Direct to Consumer Primary Care
When Apple first launched their Mac PC, people dismissed it as a toy, saying it could never replace mainframe computers, but the product continued to improve until it gained mass acceptance and adoption. Traditional primary care today looks like mainframe computers: hard to access, painful to use, and expensive. A candidate for the metaphorical PC has already started to develop and grow. Telemedicine, specifically direct to consumer telemedicine, came on the scene in a significant way just before the pandemic, and the pandemic has only catalyzed its growth. GoodRx (NYSE: GDRX) and Ro ($1B in funding) are both great examples of pre-pandemic companies which have grown significantly and continue to innovate. Similar to how the PC took computing from experts and gave it to the people, these companies are moving the doctor’s office to their virtual solution.
Both GoodRx and Ro started from opportunities found in pharmaceutical delivery and have grown tremendously in their respective spaces. GoodRx launched in 2012 with the promise of improving price transparency by listing the true cost of medications on their platform. Their product leverages the existing infrastructure via pharmacy benefit managers (PBMs) to deliver pricing on medications which may even be lower than copays through health insurance while partnering with brick and mortar pharmacies to deliver the medications. Ro (originally Roman) launched in 2017 to create an A to Z virtual solution for a single problem stemming from a very personal experience. They developed and owned the entire process by building out a telemedicine platform and operating a cloud pharmacy. Despite differences in approach and initial purpose, the years and circumstances since their inception have made them look even more similar.
A patient receiving medication begins with a prescription at the point of care (i.e the doctor visit), which also happens to be where the pharmacy is chosen. Ro’s strategy as a care platform and pharmacy streamlines the process which also helps generate two streams of revenue simultaneously: payment for the visit and payment for the medication. GoodRx made a similar revelation and acquired HeyDoctor in 2019. Even though GoodRx does not run its own pharmacy, putting its pricing and card in front of the patient at the point of care increases its visibility and usage, also giving the company more leverage when negotiating with PBMs and pharmacies. They both continue to attack the issue of drug costs with GoodRx launching GoodRx Gold in 2018 and Ro launching a prescription plan through its pharmacy in 2020. These two companies still have fundamental differences, but their efforts to utilize technology to solve the cost issue in pharmaceuticals has driven some interesting convergent evolution.
Most traditional primary care offices make little to no effort in innovating pharmacy solutions at the point of care. Meanwhile, GoodRx and Ro have continued to innovate point-of-care solutions within their pharmacy solutions. GoodRx currently can treat 37 issues on its platform and Ro recently acquired Workpath to have lab drawing abilities. These two companies have plenty of competitors who are all putting the same pressure on traditional primary care. As these companies get really good at 100 individual issues, one at a time, offering bundled services for comorbidities does not seem out of the question, and further down the line, offering a new form of comprehensive primary care with a pharmacy solution included seems plausible. Of course, there’s still a way to go before this transition occurs in any meaningful way. In the meantime there has been an emergence of virtual-first primary care which will create its own ripples within the healthcare ecosystem.