GoodRx Co-CEO on Amazon Pharmacy Business

store chains and distributors. We saw that impact. One stock that took a hit on the news down was good ore X. It operates a telemedicine site platform also to track drug prices. It went public in September. So joining us once again to get his take on all of this is Doug Hirsch, co founder cocy EO of good our X. He joins us once again on the phone from Santa Monica, California. Nice to have you back with us.

Thank you, Carol. Good good to talk to again. So tell us a little bit about the Amazon news when when it hit, what did you think? Well, what's interesting is um I actually didn't think it was I thought it was a good thing, but I did not think that it was necessarily something that would be a sort of David versus versus Goliah story, which is really the way the press covered it. Um. You know good or X is a marketplace. We are a place where we

gather over. I think it's two billion price points a day to try to help American consumers find the lowest price in their prescriptions. And you know, Amazon trying to improve their pharmacy experience for mail order is amazing. UM. And you know we're actually partners in In fact, I was just talking to Amazon today, UM. And so you know, I think it was construed as like Amazon is going to destroy pharmacist, we know it. I think in reality, it's it's another player trying to figure out how to

do mail order, which is really really hard. Well, that's interesting, So you were talking with Amazon. Does that mean that you guys have been already collaborating and that there's more of that going on And that's just part of the whole picture it is. I mean, you know, we are a marketplace, um, and we are very close. So Amazon back in acquired a company called Kilpack, which is an excellent mail order pharmacy. Um. This is not Amazon's first four I think they were actually involved in drug store

dot com way back in two thousands. Were Amazon much like they do you know, TVs and and everything else they sell. They would like to sell drugs by mail to Americans, which is a great novel idea. The challenges, um, it's just really hard, right, I think even today in the pandemic, I think less than it's just around five percent of American prescriptions actually arrived by mail. And there's been a lot of attempts to improve that, and Amazon's latest fora is trying to improve that, but it remains

really really hard for a whole bunch of reasons. Well get into that, because I mean I see it even in my own family, like it's some of it makes just you know, such common sense where you know, to get it by mail, especially if it's something that you take all the time. But it's still I still see, you know, whether it's my own family or with others, that people want to go to the pharmacy, they want to touch base. What are what are the obstacles to

really making this take off? Especially in a year to be fair dug right where I was just talking with Susan lyne bbg Ventures about how all of a sudden telemedicine people are embracing it big time, and it's not something that they just were going to do during COVID, they're planning to do it ongoing. Yeah, you're you're exactly right. I mean, there's lots of reasons why people go to a pharmacy. You know. Number one is interaction with the

medical professional. Is always a lot of people want or they want to go to the pharmacist, talk about the prescription, talk about maybe that other thing that's been bugging them while they're there, pick up maybe some toothpaste or other things they've been wanting to get, and so, you know, I think there's a lot of value to going to a retail pharmacy that can be hard to replace with an online experience. UM. The other reason, though, is a

little more complicated. You know, it can take up to five days for for someone to transfer prescription or get to do prescription from their doctor and get it sent, you know, and a lot of Americans don't realize they're out of pills until the bottle is empty, and they can't wait five days to stay on their meditation. And then one last reason Luke can also discussed is that, you know, uh, the PBMs, which are effectively the insurance

companies for prescription benefits for all Americans. UM, they have a lot of restrictions around the use of mildor pharmacy because they also celedrugs by mailorder, and so it's not as simple as just saying, oh, you know, mail order is the exactly you know, when you buy a TV, you can buy it online or buy the store. It's

not the same when it comes to pharmacy. Well, and it's interesting, you know, in a week where we also had President Trump come out and talk about drug pricing, the PBMs, the pharmacy benefit Managers, how do you see it their role in there. I think initially they were thought to be someone who is going to kind of help organize the process and make it better. I think there's now some expectations, or at least some thoughts that maybe it didn't quite work out the way we planned.

I think, you know, look, we are independent. We are the Switzerland of pharmacy for lack of a better term, in the sense that we want to work with anyone that wants to help Americans lower the cost of their healthcare. UM. I think PBMs do important role. You know, they negotiate on behalf of millions of people pharmacies and with drug manufacturers.

To try to lower drug costs. And you know, if you work at a company and the company is responsible for your benefits, they want someone looking at on their behalf to make sure that you know, the company isn't overpaying and that people are responsibly consuming healthcare. That said, you know that the critical argument against TBMs is that potentially, you know, they they're inefficient and they take money out

of healthcare UM. And by by also selling prescriptions, you could argue that's a conflict where they're both you know, sort of monitoring your benefits and at the same point they're also a seller. So you know, I think there's a lot of value ppms. We work very closely with

ples UM. I think they are they are one piece of the puzzle to the lower drug prices, but it's not purpose So, Doug, is there kind of, in your view, a comprehensive takeaway from the Amazon news because I feel like whenever Amazon, you know, increasingly says it's kind of

dig a little bit deeper into an existing market. And as you said, this isn't their first foray when it comes to um the mail order drug business or you know, the drug business, UM, but they have increasingly been you know, taking steps more and more towards wanting to be part of that healthcare space. I mean, it's big business for Walmart. You know, Amazon has got to be watching it closely. Um, what's the takeaway when it comes to Amazon and maybe

playing a role in this world in your view? I think the takeaway is that you have a lot of well capitalized companies that really want to innovate in healthcare, and they're doing lots of experiments. So whether it's Amazon or Walmart, you know, Walmart swelling out healthcare clinics. Amazon of course has tried a number of different things regarding with their employees and some medical care and working with doctors. Um, you have you know, much smaller companies innovating as well.

And I'm excited that this level of technology and innovation that has changed so many other industries so much is

coming to healthcare. And you know, we we feel like we we run that waiver as well, and we are excited to see innovations which honestly ultimately just make healthcare more accessible to people, whether it be things like telehealth, or make it less expensive, whether it be things like you know, mail order, or even just getting consumers the information they need because health care has been so mysterious for so long. You haven't known what a drug will cost.

You've never known which doctors you can go to, you know, And so I'm really excited and I think this announcement just spurs both Amazon and their competitors on to to want to to make changes. Well, how do you think then? Also President Trump coming out with drug pricing, and this is something that was certainly part of his campaign four years ago, you know, to to to kind of get to what is a lack of transparency when it comes

to drug pricing? And you know, why is it that other countries pay less for a drug than we do? How do you feel like all of this, you know, and even his focus on Most Favored Nations status not allowing things like that, how do you think it ultimately

impacts the drug pricing industry going forward? You know, we that are actual has been around since about twenty ten and we've lived through the earth of the A c A, Obamacare and that's changes and then Trump's executive orders, and the one thing that seems to get lost in all these initiatives is the net out of pockets Americans. The worst continues to go up right, and we you know, I think you guys were just reporting about you know, people are losing their homes and being a big because

they haven't money. Healthcare is works, right, people are just simply not going to the doctor and they're not getting the care they need and they stopped taking those meds and so um. You know, I think there's been a lot of talk in all administrations, to be honest, but there really hasn't been kind of brhansive reform that we need so the Americans are getting getting that care and uh,

you know that's one of the things we do. We actually provide lots of inflamation to to to Washington and the state government saying hey, look, guys, I know you're making a lot of talking. You know, you're doing a lot of noise here, but but the out of pocket to Americans continues to go up, and we really have to address that and let's start information out there. I think the most interesting things Washington are some of these

transparency policies. They're saying, hey, let's let's give Americans the tools they need to at least know what they're going to pay, and then they can work our ways to say it well, do you have hope that there are things that it will continue to change? And I do wonder how COVID plays an impact into that because we're seeing increasingly, you know, again, out of crisis comes innovation and we are finding better ways to do things, whether it's you know, have a meeting, or whether it's you know,

meet with our doctors. I agree. I mean, you know, when you cannot go to the doctor and you still need to go, you discover tell the medicine. You know it tell medicine existed long before the pandemic, and only with I think it was in March or April went from basically nobody to I think a must visits and in April last this year, we're telling medicine. Will it stick around us? That? I don't know. I think a lot of people like to go to the doctor, like

they like to know the pharmacy. I think for certain areas, for example, mental health, it's a no brainer, right, why don't I just see a therapist on on zoom instead of seeing them, you know, driving all the way to their office. So I'm really excited because I think it makes healthcare more accessible the people who can't get around, you know, today, it takes twenty nine days for the average American to get to a doctor, right, so what if we get shorten that time by doing telling the

health visits, remote monitoring. There's lots of cool innovation, and I am excited. I think that the pandemic. One of the outcomes of the strategy will be that there will be some some permanent innovation that will have the Americans. So listen, I've got to ask you. So, when the Amazon news came out and your stock took a hit, I'm curious, were you talking to investors. Were investors reaching out to you guys and being like, well, what's up

with this? They definitely were, because it's confusing. Our pharmacy is incredibly confusing. You know, we haven't even talked about the fact that, you know, when you're a pharmacy, you actually don't have that much control over your own prices because you have these crazy complicated contracts and the government's involved. Um. You know, imagine if you operated a convenience store and you couldn't set your own price from milk. You know,

it's it's it's kind of crazy. Um. And so unfortunately, the confusion in this industry leads to people, Um, just making assumptions, right, Like one of the parts of the Azazon announcement was that you were going to be able to use this this discount that they don't even want you to use at places like Walmart and CVS, And all of a sudden, everyone thought that Amazon had partnered with Walmart and TVs, which they have not, and so, um, it's just pharmacy is super confusing. I mean, it's one

of the reasons I've spent ten years studying it. I still don't think I'm an expert. And all the healthcare is to confusing. You know, why is there six thousand our band aids? You know, um and and so um. You know. Yes, we have spoken to a lot of folks, both President and aalys as well, to try to just help up understand a little bit more of the basics, so you understand this is not the end of the world. This is not a total game changer. It's it's more

experiments designed to ultimately help consumers. You know, Doug, we just held the Bloomberg New Economy Forum and we talked about Obviously, COVID was front and center, and health was front and center, But it does feel like there's so much um, you know, lack of transparency within the health care community. There's also an industry that is so you know, reliant on the existing infrastructure to keep it going that you do wonder how that plays against any kind of

you know, big innovation happening anytime soon. Yeah. I mean we were born out of that exact phenomenon, right we we. I you know, good X was born because I went to a pharmacy with the prescription in hand and they said fives and I just said, well, that's unacceptable. And I discovered by accident that drug prices varied and that if I did a little legwork, I could at that price at sense. And so I think there is a hunger.

And you know, again, I think this this pandemic has activated Americans to be more active, whether it be hey I can't go to the the doctor's office, what else can I do? Hey, I can't afford that medicine, what else can I do? And so I think Americans are primed. I think the industry knows that when this pandemic is over, the attention is going to turn back to the over the incredibly high cost of healthcare. And so again, I

personally get a lot of potential. I think times of disruption, as as you said earlier, there are the times when innovation really sparks, and so I am excited for the future once we get past this pandemic. Well me too, um and so great to check in with you again. Thank you so much, Doug. I really appreciated Doug Hirsch co founder Cocy of good r X, joining us on the phone from Santa Monica, California.