Courtesy Truepill
- Meet Truepill, the pharmacy startup that’s been quietly powering companies that prescribe and ship Viagra and birth control to your door.
- The startup, which describes itself as a "pharmacy API and fulfillment service," works with companies like Hims, Nurx, and Lemonaid by filling prescriptions and sending them out around the US.
- With $14 million in funding from investors led by Alexis Ohanian’s Initialized Capital, Truepill is plotting its international expansion.
Seemingly overnight, a crop of companies have sprung up that can prescribe and mail you medications like birth control and Viagra.
Each company has its own brand, its own website, and contracted doctors. But for many — including Lemonaid, dermatology company YoDerm, Kick Health, Hims, and Nurx — there’s a common thread: their online pharmacies are all powered by the same little-known company, called Truepill.
Founded by pharmacist Umar Afridi and Sid Viswanathan, Truepill has quietly been gathering up pharmacy licenses across the US and amassing clients who themselves have racked up hundreds of millions in funding. Since getting its start in 2016, Truepill’s filled 1 million prescriptions.
Last year, Truepill raised $14 million from investors led by Alexis Ohanian’s Initialized Capital. On Tuesday, the company is formally announcing the funding, and says it’ll use the money to expand internationally, with plans to add facilities in New York, the UK, Australia, and Canada, in addition to its center in San Mateo, California.
Afridi, Truepill’s CEO, spent a decade working in retail pharmacies. Along the way, he started keeping track of some of the inefficiencies he saw as he filled prescriptions. He’d run into instances where he’d have to use a fax machine to get a prescription from a particular doctor, and it was difficult to get that doctor on the phone to check and see if patients could use a lower-cost alternative.
The experience got Afridi interested in figuring out if he could build an on-demand pharmacy. Eventually, the idea led him to start working on Truepill with Viswanathan, who serves as the company’s president. While still doing shifts at CVS, Afridi was studying to become licensed in states across the US and started filling his first prescriptions in October 2016, shipping to homes in California for startups like Nurx and YoDerm.
Courtesy Truepill
Then in 2017, Afridi and Viswanathan joined the summer class of Y Combinator. Eventually, Afridi became licensed in more states and Truepill added more customers. The pharmacy is now licensed in 50 states.
A new kind of pharmacy
Viswanathan and Afridi don’t consider Truepill an online pharmacy like PillPack, which was acquired by Amazon last year. Instead, they’ve coined the term "pharmacy API and fulfillment service." Truepill isn’t trying to directly compete against retail pharmacies or other online pharmacies. Instead, it’s the layer behind the scenes powering startups that are going that direct-to-consumer route by treating particular health conditions.
A company that uses Truepill can connect its website or app directly to Truepill’s service. That way, when a patient gets prescribed a medication like generic Viagra through the company’s platform, the prescription gets sent over to Truepill. When a prescription comes in, Truepill fulfills it and ships it out that same day, Viswanathan said. The company can choose the speed of delivery based on how much it’s willing to spend on shipping.
That company — which is charging the patient directly through its own site — pays Truepill for the cost of the prescription, the shipping, and then a service fee that’s negotiated on top of that.
For startups looking to go directly to consumers by offering online doctor’s visits and prescriptions that get sent to your door, Truepill isn’t the only pharmacy option. Some startups have opted to build their own pharmacies, while others work with pharmacies similar to Truepill that have licenses to ship medication over the US.
The plan for Truepill’s API and fulfillment service is to be as indispensable as Amazon Web Services is to companies. Because Truepill’s just focused on the pharmacy piece, the idea is that it might be able to get better rates for drugs based on volume and better shipping costs.
Courtesy Truepill
The changing way Americans get prescriptions
The healthcare industry as a whole has been jockeying to stay competitive as companies realize that patients, used to the consumer experience they’re getting from Amazon and Netflix, have higher expectations for their doctor’s visit.
That’s been a driving force behind mega-deals like Amazon’s acquisition of PillPack and CVS Health’s merger with Aetna. On-demand, convenient healthcare options like urgent care and free-standing emergency rooms have gained in popularity too, as have same day pharmacy delivery services like Capsule and Alto.
Mailing out prescriptions isn’t a particularly new phenomenon. Pharmacy benefit managers such as CVS Caremark and Cigna-owned Express Scripts have been shipping medication to patients for years as an alternative to monthly visits to a pharmacy.
For now, Truepill is focused on pharmacy fulfillment for startups like Hims or Nurx that are going directly to consumers. Eventually, Afridi said, the plan is to go into other lines of business as well, potentially working with PBMs to serve as their online, mail-order service or by tapping into the $140 billion specialty pharmacy market.
Viswanathan said the conversations with PBMs have been surprising to both the incumbents and the Truepill team.
"It’s shocking to think about this, but something as trivial as being able to provide a shipping-tracking URL is something breakthrough in the space," Viswanathan told Business Insider.
They’re not the only piece of the pharma supply chain to be surprised by Truepill’s model. Afridi said he provided a wholesaler an estimate of what volume of medication Truepill expected to dispense. But when Truepill hit that estimate, the wholesaler stopped supplying the pharmacy, convinced that Truepill couldn’t have possibly have filled that many prescriptions.
"We tend to very quickly outpace the volume of what our stage of pharmacy can do," Viswanathan said.
Truepill now works directly with drugmakers as well as the wholesaler to get its medications. Because Truepill’s working with clients that are focused in specific disease areas, the pharmacy’s volumes for drugs like generic Viagra or birth control can be much higher than a typical pharmacy would dispense.
As more and more prescriptions go online via a direct-to-consumer delivery model, Viswanathan said he’s excited to be powering that with Truepill.
"There are so many things that can and will happen in telemedicine," Viswanathan said.
- Read more:
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Source: Business Insider – lramsey@businessinsider.com (Lydia Ramsey)