Pharma

GoodRx co-founder talks biggest challenges

About 7% of US adults can’t afford their prescriptions, and GoodRx helps some consumers get their meds for less.
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· 5 min read

You’ve probably heard at least one person in your life tell a story about going to the pharmacy to get a new prescription, only to be shell-shocked by an enormous price tag, even after insurance. As of 2021, an estimated 7% of US adults couldn’t pay for their prescriptions within the previous three months.

Doug Hirsch was prompted to co-found GoodRx, a marketplace that offers coupons for common, mostly generic drugs, in 2011, after being shocked at the high price of a prescription he needed, and the fact that the price varied widely based on what pharmacy he used.

Today, GoodRx has a market cap of just below $1.8 billion, and its prescription discount coupons are accepted at “virtually every US pharmacy.”

GoodRx doesn’t set the prices consumers pay for their prescriptions. That’s decided by pharmacy benefit managers (PBMs), who negotiate drug prices with pharmacies or pharmacy purchasing groups. GoodRx just partners with the PBMs to display the negotiated prices on their coupons, and because not every plan covers every drug, these prices can be much lower than what you’d pay by using health insurance. GoodRx also looks for things like pharmacy savings programs offered by drug manufacturers that bring costs down further.

Hirsch sat down with Healthcare Brew to talk about the challenges of starting a healthcare company and how GoodRx is evolving.

This interview has been edited and condensed for clarity.

You didn’t have much experience in the healthcare world before founding GoodRx, and healthcare is a notoriously hard industry to break into. What was the most unexpected challenge you faced when getting GoodRx off the ground?

The challenge is just that it’s so opaque and so mysterious that it’s hard to even figure out where to start. It’s so massive, it’s so entrenched with players that are so large. If you’re going to make an attempt to fix it, the question you have to ask yourself is, “Who’s going to pay for it?”

Let’s say you and I said, “Hey, there’s a better way to treat diabetes.” Great. But are you gonna ask the patient to pay for it? Are you gonna ask a doctor to pay for it? Are you gonna ask an insurer to pay for it? You have to think through who you’re going after, who’s that constituency.

GoodRx has made some big moves this year, including acquiring VitaCare Prescription Services for $150 million and the recently announced provider portal. What do these moves say about the way GoodRx’s business strategy is evolving?

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I’m in this game because I want to fix the terrible, broken state of American healthcare. When I think about us, I think about, “How can we help people with more aspects of their care?” If it’s prescriptions, great, we’re helping at the pharmacy counter to find an affordable price. But really, most of our focus is on generic drugs. So now we’re really starting to focus on brand drugs. We’re trying to focus on helping physicians, because every physician represents 2,000 patients. We’re looking at other ways to help a consumer get that prescription. The good news is I could work on this the rest of my life and I’d still nowhere get close to the end.

Yeah, like you said, you could work in healthcare for the rest of your life, and there’s still going to be a lot of challenges. What would you consider GoodRx’s biggest challenge right now?

The challenge, amazingly, a decade after we got started, is just that the old way of doing things remains so set in stone. Even in our own company, I found out recently that we have employees who just pull out their insurance card when they go to their pharmacy. And that’s not the right answer. I still meet people all the time who are like, “Yeah, I’m just not gonna go to the doctor because I won’t be able to afford it.” They don’t know, they just assume that. And so I think our main challenge remains trying to break up the status quo. We’re the last industry to do everything. If you want to transfer a prescription between two pharmacies, it either involves a phone call or fax. Can you think of any other industry where the word “fax” comes up? I mean, it’s depressing.

Are there any parts of the industry that GoodRx hasn’t ventured into yet that would be a dream of yours?

My dream is to ultimately make healthcare come to you. You shouldn’t seek healthcare, healthcare should reach out to you. You can imagine a reach out where it’s like, “Hey, we’ve noticed your heart rate has been high for the last three days. I’ve already set you up an appointment. It’s for next Tuesday at three. If you don’t like it, click this button.” I just think we can have a living, breathing, preventative healthcare setup. My dream is that healthcare stops being episodic, but becomes a continuum, where you’re constantly interacting with the healthcare system to stay healthy.

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