Be thankful you don’t have lipodystrophy. It’s a condition in which the body cannot control production of fat tissue. It can cause energy control problems and diabetes, and even worse, the drug that can control it, Myalept, is a bit expensive. List price for Myalept: $71,306 a month.
Fortunately, there’s a website for that and for all the other prescription meds that have consumers clamoring against drug companies. Varying in business models from simple home delivery to cut-rate pricing to proprietary product, ePharmacy companies are starting to gain attention from venture capitalists (VCs) as well as consumers. In the balance hangs a $40 billion global opportunity.
The most significant business model for ePharma companies like Blink Health, Ro and GoodRx has been in trying to reduce prices. The federal government has been delayed in its passage of a bill that would require drug makers to pay back Medicare for price hikes that outpace inflation. Outside of that, little regulatory help is on the way. The non-partisan Kaiser Family Foundation recently found that among those currently taking prescription drugs, one-fourth of adults (24 percent) and seniors (23 percent) say they can’t afford their prescriptions. Three in 10 of all adults (29 percent) report “not taking their medicines as prescribed at some point in the past year because of the cost and one in 10 (8 percent) say their condition got worse as a result of not taking their prescription as recommended.”
Blink Health CEO Geoffrey Chaiken says the ePharmacy model needs to succeed where government can’t.
“At Blink, we’re not going to wait for the government to solve this problem,” he said in an interview with the Observer. “We believe it can be solved much more quickly through technology and innovative business models. Already, we’ve been able to impact prices, with 4,000 medications priced under $10 using Blink. And we’ve demonstrated the ability to continue to lower prices through new services like home delivery and our tele-health offering, which allows patients to go online and complete a doctor’s visit, at some of the lowest prices in the industry.”
The ePharmacy company that gets the most attention from VCs and analysts these days is Ro. With its brands Zero (nicotine addiction), Roman (men’s health and erectile dysfunction) and Rory (women’s health) it has taken more than $160 million in funding off the table over the last year. It is leveraging its influencers, experts and content to woo consumers. Last week Ro launched a new health site called Health Guide. The company said the new service is designed to compete with the likes of WebMD and Google searches.
“We created Health Guide to fulfill one of Roman’s guiding principles: to meet patients at eye level,” the Roman Health Guide team wrote on its welcome announcement. “We know the internet is already bursting with health-related content. But we also know that this material isn’t always complete, easy to understand, trustworthy, or fun to read. So we decided to do it better.”
Patients are comfortable with internet research on health conditions. An October survey released by ResMed found that six out of 10 consumers use the internet to try to diagnose themselves. An Aetna survey found 43 percent of respondents said they would investigate their condition online and then see a practitioner.
The ePharma space will not be limited to pure plays or the biggest retailers like CVS. Locai Solutions and L&R Distributors recently announced a partnership in which they provide “endless aisles” to help small and medium-sized businesses (SMBs) compete on the ePharm space. It will also set smaller retailers up for fulfillment and home delivery.
The pilot for the program will be launched with Denver-based Hi-School Pharmacy. “Launching Hi-School as our first deployment of this technology showcases the solution we’re bringing to the current challenges faced by physical retail,” said Mike Demko, CEO and Founder of Locai Solutions. “They are an extremely customer focused brand and by offering an expanded assortment without the burden of inventory they can bring increased value to their consumers.”