consumer offering for patients that actually served them. And so that is where compounding actually really does serve an important part of the healthcare system. Now, what that did in the ecosystem is it showed consumers and the drug companies these medications can be brought to consumers at a price that everyone can afford. And that awareness and that transparency has resulted in I think an incredible shift where the drug companies have now brought new form factors, new personalization options, and new price points.
So, you are king for the day. You can do it however you want. If I told you you were going to meaningfully both bring down the costs of healthcare and hopefully have more efficacious outcomes. You would do what?
I would provide every American citizen a HSA FSA type budget of cash that they can then use on service providers to tackle their health. That would then create a marketplace dynamic where players like Hims & Hers and everybody else would have to compete. They'd have to compete for the best NPS consumer experience, the most affordable pricing, the best outcomes, the best brand, the ultimately what makes people healthy. Right now when you look at health care if somebody is getting sicker or healthier, doesn't matter when it comes to their financial output. Right? They have to pay regardless. If you could align people feeling better and getting healthier with their dollars going in that direction, you will then create an environment where the marketplace is forced to compete just like in every other industry. And I think creating that structure would ultimately enable great companies to emerge, great offerings to emerge, and customers get that benefit.
You announced on your quarterly call last week that you were moving away from certain AI agentic vendors. What kind of signal were you trying to send to the marketplace? And what does that mean?
You know, the team has been building around platforms like Sierra for the last year, right? Incredible leading technologies that help customer care coaches and support interact with consumers. We hired Mo El Shenawy who ran AI autonomous at Cruise for many years. We think when you're building an ecosystem that's specific to clinical care, when you're actually interacting with doctors prescribing and nurses and pharmacists, building it in-house is critical. And we've seen that. We've launched our first version of this in the last couple of months. And overnight, the amount of care tasks it's handling, the amount of operational tasks handling, far surpasses players like Sierra and others.
Okay, so what does that say about either Sierra, is it that these identical systems are too expensive, they don't work as well, the cost of creating your own is coming down to a point where now it makes sense? I mean, what does this say even beyond...
I think that what it says is that the core foundational models, independent of a closed-loop data set, are not that valuable. That's my honest opinion. So, when you have a healthcare system...
The closed-loop data that you have within a healthcare system like Hims & Hers, that is the asset. Because you can train these models to understand what patients like Andrew have had success in the past. All right, Andrew's tried these four medicines, and ultimately this is the one that worked. Well, now let's reverse engineer that and see if we can take that learning and apply it somewhere else. Basic models that are supporting customer support or basic models supporting financial analysts or whatever they are, they can only go so far. And so, I think the real asset with Hims & Hers, the real opportunity, is actually the fact that we consult you, we diagnose, we help treat, we then follow up and make sure you're doing well, the whole thing.
What does that mean, again, beyond Hims & Hers?
Long-term companies that have their own data sets, go and use open-weight models or other models to develop their own thing. But is it that you think that's across the board?
I think for companies that have the resources and scale, if they have an independent data set, that is the path that they will go. No question. The cost can be upwards of 70-80% less, but more importantly, the actual use cases of what you're building, and the ability for the model to self-learn dynamically...
