GoodRx Takes on Amazon RxPass by Building Consumer Discount Prescription Destination

As it moves to shed issues related to a key customer loss in 2022 — believed to be Kroger — GoodRx got busy late last year, adding partnerships, integrating technologies, and taking steps to avoid a repeat of what is cryptically referred to as “the grocer issue.”

GoodRx Co-CEO Doug Hirsch talked up how acquisitions have been integrated into its core prescription discount business during the Q4 2022 earnings call Tuesday (Feb. 28), pointing to the technology acquired from RxNxT and its role in the Express Scripts Price Assure deal announced last year.

“Today, eligible Express Scripts members are automatically able to receive GoodRx discount prices as part of their pharmacy benefit,” he said. “It’s built right into their card with no action required on the consumer’s part. Through Express Scripts we’re excited to work with Cigna, which has made this program available to all participating Cigna Health Plans, encompassing over 10 million lives.”

Citing GoodRx research finding that 70% of consumers are unaware that prescription prices can vary widely depending on the source, Hirsch said this “this program opens up a huge new segment of the prescription savings TAM for us,” and will be offered to other health plans.

See also: GoodRx Turns to Data to Rebuild Customer Base

While still referring to “the grocer issue” of 2022 that hurt prescription volumes saying, “we haven’t yet recouped the volume loss resulting from that event,” Hirsch added that “we’ve expanded our core retail network. We recently added Sam’s Club and their 560 retail pharmacy locations to our network of pharmacies that accept GoodRx discounts.”

As was first mentioned in Q3, GoodRx is now “taking a hybrid approach to our pharmacy and retailer constituents where we have complemented our PBM networks contracts with formalized retail relationships to ensure ecosystem stability. As a result of prioritizing increasing engagement, we now have direct contracts with many of our top pharmacy partners.”

In other words, retailers can no longer simply drop the drug discount provider without notice.

What’s Ahead

He then outlined four strategic priorities for 2023, including creating a more direct consumer relationship with consumers, leveraging HCP relationships more, growing its position “as a B2B partner of choice across retailers, PBMs and pharma manufacturers, driving foot traffic for retailers, volume for PBMs, and awareness, access, and adherence for pharma,” and leveraging data and marketing “to reach more consumers and providers and drive higher revenue from our users, be they visitors, MACs [monthly active customers], subscribers or healthcare providers.”

See also: GoodRx Looks to Win Back Customers at Time of Increased Need for Cost Relief

It’s evidence of what PYMNTS’ Karen Webster dubbed “the refill economy” in a recent column, saying, “Brands will incent consumers to use this new way to buy and pay by offering discounts based on frequency of refill, as they do now, in exchange for the predictability of those sales over a long period of time. The data related to consumption patterns and usage will help brands expand into adjacent areas, bundle related products, and manage their supply chains and delivery costs more effectively.”

In terms of growing its customer base, Hirsch said, “while we separately disclose MACs in subscription counts, we view our users as arrayed along a spectrum of opportunity for us. Subscribers have the deepest relationships with us, engaged consumers have growing relationships, and MACs who have not yet fully registered, as well as visitors, create opportunities for strong future relationships.”

Co-CEO Trevor Bezdek said, “With our retail network continuing to strengthen and expand, our hybrid strategy has helped to offset the churn we have seen at the grocer,” as he said the company “doubled the proportion of prescription transactions by fully registered members between the start of the third quarter and the end of the fourth quarter.”

Bezdek added that “within our subscriptions platform, we successfully launched initiatives to help ensure gold members consistently receive even better pricing relative to our core prescription transactions offerings than in the past.” He noted that the gold membership fee increase in the first half of 2022 “more than offset the churn-related decline in paid memberships.”