In recent months its likely you’ve seen advertisements for a new crop of companies purporting to sell prescription drug like oral contraceptives, ED medication or hair-loss treatments directly to consumers.
Well-capitalized startups like Hims, Nurx and Lemonaid have pitched themselves as a way to skirt the traditional inefficient pharmacy process by enabling video visits with doctors who can write scripts and send medications straight to the patient’s home.
Behind those aforementioned brands sits Truepill’s technology, which handles the logistics, shipping and pharmacy fulfillment necessary to run the direct-to-consumer businesses.
The San Mateo, California-based company – which bills itself as the “AWS for pharmacies” – is launching publically with $14 million in funding to expand its domestic operations and start growing internationally. The company’s $10 million Series A was led by Initialized Capital with participation from investors including Sound Ventures and Y Combinator.
Essentially, Truepill acts as the licensed pharmacist dispensing and shipping the medication prescribed through Hims and its competitors. A patient prescription gets routed to Truepill which fulfills the order and is paid back for the cost of the drug, in addition to a service and shipping fee.
The company operates a fulfillment center in Northern California that is licensed to ship medication to all 50 states.
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.
On the other end, Truepill’s API gives visibility for customers into their orders and operations by providing data like overall fulfillment volume, how many orders are going out on time and what are the issues leading to delays.
“This is a not a model that has existed before, in being exclusively B2B,” Truepill President and co-founder Sid Viswanathan said. “We are the pharmacy behind the scenes that is powering the entire ecosystem.”
Truepill is the brainchild of Viswanathan and pharmacist Umar Afridi, who’s experiences in the retail pharmacy industry highlighted the need for a more streamlined way to fill patient prescriptions. Since the company’s founding in 2016, it has processed more than 1 million prescriptions and currently employs a workforce of 150 people.
The company is in the process of setting up distribution centers in New York, the Midwest and Manchester in the United Kingdom with hopes to expand into new markets in Canada, Australia and Europe.
Truepill is also investing in technology that can automate the medication dispensing process and raise its capacity to fulfill up to 50,000 to 100,000 prescriptions a day.
Competition for market share among direct-to-consumer pharmacy brands is fierce with companies like Lemonaid and Nurx (both Truepill customers) locking horns over complaints about business practices.
Afridi said that by functioning as a background infrastructure layer, Truepill can provide non-partisan services to the entire industry, which can take advantage of the company’s economies of scale and growing international footprint.
In response to criticisms about the lower level of clinical oversight that direct-to-consumer pharmacy brands have in prescribing drugs, Afridi said Truepill has an internal quality control process to validate customer clinical protocols, but said he couldn’t comment in detail about the process.
“We don’t just let anyone come on board and start filling a prescription for them,” said Afridi, who serves as the company’s CEO. “As pharmacists we have to make sure that we’re protecting patients.”
The encroach of Amazon into the pharmacy space through its PillPack acquisition has been top of mind of the entire healthcare industry and Truepill is no exception.
However, Viswanathan said that the company is trying to create a new category as an end-to-end care and delivery model for other brands in contrast to Amazon’s general status as a consumer-facing company.
While direct-to-consumer pharmacy brands make up the bulk of the company’s business, Viswanathan said Truepill is also working directly with drugmakers to purchase medication.
Afridi said he sees future opportunities working with PBMs, specialty pharmacies and helping aid direct-to-consumer brands’ movement into higher level medications for conditions like high cholesterol and high blood pressure.
“The way we see it, any prescription you don’t need straightaway you can get in the mail and we’re positioning ourselves to be the infrastructure that powers that change over the years,” Afridi said.
Picture: Ligorko, Getty Images
