Amazon launches fixed pricing for treatment of conditions such as hair loss. Hims & Hers stock drops 24%

Amazon on Thursday announced Prime members can access new fixed pricing for treatment of conditions like erectile dysfunction and men's hair loss, its latest effort to compete with other direct-to-consumer marketplaces such as Hims & Hers Health and Ro.

Shares of Hims & Hers closed down more than 24% on Thursday, the company's worst day on record.

Amazon said in a blog post that Prime members can see the cost of a telehealth visit and their desired treatment before they decide to proceed with care for five common issues. Patients can access treatment for anti-aging skin care starting at $10 a month; motion sickness for $2 per use; erectile dysfunction at $19 a month; eyelash growth at $43 a month, and men's hair loss for $16 a month by using Amazon's savings benefit Prime Rx at checkout.

Amazon acquired primary care provider One Medical for roughly $3.9 billion in July 2022, and Thursday's announcement builds on its existing pay-per-visit telehealth offering. Video visits through the service cost $49, and messaging visits cost $29 where available. Users can get treatment for more than 30 common conditions, including sinus infection and pink eye.

Medications filled through Amazon Pharmacy are eligible for discounted pricing and will be delivered to patients' doors in standard Amazon packaging. Prime members will pay for the consultation and medication, but there are no additional fees, the blog post said.

Analysts at Bank of America downgraded shares of Hims & Hers from buy to underperform on Thursday, citing Amazon's push into hair loss and erectile dysfunction markets. The analysts said Hims & Hers generates more than 80% gross margins from its core erectile dysfunction and hair loss offerings, and estimate that Amazon's medications for those conditions are about 42% and 29% cheaper respectively.

As a result, the analysts said they think Amazon will limit the prices that Hims & Hers can charge and will hinder the company's ability to attract new customers.

"While Amazon may not offer the same personalized products, its wide net (we estimate 150MM Americans have Prime) creates a serious competitive threat for HIMS, in our view," they wrote in a Thursday note.

Amazon has been trying to break into the lucrative health-care sector for years. The company launched its own online pharmacy in 2020 following its acquisition of PillPack in 2018. Amazon introduced, and later shuttered, a telehealth service called Amazon Care, as well as a line of health and wellness devices.

The company has also discontinued a secretive effort to develop an at-home fertility tracker, CNBC reported Wednesday.

— CNBC's Annie Palmer contributed to this report.