The big drugstore chains such as Walgreens Co. and CVS Health and even Amazon.com Inc. are turning their advanced e-commerce systems into digital healthcare malls that give shoppers more access to services such as online doctor visits and even buying health insurance. Their aim is making their best customers their most loyal ones as well. For example, Walgreens is now offering telehealth at one of its stores in Manhattan, with plans to add more.
CVS Health also is pursuing a similar one-stop shopping approach for digital healthcare delivery services. But unlike Walgreens, Amazon and other current competitors, CVS is in the midst of acquiring Aetna to offer consumers a combination of health, wellness and insurance services online or through the CVS drugstore network of 9,700 stores.
But sheer size and loyal customers alone might not be the only way to carve out market share in the emerging digital drugstore market. Several well-funded online drugstores such as Capsule and PillPack are banking on e-commerce and better pharmacy management technology, in combination with fast delivery, to carve out a niche.
In New York, digital pharmacy startup Capsule is attempting to build a lasting e-commerce business. Capsule won’t disclose details about its first years in business, including web sales, prescription orders or how many doctors the online pharmacy is working with. But in New York, a state with 4,300 licensed pharmacists located in independent pharmacies, hospitals, clinics, chain drugstores, discount and warehouse retail outlets and grocery stores, Capsule promises customers it will deliver prescriptions in about two hours for free to customers living in Manhattan and the other boroughs. “60 minutes is the typical time a lot of New Yorkers wait to have a prescription filled,” says Capsule CEO Eric Kinariwala.
The company has raised $20 million to expand its online pharmacy business that not only processes and delivers orders quickly, but also builds digital relationships with customers to better track the medicines they are taking, answer questions about the drugs and to work with doctors and hospitals on better medical adherence—a healthcare industry term for the $300 billion worth of problems that arise each year because patients don’t properly take their medication.
In Manchester, New Hampshire, PillPack also is building a digital pharmacy with a niche that helps patients order, reorder, properly take and track multiple prescriptions at once, says founder and CEO T.J. Parker.
Five years ago, Parker, a second-generation pharmacist, launched PillPack, which now operates in 49 states. PillPack’s sales total $100 million and the company has about 40,000 consumers. In September, a ranking by Forbes estimated that PillPack could be valued as a $1 billion company inside of five years.
PillPack claims to make it easier and faster for consumers to get prescriptions filled. PillPack manages multiple prescription medications for customers by pre-sorting, packaging and delivering the drugs—all with a 24/7 pharmacy staff that can be contacted either online or via phone. Every two weeks, customers receive a personalized package of pre-sorted medications, along with a recyclable dispenser and any other medications that cannot be placed into packets, like liquids and inhalers. Each shipment includes a medication label that explains what each pill is and how it should be taken.
In addition to pre-sorting medications, PillPack coordinates refills and guarantees the shipment of all medications on time. Online tools allow customers to track their shipments, refills and co-pays. In late 2017, PillPack rolled out a redesigned website and drug prescription management technology called PharmacyOS, which PillPack says gives consumers better and faster ways to handle multiple prescriptions for chronic diseases that often require patients to take several pills at once.
PillPack and Capsule have plenty of competition among companies trying to use digital healthcare technology to build and operate a virtual drugstore or provide related delivery services. For example, DeliverCareRx provides home delivery of prescriptions and ongoing prescription refill management services to chronically ill, low-income, case-managed and managed-care organization patients. It has raised more than $13 million. In San Francisco, NURX.com prescribes and delivers prescriptions entirely via telemedicine and local delivery services The company prescribes and delivers birth control, emergency contraceptives and HIV prevention medications and so far has raised $7 million.
Other notable startups include Zipdrug.com, which offers medication delivery on-demand by app or phone, and Phil.com, an online prescription management and delivery platform that partners with pharmacies.
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