Speaker 1: This is Bloomberg Business Week with Carol Messer from Bloomberg Radio.
Speaker 1: So this was a story we were all over over
Speaker 1: the past week. It was about Amazon Amazon dot Com
Speaker 1: unveiling its biggest push into selling prescription drugs with the
Speaker 1: launch of a digital pharmacy and discounts for paying US
Speaker 1: Prime members. It sent shock waves through shares of drug
Speaker 1: store chains and distributors. We saw that impact. One stock
Speaker 1: that took a hit on the news down was good
Speaker 1: ore X. It operates a telemedicine site platform also to
Speaker 1: track drug prices. It went public in September. So joining
Speaker 1: us once again to get his take on all of
Speaker 1: this is Doug Hirsch, co founder cocy EO of good
Speaker 1: our X. He joins us once again on the phone
Speaker 1: from Santa Monica, California. Nice to have you back with us.
Speaker 1: Thank you, Carol. Good good to talk to again. So
Speaker 1: tell us a little bit about the Amazon news when
Speaker 1: when it hit, what did you think? Well, what's interesting
Speaker 1: is um I actually didn't think it was I thought
Speaker 1: it was a good thing, but I did not think
Speaker 1: that it was necessarily something that would be a sort
Speaker 1: of David versus versus Goliah story, which is really the
Speaker 1: way the press covered it. Um. You know good or
Speaker 1: X is a marketplace. We are a place where we
Speaker 1: gather over. I think it's two billion price points a
Speaker 1: day to try to help American consumers find the lowest
Speaker 1: price in their prescriptions. And you know, Amazon trying to
Speaker 1: improve their pharmacy experience for mail order is amazing. UM.
Speaker 1: And you know we're actually partners in In fact, I
Speaker 1: was just talking to Amazon today, UM. And so you know,
Speaker 1: I think it was construed as like Amazon is going
Speaker 1: to destroy pharmacist, we know it. I think in reality,
Speaker 1: it's it's another player trying to figure out how to
Speaker 1: do mail order, which is really really hard. Well, that's interesting,
Speaker 1: So you were talking with Amazon. Does that mean that
Speaker 1: you guys have been already collaborating and that there's more
Speaker 1: of that going on And that's just part of the
Speaker 1: whole picture it is. I mean, you know, we are
Speaker 1: a marketplace, um, and we are very close. So Amazon
Speaker 1: back in acquired a company called Kilpack, which is an
Speaker 1: excellent mail order pharmacy. Um. This is not Amazon's first
Speaker 1: four I think they were actually involved in drug store
Speaker 1: dot com way back in two thousands. Were Amazon much
Speaker 1: like they do you know, TVs and and everything else
Speaker 1: they sell. They would like to sell drugs by mail
Speaker 1: to Americans, which is a great novel idea. The challenges, um,
Speaker 1: it's just really hard, right, I think even today in
Speaker 1: the pandemic, I think less than it's just around five
Speaker 1: percent of American prescriptions actually arrived by mail. And there's
Speaker 1: been a lot of attempts to improve that, and Amazon's
Speaker 1: latest fora is trying to improve that, but it remains
Speaker 1: really really hard for a whole bunch of reasons. Well
Speaker 1: get into that, because I mean I see it even
Speaker 1: in my own family, like it's some of it makes
Speaker 1: just you know, such common sense where you know, to
Speaker 1: get it by mail, especially if it's something that you
Speaker 1: take all the time. But it's still I still see,
Speaker 1: you know, whether it's my own family or with others,
Speaker 1: that people want to go to the pharmacy, they want
Speaker 1: to touch base. What are what are the obstacles to
Speaker 1: really making this take off? Especially in a year to
Speaker 1: be fair dug right where I was just talking with
Speaker 1: Susan lyne bbg Ventures about how all of a sudden
Speaker 1: telemedicine people are embracing it big time, and it's not
Speaker 1: something that they just were going to do during COVID,
Speaker 1: they're planning to do it ongoing. Yeah, you're you're exactly right.
Speaker 1: I mean, there's lots of reasons why people go to
Speaker 1: a pharmacy. You know. Number one is interaction with the
Speaker 1: medical professional. Is always a lot of people want or
Speaker 1: they want to go to the pharmacist, talk about the prescription,
Speaker 1: talk about maybe that other thing that's been bugging them
Speaker 1: while they're there, pick up maybe some toothpaste or other
Speaker 1: things they've been wanting to get, and so, you know,
Speaker 1: I think there's a lot of value to going to
Speaker 1: a retail pharmacy that can be hard to replace with
Speaker 1: an online experience. UM. The other reason, though, is a
Speaker 1: little more complicated. You know, it can take up to
Speaker 1: five days for for someone to transfer prescription or get
Speaker 1: to do prescription from their doctor and get it sent,
Speaker 1: you know, and a lot of Americans don't realize they're
Speaker 1: out of pills until the bottle is empty, and they
Speaker 1: can't wait five days to stay on their meditation. And
Speaker 1: then one last reason Luke can also discussed is that,
Speaker 1: you know, uh, the PBMs, which are effectively the insurance
Speaker 1: companies for prescription benefits for all Americans. UM, they have
Speaker 1: a lot of restrictions around the use of mildor pharmacy
Speaker 1: because they also celedrugs by mailorder, and so it's not
Speaker 1: as simple as just saying, oh, you know, mail order
Speaker 1: is the exactly you know, when you buy a TV,
Speaker 1: you can buy it online or buy the store. It's
Speaker 1: not the same when it comes to pharmacy. Well, and
Speaker 1: it's interesting, you know, in a week where we also
Speaker 1: had President Trump come out and talk about drug pricing,
Speaker 1: the PBMs, the pharmacy benefit Managers, how do you see
Speaker 1: it their role in there. I think initially they were
Speaker 1: thought to be someone who is going to kind of
Speaker 1: help organize the process and make it better. I think
Speaker 1: there's now some expectations, or at least some thoughts that
Speaker 1: maybe it didn't quite work out the way we planned.
Speaker 1: I think, you know, look, we are independent. We are
Speaker 1: the Switzerland of pharmacy for lack of a better term,
Speaker 1: in the sense that we want to work with anyone
Speaker 1: that wants to help Americans lower the cost of their healthcare. UM.
Speaker 1: I think PBMs do important role. You know, they negotiate
Speaker 1: on behalf of millions of people pharmacies and with drug manufacturers.
Speaker 1: To try to lower drug costs. And you know, if
Speaker 1: you work at a company and the company is responsible
Speaker 1: for your benefits, they want someone looking at on their
Speaker 1: behalf to make sure that you know, the company isn't
Speaker 1: overpaying and that people are responsibly consuming healthcare. That said,
Speaker 1: you know that the critical argument against TBMs is that potentially,
Speaker 1: you know, they they're inefficient and they take money out
Speaker 1: of healthcare UM. And by by also selling prescriptions, you
Speaker 1: could argue that's a conflict where they're both you know,
Speaker 1: sort of monitoring your benefits and at the same point
Speaker 1: they're also a seller. So you know, I think there's
Speaker 1: a lot of value ppms. We work very closely with
Speaker 1: ples UM. I think they are they are one piece
Speaker 1: of the puzzle to the lower drug prices, but it's
Speaker 1: not purpose So, Doug, is there kind of, in your view,
Speaker 1: a comprehensive takeaway from the Amazon news because I feel
Speaker 1: like whenever Amazon, you know, increasingly says it's kind of
Speaker 1: dig a little bit deeper into an existing market. And
Speaker 1: as you said, this isn't their first foray when it
Speaker 1: comes to um the mail order drug business or you know,
Speaker 1: the drug business, UM, but they have increasingly been you know,
Speaker 1: taking steps more and more towards wanting to be part
Speaker 1: of that healthcare space. I mean, it's big business for Walmart.
Speaker 1: You know, Amazon has got to be watching it closely. Um,
Speaker 1: what's the takeaway when it comes to Amazon and maybe
Speaker 1: playing a role in this world in your view? I
Speaker 1: think the takeaway is that you have a lot of
Speaker 1: well capitalized companies that really want to innovate in healthcare,
Speaker 1: and they're doing lots of experiments. So whether it's Amazon
Speaker 1: or Walmart, you know, Walmart swelling out healthcare clinics. Amazon
Speaker 1: of course has tried a number of different things regarding
Speaker 1: with their employees and some medical care and working with doctors. Um,
Speaker 1: you have you know, much smaller companies innovating as well.
Speaker 1: And I'm excited that this level of technology and innovation
Speaker 1: that has changed so many other industries so much is
Speaker 1: coming to healthcare. And you know, we we feel like
Speaker 1: we we run that waiver as well, and we are
Speaker 1: excited to see innovations which honestly ultimately just make healthcare
Speaker 1: more accessible to people, whether it be things like telehealth,
Speaker 1: or make it less expensive, whether it be things like
Speaker 1: you know, mail order, or even just getting consumers the
Speaker 1: information they need because health care has been so mysterious
Speaker 1: for so long. You haven't known what a drug will cost.
Speaker 1: You've never known which doctors you can go to, you know,
Speaker 1: And so I'm really excited and I think this announcement
Speaker 1: just spurs both Amazon and their competitors on to to
Speaker 1: want to to make changes. Well, how do you think then?
Speaker 1: Also President Trump coming out with drug pricing, and this
Speaker 1: is something that was certainly part of his campaign four
Speaker 1: years ago, you know, to to to kind of get
Speaker 1: to what is a lack of transparency when it comes
Speaker 1: to drug pricing? And you know, why is it that
Speaker 1: other countries pay less for a drug than we do?
Speaker 1: How do you feel like all of this, you know,
Speaker 1: and even his focus on Most Favored Nations status not
Speaker 1: allowing things like that, how do you think it ultimately
Speaker 1: impacts the drug pricing industry going forward? You know, we
Speaker 1: that are actual has been around since about twenty ten
Speaker 1: and we've lived through the earth of the A c A,
Speaker 1: Obamacare and that's changes and then Trump's executive orders, and
Speaker 1: the one thing that seems to get lost in all
Speaker 1: these initiatives is the net out of pockets Americans. The
Speaker 1: worst continues to go up right, and we you know,
Speaker 1: I think you guys were just reporting about you know,
Speaker 1: people are losing their homes and being a big because
Speaker 1: they haven't money. Healthcare is works, right, people are just
Speaker 1: simply not going to the doctor and they're not getting
Speaker 1: the care they need and they stopped taking those meds
Speaker 1: and so um. You know, I think there's been a
Speaker 1: lot of talk in all administrations, to be honest, but
Speaker 1: there really hasn't been kind of brhansive reform that we
Speaker 1: need so the Americans are getting getting that care and uh,
Speaker 1: you know that's one of the things we do. We
Speaker 1: actually provide lots of inflamation to to to Washington and
Speaker 1: the state government saying hey, look, guys, I know you're
Speaker 1: making a lot of talking. You know, you're doing a
Speaker 1: lot of noise here, but but the out of pocket
Speaker 1: to Americans continues to go up, and we really have
Speaker 1: to address that and let's start information out there. I
Speaker 1: think the most interesting things Washington are some of these
Speaker 1: transparency policies. They're saying, hey, let's let's give Americans the
Speaker 1: tools they need to at least know what they're going
Speaker 1: to pay, and then they can work our ways to
Speaker 1: say it well, do you have hope that there are
Speaker 1: things that it will continue to change? And I do
Speaker 1: wonder how COVID plays an impact into that because we're
Speaker 1: seeing increasingly, you know, again, out of crisis comes innovation
Speaker 1: and we are finding better ways to do things, whether
Speaker 1: it's you know, have a meeting, or whether it's you know,
Speaker 1: meet with our doctors. I agree. I mean, you know,
Speaker 1: when you cannot go to the doctor and you still
Speaker 1: need to go, you discover tell the medicine. You know
Speaker 1: it tell medicine existed long before the pandemic, and only
Speaker 1: with I think it was in March or April went
Speaker 1: from basically nobody to I think a must visits and
Speaker 1: in April last this year, we're telling medicine. Will it
Speaker 1: stick around us? That? I don't know. I think a
Speaker 1: lot of people like to go to the doctor, like
Speaker 1: they like to know the pharmacy. I think for certain areas,
Speaker 1: for example, mental health, it's a no brainer, right, why
Speaker 1: don't I just see a therapist on on zoom instead
Speaker 1: of seeing them, you know, driving all the way to
Speaker 1: their office. So I'm really excited because I think it
Speaker 1: makes healthcare more accessible the people who can't get around,
Speaker 1: you know, today, it takes twenty nine days for the
Speaker 1: average American to get to a doctor, right, so what
Speaker 1: if we get shorten that time by doing telling the
Speaker 1: health visits, remote monitoring. There's lots of cool innovation, and
Speaker 1: I am excited. I think that the pandemic. One of
Speaker 1: the outcomes of the strategy will be that there will
Speaker 1: be some some permanent innovation that will have the Americans.
Speaker 1: So listen, I've got to ask you. So, when the
Speaker 1: Amazon news came out and your stock took a hit,
Speaker 1: I'm curious, were you talking to investors. Were investors reaching
Speaker 1: out to you guys and being like, well, what's up
Speaker 1: with this? They definitely were, because it's confusing. Our pharmacy
Speaker 1: is incredibly confusing. You know, we haven't even talked about
Speaker 1: the fact that, you know, when you're a pharmacy, you
Speaker 1: actually don't have that much control over your own prices
Speaker 1: because you have these crazy complicated contracts and the government's involved. Um.
Speaker 1: You know, imagine if you operated a convenience store and
Speaker 1: you couldn't set your own price from milk. You know,
Speaker 1: it's it's it's kind of crazy. Um. And so unfortunately,
Speaker 1: the confusion in this industry leads to people, Um, just
Speaker 1: making assumptions, right, Like one of the parts of the
Speaker 1: Azazon announcement was that you were going to be able
Speaker 1: to use this this discount that they don't even want
Speaker 1: you to use at places like Walmart and CVS, And
Speaker 1: all of a sudden, everyone thought that Amazon had partnered
Speaker 1: with Walmart and TVs, which they have not, and so, um,
Speaker 1: it's just pharmacy is super confusing. I mean, it's one
Speaker 1: of the reasons I've spent ten years studying it. I
Speaker 1: still don't think I'm an expert. And all the healthcare
Speaker 1: is to confusing. You know, why is there six thousand
Speaker 1: our band aids? You know, um and and so um.
Speaker 1: You know. Yes, we have spoken to a lot of folks,
Speaker 1: both President and aalys as well, to try to just
Speaker 1: help up understand a little bit more of the basics,
Speaker 1: so you understand this is not the end of the world.
Speaker 1: This is not a total game changer. It's it's more
Speaker 1: experiments designed to ultimately help consumers. You know, Doug, we
Speaker 1: just held the Bloomberg New Economy Forum and we talked
Speaker 1: about Obviously, COVID was front and center, and health was
Speaker 1: front and center, But it does feel like there's so
Speaker 1: much um, you know, lack of transparency within the health
Speaker 1: care community. There's also an industry that is so you know,
Speaker 1: reliant on the existing infrastructure to keep it going that
Speaker 1: you do wonder how that plays against any kind of
Speaker 1: you know, big innovation happening anytime soon. Yeah. I mean
Speaker 1: we were born out of that exact phenomenon, right we we.
Speaker 1: I you know, good X was born because I went
Speaker 1: to a pharmacy with the prescription in hand and they
Speaker 1: said fives and I just said, well, that's unacceptable. And
Speaker 1: I discovered by accident that drug prices varied and that
Speaker 1: if I did a little legwork, I could at that
Speaker 1: price at sense. And so I think there is a hunger.
Speaker 1: And you know, again, I think this this pandemic has
Speaker 1: activated Americans to be more active, whether it be hey
Speaker 1: I can't go to the the doctor's office, what else can
Speaker 1: I do? Hey, I can't afford that medicine, what else
Speaker 1: can I do? And so I think Americans are primed.
Speaker 1: I think the industry knows that when this pandemic is over,
Speaker 1: the attention is going to turn back to the over
Speaker 1: the incredibly high cost of healthcare. And so again, I
Speaker 1: personally get a lot of potential. I think times of disruption,
Speaker 1: as as you said earlier, there are the times when
Speaker 1: innovation really sparks, and so I am excited for the
Speaker 1: future once we get past this pandemic. Well me too,
Speaker 1: um and so great to check in with you again.
Speaker 1: Thank you so much, Doug. I really appreciated Doug Hirsch
Speaker 1: co founder Cocy of good r X, joining us on
Speaker 1: the phone from Santa Monica, California.