FTC sues Hims & Hers over health data sharing and billing practices

Hims & Hers shares fell about 12% on Wednesday after the Federal Trade Commission filed a federal lawsuit accusing the telehealth company of disclosing sensitive consumer health information to Meta and Snap for targeted advertising without proper consent and of using deceptive subscription billing and cancellation practices. The case, brought with the states of Utah and California, alleges customers were charged for prescriptions almost immediately after completing online intake forms and then faced hurdles canceling recurring plans. Hims & Hers, which reported 2.6 million subscribers in its first-quarter results, up 9% year over year, has been under scrutiny as a major player in the market for compounded GLP-1 weight-loss medications and for its broader telehealth marketing and prescribing practices. The FTC is seeking monetary relief and a permanent injunction, raising the prospect of changes to Hims & Hers' advertising and customer acquisition practices. Responding to the suit, Hims & Hers said the agency ignored substantial evidence gathered during a nearly three-year investigation, disregarded state telehealth laws and industry standards, and was trying to generate headlines at the company's expense. The company said it would vigorously defend itself and maintained that its privacy policy gives customers choices over data use while patient information shared with healthcare providers is used only to provide care. The outcome could become one of the most significant consumer-protection cases in telehealth, with implications for online healthcare companies' intake forms, recurring billing, cancellation design and use of advertising technology. Hims & Hers' next earnings report is scheduled for Aug. 10.