Drugstores see themselves as so much more than purveyors of toiletries and drugs. Before Duane Reade’s makeover, I never would have thought of it as a place to eat sushi, let alone grab a growler of beer. But drugstores are going through kind of an awkward transformation in their quest to be taken seriously as healthcare facilities. Still, even though many of these large retailers want to give you vaccines and help you manage your chronic condition, and CVS Heath ditched the smokes, they can’t seem to let go of the candy and alcohol. Like I said. Awkward.
But the appetite for experimentation that the Affordable Care Act and HITECH Act ushered in has seen entrepreneurs try their hand at reshaping the pharmacy experience too. Pill Pack created a mail order pill dispensing business and then added a brick and mortar unit, for instance. It’s more of a direct challenge to ZipDrug, particularly since both are focused on New York. Capsule seeks to ramp up the digital component in pharmacies.
The idea is to change the concept of pharmacies from the inside out. Although its brick and mortar presence in Chelsea is a big part of it, there’s also an app. Users order their medication online and it’s delivered by a bicycle courier to “most” New York City locations. It claims to handle communication with insurers and physicians for things like refills and informs users before they order a prescription what it costs. It asks people ordering new medication to contact their physician to send their prescription to the business.
The brainchild of Eric Kinariwala and Sonia Patel, Capsule seeks to tackle the pain points of time-consuming waits to fill medication prescriptions and working out the logistical shortcomings that lead to out of stock prescriptions as essentials to improving that experience. Kinariwala, the CEO, had worked as an analyst with Bain Capital and, before that, Perry Capital. Patel previously was pharmacy manager at Sam’s Club for eight years. It sees better communication between physicians and payers as one component to achieve that. It also delivers them to customers.
To solve the logistical issues that can lead to drugs being out of stock, it claims to have a predictive inventory system. Kinariwala and Patel spoke about their business, which launched this week, in a phone interview.
“The technology we have built takes care of all these things — there is dynamic inventory management, population analysis and we’re able to proactively do smart refills to make sure the meds are there,” said Patel.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Kinariwala said it currently employs 20, but expects staff to grow as the business scales. “We put a lot of time and effort to building a technology team” with backgrounds steeped in product design and engineering. “They know how to create a really compelling consumer experience.”
“Pharmacists are the victors in all of this,” Patel said. She contrasted it approach with the big box retailers emphasizing their interest in giving pharmacists more authority.
She added, “I learned over time the pain points that pharmacies and pharmacists have to deal with. Understaffed pharmacies can impact. They don’t give the attention to patients that they deserve.”
FYI, there is also an app called Capsule in Quebec that is all about filling prescriptions in Quebec. It’s easy to get confused.
It will be interesting to see how Capsule Pharmacy evolves in the face of growing competition both from other startups and drug store retailers interest in pivoting between treating customers as patients as well.
