Digital health company Hims & Hers building in-house pharmacy fulfillment center in Ohio

Direct-to-consumer digital health company Hims & Hers—reportedly valued at $1 billion—plans to build its first in-house pharmacy fulfillment center in Columbus, Ohio, next year.

The company plans to invest $1.5 million to build a fully licensed mail-order pharmacy, fulfillment center and customer support center. The 300,000- to 400,000-square-foot location will create 500 jobs and will help speed order fulfillment, company executives stated in a blog post. It will also help reduce the chances of service disruption as the company won't solely depend on third-party pharmacies.

The company, which combines telehealth and medication delivery, is currently in the process of finding a permanent location, with plans to put its investment toward machinery and equipment. The pharmacy center will enable the company to bring order fulfillment in-house for both pharmaceutical and non-pharmaceutical products.

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“At Hims, we want to make it easier for everyone to get the care they need,” Andrew Dudum, CEO and founder of Hims, said in a statement. “The Columbus Region provides direct access to our customers throughout the U.S.—including those in rural areas who may live an hour or more from an open pharmacy—as well as an impressive pool of talent. We’re excited to invest in the area as we work to expand access to affordable, quality healthcare for everybody.”

The company plans to begin hiring for picking and packing, supervisors, pharmacy technicians, customer service and leadership positions in the second quarter of 2020.

Hims will continue to work with its existing third-party pharmacy partners, company executives said.

San Francisco-based Hims launched in November 2017 as a men's wellness brand offering skincare and hair-loss products and erectile dysfunction medication. It has since added a women’s health business with a new line of products called Hers including birth control and skin and hair care products. The company has grown rapidly as it provides inexpensive, discreet over-the-counter and prescription medications for traditionally "embarrassing" conditions.

The company has raised more than $200 million to date with investors including Institutional Venture Partners and Forerunner Ventures. Its main competitors include other direct-to-consumer pharmacy startups like Nurx, GoodRx and Ro.

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Hims Chief Operating Officer Melissa Baird told Forbes the company has delivered almost 1 million products. In July, the company named its first chief medical officer, former Walgreens executive Pat Carroll, signaling that the company likely has ambitions in healthcare beyond e-commerce.

Carroll wrote in a blog post that he believes the company has the potential to "change the game" in healthcare by addressing issues with quality and accessibility. "Right now, we’re offering care in the areas people have the hardest time talking about with others, even their doctors. But looking forward, we’ll add more categories of care, so we can keep expanding access and empowering more people to take charge of more areas of their health," Carroll said.

Hims executives said the company sets a high bar for drug safety protocols, which will apply to the new brick-and-mortar pharmacy as well. The pharmacy will comply with stringent U.S. licensing requirements and regulations governing how and where medications can be sourced. This includes independent evaluations to test and validate dispensed medications.

In its most recent quarterly testing, in which an FDA-inspected, analytical testing lab ran blind tests on medications dispensed by Hims' partner pharmacies, the portfolio of products submitted for testing passed FDA specifications for quality and potency, the company said.