WEBVTT - GoodRx Co-CEO on Amazon Pharmacy Business 0:00:00.120 --> 0:00:04.640 This is Bloomberg Business Week with Carol Messer from Bloomberg Radio. 0:00:05.000 --> 0:00:07.640 So this was a story we were all over over 0:00:07.680 --> 0:00:11.039 the past week. It was about Amazon Amazon dot Com 0:00:11.080 --> 0:00:14.120 unveiling its biggest push into selling prescription drugs with the 0:00:14.200 --> 0:00:16.800 launch of a digital pharmacy and discounts for paying US 0:00:16.840 --> 0:00:19.560 Prime members. It sent shock waves through shares of drug 0:00:19.560 --> 0:00:22.560 store chains and distributors. We saw that impact. One stock 0:00:22.640 --> 0:00:25.880 that took a hit on the news down was good 0:00:25.880 --> 0:00:29.080 ore X. It operates a telemedicine site platform also to 0:00:29.200 --> 0:00:32.080 track drug prices. It went public in September. So joining 0:00:32.159 --> 0:00:34.839 us once again to get his take on all of 0:00:34.840 --> 0:00:36.960 this is Doug Hirsch, co founder cocy EO of good 0:00:37.000 --> 0:00:39.120 our X. He joins us once again on the phone 0:00:39.159 --> 0:00:41.639 from Santa Monica, California. Nice to have you back with us. 0:00:42.520 --> 0:00:44.519 Thank you, Carol. Good good to talk to again. So 0:00:44.720 --> 0:00:47.120 tell us a little bit about the Amazon news when 0:00:47.200 --> 0:00:51.400 when it hit, what did you think? Well, what's interesting 0:00:51.479 --> 0:00:54.640 is um I actually didn't think it was I thought 0:00:54.680 --> 0:00:56.800 it was a good thing, but I did not think 0:00:56.800 --> 0:00:59.880 that it was necessarily something that would be a sort 0:00:59.880 --> 0:01:02.600 of David versus versus Goliah story, which is really the 0:01:02.600 --> 0:01:05.200 way the press covered it. Um. You know good or 0:01:05.319 --> 0:01:07.120 X is a marketplace. We are a place where we 0:01:07.160 --> 0:01:09.360 gather over. I think it's two billion price points a 0:01:09.440 --> 0:01:12.080 day to try to help American consumers find the lowest 0:01:12.120 --> 0:01:14.440 price in their prescriptions. And you know, Amazon trying to 0:01:14.480 --> 0:01:17.800 improve their pharmacy experience for mail order is amazing. UM. 0:01:17.880 --> 0:01:19.720 And you know we're actually partners in In fact, I 0:01:19.760 --> 0:01:22.440 was just talking to Amazon today, UM. And so you know, 0:01:22.440 --> 0:01:24.720 I think it was construed as like Amazon is going 0:01:24.760 --> 0:01:27.160 to destroy pharmacist, we know it. I think in reality, 0:01:27.160 --> 0:01:29.080 it's it's another player trying to figure out how to 0:01:29.080 --> 0:01:32.040 do mail order, which is really really hard. Well, that's interesting, 0:01:32.080 --> 0:01:34.119 So you were talking with Amazon. Does that mean that 0:01:34.200 --> 0:01:37.360 you guys have been already collaborating and that there's more 0:01:37.400 --> 0:01:39.080 of that going on And that's just part of the 0:01:39.120 --> 0:01:42.160 whole picture it is. I mean, you know, we are 0:01:42.200 --> 0:01:45.400 a marketplace, um, and we are very close. So Amazon 0:01:45.400 --> 0:01:48.400 back in acquired a company called Kilpack, which is an 0:01:48.400 --> 0:01:51.640 excellent mail order pharmacy. Um. This is not Amazon's first 0:01:51.640 --> 0:01:53.480 four I think they were actually involved in drug store 0:01:53.480 --> 0:01:56.520 dot com way back in two thousands. Were Amazon much 0:01:56.520 --> 0:01:58.840 like they do you know, TVs and and everything else 0:01:58.880 --> 0:02:01.040 they sell. They would like to sell drugs by mail 0:02:01.120 --> 0:02:05.160 to Americans, which is a great novel idea. The challenges, um, 0:02:05.200 --> 0:02:07.280 it's just really hard, right, I think even today in 0:02:07.280 --> 0:02:09.919 the pandemic, I think less than it's just around five 0:02:09.919 --> 0:02:13.440 percent of American prescriptions actually arrived by mail. And there's 0:02:13.440 --> 0:02:15.519 been a lot of attempts to improve that, and Amazon's 0:02:15.560 --> 0:02:18.280 latest fora is trying to improve that, but it remains 0:02:18.320 --> 0:02:20.399 really really hard for a whole bunch of reasons. Well 0:02:20.560 --> 0:02:22.639 get into that, because I mean I see it even 0:02:22.680 --> 0:02:24.560 in my own family, like it's some of it makes 0:02:24.600 --> 0:02:28.040 just you know, such common sense where you know, to 0:02:28.120 --> 0:02:29.880 get it by mail, especially if it's something that you 0:02:29.919 --> 0:02:32.639 take all the time. But it's still I still see, 0:02:32.919 --> 0:02:34.600 you know, whether it's my own family or with others, 0:02:34.600 --> 0:02:36.359 that people want to go to the pharmacy, they want 0:02:36.360 --> 0:02:38.960 to touch base. What are what are the obstacles to 0:02:39.000 --> 0:02:41.800 really making this take off? Especially in a year to 0:02:41.960 --> 0:02:43.920 be fair dug right where I was just talking with 0:02:43.960 --> 0:02:47.440 Susan lyne bbg Ventures about how all of a sudden 0:02:47.520 --> 0:02:51.480 telemedicine people are embracing it big time, and it's not 0:02:51.600 --> 0:02:53.400 something that they just were going to do during COVID, 0:02:53.440 --> 0:02:57.440 they're planning to do it ongoing. Yeah, you're you're exactly right. 0:02:57.480 --> 0:02:59.799 I mean, there's lots of reasons why people go to 0:03:00.000 --> 0:03:02.280 a pharmacy. You know. Number one is interaction with the 0:03:02.320 --> 0:03:04.560 medical professional. Is always a lot of people want or 0:03:04.600 --> 0:03:06.799 they want to go to the pharmacist, talk about the prescription, 0:03:07.000 --> 0:03:08.840 talk about maybe that other thing that's been bugging them 0:03:08.840 --> 0:03:10.799 while they're there, pick up maybe some toothpaste or other 0:03:10.800 --> 0:03:12.880 things they've been wanting to get, and so, you know, 0:03:13.000 --> 0:03:14.760 I think there's a lot of value to going to 0:03:14.800 --> 0:03:16.760 a retail pharmacy that can be hard to replace with 0:03:16.800 --> 0:03:19.880 an online experience. UM. The other reason, though, is a 0:03:19.919 --> 0:03:21.880 little more complicated. You know, it can take up to 0:03:21.919 --> 0:03:24.440 five days for for someone to transfer prescription or get 0:03:24.440 --> 0:03:26.120 to do prescription from their doctor and get it sent, 0:03:26.480 --> 0:03:27.919 you know, and a lot of Americans don't realize they're 0:03:27.919 --> 0:03:29.360 out of pills until the bottle is empty, and they 0:03:29.360 --> 0:03:31.840 can't wait five days to stay on their meditation. And 0:03:31.880 --> 0:03:34.280 then one last reason Luke can also discussed is that, 0:03:34.520 --> 0:03:37.560 you know, uh, the PBMs, which are effectively the insurance 0:03:37.560 --> 0:03:41.600 companies for prescription benefits for all Americans. UM, they have 0:03:41.760 --> 0:03:44.160 a lot of restrictions around the use of mildor pharmacy 0:03:44.160 --> 0:03:46.840 because they also celedrugs by mailorder, and so it's not 0:03:46.920 --> 0:03:48.960 as simple as just saying, oh, you know, mail order 0:03:49.000 --> 0:03:50.120 is the exactly you know, when you buy a TV, 0:03:50.120 --> 0:03:51.600 you can buy it online or buy the store. It's 0:03:51.600 --> 0:03:53.760 not the same when it comes to pharmacy. Well, and 0:03:53.800 --> 0:03:55.600 it's interesting, you know, in a week where we also 0:03:55.680 --> 0:03:58.000 had President Trump come out and talk about drug pricing, 0:03:58.040 --> 0:04:00.960 the PBMs, the pharmacy benefit Managers, how do you see 0:04:00.960 --> 0:04:02.680 it their role in there. I think initially they were 0:04:02.680 --> 0:04:04.640 thought to be someone who is going to kind of 0:04:04.680 --> 0:04:06.920 help organize the process and make it better. I think 0:04:06.920 --> 0:04:09.840 there's now some expectations, or at least some thoughts that 0:04:09.880 --> 0:04:12.440 maybe it didn't quite work out the way we planned. 0:04:13.880 --> 0:04:16.039 I think, you know, look, we are independent. We are 0:04:16.080 --> 0:04:18.360 the Switzerland of pharmacy for lack of a better term, 0:04:18.360 --> 0:04:19.920 in the sense that we want to work with anyone 0:04:19.960 --> 0:04:23.240 that wants to help Americans lower the cost of their healthcare. UM. 0:04:23.240 --> 0:04:25.800 I think PBMs do important role. You know, they negotiate 0:04:25.880 --> 0:04:29.720 on behalf of millions of people pharmacies and with drug manufacturers. 0:04:29.720 --> 0:04:31.520 To try to lower drug costs. And you know, if 0:04:31.520 --> 0:04:33.880 you work at a company and the company is responsible 0:04:33.920 --> 0:04:36.120 for your benefits, they want someone looking at on their 0:04:36.160 --> 0:04:38.159 behalf to make sure that you know, the company isn't 0:04:38.200 --> 0:04:42.279 overpaying and that people are responsibly consuming healthcare. That said, 0:04:42.520 --> 0:04:45.360 you know that the critical argument against TBMs is that potentially, 0:04:45.480 --> 0:04:47.680 you know, they they're inefficient and they take money out 0:04:47.680 --> 0:04:51.960 of healthcare UM. And by by also selling prescriptions, you 0:04:52.000 --> 0:04:54.280 could argue that's a conflict where they're both you know, 0:04:54.400 --> 0:04:56.760 sort of monitoring your benefits and at the same point 0:04:56.839 --> 0:04:59.760 they're also a seller. So you know, I think there's 0:04:59.760 --> 0:05:01.680 a lot of value ppms. We work very closely with 0:05:01.720 --> 0:05:04.239 ples UM. I think they are they are one piece 0:05:04.240 --> 0:05:06.400 of the puzzle to the lower drug prices, but it's 0:05:06.440 --> 0:05:09.040 not purpose So, Doug, is there kind of, in your view, 0:05:09.240 --> 0:05:12.120 a comprehensive takeaway from the Amazon news because I feel 0:05:12.120 --> 0:05:15.400 like whenever Amazon, you know, increasingly says it's kind of 0:05:15.440 --> 0:05:17.599 dig a little bit deeper into an existing market. And 0:05:17.600 --> 0:05:20.320 as you said, this isn't their first foray when it 0:05:20.360 --> 0:05:24.240 comes to um the mail order drug business or you know, 0:05:24.279 --> 0:05:27.920 the drug business, UM, but they have increasingly been you know, 0:05:28.040 --> 0:05:30.680 taking steps more and more towards wanting to be part 0:05:30.680 --> 0:05:33.440 of that healthcare space. I mean, it's big business for Walmart. 0:05:33.839 --> 0:05:37.080 You know, Amazon has got to be watching it closely. Um, 0:05:37.120 --> 0:05:40.159 what's the takeaway when it comes to Amazon and maybe 0:05:40.160 --> 0:05:43.279 playing a role in this world in your view? I 0:05:43.320 --> 0:05:45.120 think the takeaway is that you have a lot of 0:05:45.240 --> 0:05:48.200 well capitalized companies that really want to innovate in healthcare, 0:05:48.279 --> 0:05:50.760 and they're doing lots of experiments. So whether it's Amazon 0:05:51.040 --> 0:05:54.120 or Walmart, you know, Walmart swelling out healthcare clinics. Amazon 0:05:54.120 --> 0:05:56.120 of course has tried a number of different things regarding 0:05:56.160 --> 0:06:00.000 with their employees and some medical care and working with doctors. Um, 0:06:00.160 --> 0:06:02.600 you have you know, much smaller companies innovating as well. 0:06:02.680 --> 0:06:05.400 And I'm excited that this level of technology and innovation 0:06:05.400 --> 0:06:08.400 that has changed so many other industries so much is 0:06:08.400 --> 0:06:10.520 coming to healthcare. And you know, we we feel like 0:06:10.560 --> 0:06:12.719 we we run that waiver as well, and we are 0:06:12.760 --> 0:06:16.000 excited to see innovations which honestly ultimately just make healthcare 0:06:16.040 --> 0:06:18.240 more accessible to people, whether it be things like telehealth, 0:06:18.560 --> 0:06:20.400 or make it less expensive, whether it be things like 0:06:20.440 --> 0:06:22.360 you know, mail order, or even just getting consumers the 0:06:22.400 --> 0:06:25.000 information they need because health care has been so mysterious 0:06:25.040 --> 0:06:27.000 for so long. You haven't known what a drug will cost. 0:06:27.040 --> 0:06:29.240 You've never known which doctors you can go to, you know, 0:06:29.279 --> 0:06:32.080 And so I'm really excited and I think this announcement 0:06:32.120 --> 0:06:34.680 just spurs both Amazon and their competitors on to to 0:06:34.800 --> 0:06:37.160 want to to make changes. Well, how do you think then? 0:06:37.200 --> 0:06:39.599 Also President Trump coming out with drug pricing, and this 0:06:39.680 --> 0:06:42.280 is something that was certainly part of his campaign four 0:06:42.360 --> 0:06:44.800 years ago, you know, to to to kind of get 0:06:44.839 --> 0:06:47.719 to what is a lack of transparency when it comes 0:06:47.720 --> 0:06:49.800 to drug pricing? And you know, why is it that 0:06:49.839 --> 0:06:52.360 other countries pay less for a drug than we do? 0:06:52.560 --> 0:06:54.680 How do you feel like all of this, you know, 0:06:54.720 --> 0:06:58.760 and even his focus on Most Favored Nations status not 0:06:58.839 --> 0:07:00.720 allowing things like that, how do you think it ultimately 0:07:00.800 --> 0:07:04.680 impacts the drug pricing industry going forward? You know, we 0:07:04.800 --> 0:07:06.560 that are actual has been around since about twenty ten 0:07:06.600 --> 0:07:08.800 and we've lived through the earth of the A c A, 0:07:08.880 --> 0:07:12.080 Obamacare and that's changes and then Trump's executive orders, and 0:07:12.120 --> 0:07:13.640 the one thing that seems to get lost in all 0:07:13.640 --> 0:07:16.560 these initiatives is the net out of pockets Americans. The 0:07:16.640 --> 0:07:18.720 worst continues to go up right, and we you know, 0:07:18.760 --> 0:07:20.680 I think you guys were just reporting about you know, 0:07:20.920 --> 0:07:22.600 people are losing their homes and being a big because 0:07:22.600 --> 0:07:24.640 they haven't money. Healthcare is works, right, people are just 0:07:24.680 --> 0:07:26.760 simply not going to the doctor and they're not getting 0:07:26.760 --> 0:07:29.000 the care they need and they stopped taking those meds 0:07:29.080 --> 0:07:31.240 and so um. You know, I think there's been a 0:07:31.280 --> 0:07:35.040 lot of talk in all administrations, to be honest, but 0:07:35.040 --> 0:07:37.360 there really hasn't been kind of brhansive reform that we 0:07:37.400 --> 0:07:40.000 need so the Americans are getting getting that care and uh, 0:07:40.040 --> 0:07:41.120 you know that's one of the things we do. We 0:07:41.120 --> 0:07:43.880 actually provide lots of inflamation to to to Washington and 0:07:43.920 --> 0:07:45.880 the state government saying hey, look, guys, I know you're 0:07:45.920 --> 0:07:47.240 making a lot of talking. You know, you're doing a 0:07:47.240 --> 0:07:49.160 lot of noise here, but but the out of pocket 0:07:49.160 --> 0:07:51.520 to Americans continues to go up, and we really have 0:07:51.560 --> 0:07:54.000 to address that and let's start information out there. I 0:07:54.000 --> 0:07:56.440 think the most interesting things Washington are some of these 0:07:56.440 --> 0:07:59.160 transparency policies. They're saying, hey, let's let's give Americans the 0:07:59.160 --> 0:08:00.480 tools they need to at least know what they're going 0:08:00.520 --> 0:08:01.760 to pay, and then they can work our ways to 0:08:01.800 --> 0:08:03.640 say it well, do you have hope that there are 0:08:03.720 --> 0:08:05.560 things that it will continue to change? And I do 0:08:05.600 --> 0:08:08.760 wonder how COVID plays an impact into that because we're 0:08:09.040 --> 0:08:12.120 seeing increasingly, you know, again, out of crisis comes innovation 0:08:12.200 --> 0:08:14.360 and we are finding better ways to do things, whether 0:08:14.440 --> 0:08:16.960 it's you know, have a meeting, or whether it's you know, 0:08:17.040 --> 0:08:19.840 meet with our doctors. I agree. I mean, you know, 0:08:19.920 --> 0:08:21.560 when you cannot go to the doctor and you still 0:08:21.640 --> 0:08:23.560 need to go, you discover tell the medicine. You know 0:08:23.560 --> 0:08:26.280 it tell medicine existed long before the pandemic, and only 0:08:26.320 --> 0:08:27.920 with I think it was in March or April went 0:08:27.920 --> 0:08:30.600 from basically nobody to I think a must visits and 0:08:30.880 --> 0:08:33.439 in April last this year, we're telling medicine. Will it 0:08:33.520 --> 0:08:35.120 stick around us? That? I don't know. I think a 0:08:35.120 --> 0:08:36.480 lot of people like to go to the doctor, like 0:08:36.520 --> 0:08:38.680 they like to know the pharmacy. I think for certain areas, 0:08:38.720 --> 0:08:41.080 for example, mental health, it's a no brainer, right, why 0:08:41.080 --> 0:08:43.040 don't I just see a therapist on on zoom instead 0:08:43.080 --> 0:08:45.080 of seeing them, you know, driving all the way to 0:08:45.080 --> 0:08:47.520 their office. So I'm really excited because I think it 0:08:47.600 --> 0:08:50.160 makes healthcare more accessible the people who can't get around, 0:08:50.360 --> 0:08:51.920 you know, today, it takes twenty nine days for the 0:08:51.920 --> 0:08:54.280 average American to get to a doctor, right, so what 0:08:54.360 --> 0:08:55.959 if we get shorten that time by doing telling the 0:08:56.000 --> 0:08:59.360 health visits, remote monitoring. There's lots of cool innovation, and 0:08:59.440 --> 0:09:01.560 I am excited. I think that the pandemic. One of 0:09:01.559 --> 0:09:03.839 the outcomes of the strategy will be that there will 0:09:03.880 --> 0:09:06.040 be some some permanent innovation that will have the Americans. 0:09:06.520 --> 0:09:08.360 So listen, I've got to ask you. So, when the 0:09:08.400 --> 0:09:10.440 Amazon news came out and your stock took a hit, 0:09:10.720 --> 0:09:13.959 I'm curious, were you talking to investors. Were investors reaching 0:09:13.960 --> 0:09:15.800 out to you guys and being like, well, what's up 0:09:15.840 --> 0:09:19.720 with this? They definitely were, because it's confusing. Our pharmacy 0:09:19.800 --> 0:09:22.040 is incredibly confusing. You know, we haven't even talked about 0:09:22.040 --> 0:09:24.040 the fact that, you know, when you're a pharmacy, you 0:09:24.040 --> 0:09:26.200 actually don't have that much control over your own prices 0:09:26.240 --> 0:09:29.800 because you have these crazy complicated contracts and the government's involved. Um. 0:09:29.840 --> 0:09:32.000 You know, imagine if you operated a convenience store and 0:09:32.040 --> 0:09:33.840 you couldn't set your own price from milk. You know, 0:09:33.880 --> 0:09:36.880 it's it's it's kind of crazy. Um. And so unfortunately, 0:09:36.880 --> 0:09:40.920 the confusion in this industry leads to people, Um, just 0:09:41.160 --> 0:09:43.160 making assumptions, right, Like one of the parts of the 0:09:43.160 --> 0:09:45.240 Azazon announcement was that you were going to be able 0:09:45.240 --> 0:09:47.520 to use this this discount that they don't even want 0:09:47.559 --> 0:09:49.640 you to use at places like Walmart and CVS, And 0:09:49.679 --> 0:09:51.840 all of a sudden, everyone thought that Amazon had partnered 0:09:51.840 --> 0:09:54.960 with Walmart and TVs, which they have not, and so, um, 0:09:55.000 --> 0:09:56.880 it's just pharmacy is super confusing. I mean, it's one 0:09:56.880 --> 0:09:58.280 of the reasons I've spent ten years studying it. I 0:09:58.320 --> 0:10:01.640 still don't think I'm an expert. And all the healthcare 0:10:01.679 --> 0:10:03.400 is to confusing. You know, why is there six thousand 0:10:03.400 --> 0:10:06.400 our band aids? You know, um and and so um. 0:10:06.440 --> 0:10:08.280 You know. Yes, we have spoken to a lot of folks, 0:10:08.320 --> 0:10:10.560 both President and aalys as well, to try to just 0:10:10.600 --> 0:10:12.360 help up understand a little bit more of the basics, 0:10:12.400 --> 0:10:14.240 so you understand this is not the end of the world. 0:10:14.280 --> 0:10:16.920 This is not a total game changer. It's it's more 0:10:16.960 --> 0:10:19.880 experiments designed to ultimately help consumers. You know, Doug, we 0:10:20.000 --> 0:10:22.720 just held the Bloomberg New Economy Forum and we talked 0:10:22.760 --> 0:10:25.280 about Obviously, COVID was front and center, and health was 0:10:25.320 --> 0:10:27.920 front and center, But it does feel like there's so 0:10:28.040 --> 0:10:31.679 much um, you know, lack of transparency within the health 0:10:31.679 --> 0:10:35.560 care community. There's also an industry that is so you know, 0:10:35.920 --> 0:10:39.040 reliant on the existing infrastructure to keep it going that 0:10:39.120 --> 0:10:42.440 you do wonder how that plays against any kind of 0:10:42.760 --> 0:10:46.679 you know, big innovation happening anytime soon. Yeah. I mean 0:10:47.120 --> 0:10:49.720 we were born out of that exact phenomenon, right we we. 0:10:49.840 --> 0:10:51.840 I you know, good X was born because I went 0:10:51.840 --> 0:10:53.360 to a pharmacy with the prescription in hand and they 0:10:53.360 --> 0:10:55.840 said fives and I just said, well, that's unacceptable. And 0:10:55.840 --> 0:10:58.160 I discovered by accident that drug prices varied and that 0:10:58.200 --> 0:11:01.120 if I did a little legwork, I could at that 0:11:01.160 --> 0:11:04.840 price at sense. And so I think there is a hunger. 0:11:05.200 --> 0:11:07.200 And you know, again, I think this this pandemic has 0:11:07.240 --> 0:11:09.480 activated Americans to be more active, whether it be hey 0:11:09.520 --> 0:11:10.920 I can't go to the the doctor's office, what else can 0:11:10.960 --> 0:11:13.240 I do? Hey, I can't afford that medicine, what else 0:11:13.280 --> 0:11:15.559 can I do? And so I think Americans are primed. 0:11:15.600 --> 0:11:17.679 I think the industry knows that when this pandemic is over, 0:11:17.720 --> 0:11:19.280 the attention is going to turn back to the over 0:11:19.480 --> 0:11:23.200 the incredibly high cost of healthcare. And so again, I 0:11:23.320 --> 0:11:25.960 personally get a lot of potential. I think times of disruption, 0:11:26.160 --> 0:11:27.920 as as you said earlier, there are the times when 0:11:27.960 --> 0:11:30.760 innovation really sparks, and so I am excited for the 0:11:30.760 --> 0:11:33.360 future once we get past this pandemic. Well me too, 0:11:33.559 --> 0:11:35.240 um and so great to check in with you again. 0:11:35.320 --> 0:11:37.840 Thank you so much, Doug. I really appreciated Doug Hirsch 0:11:37.880 --> 0:11:40.080 co founder Cocy of good r X, joining us on 0:11:40.080 --> 0:11:42.160 the phone from Santa Monica, California.