Many a healthcare startup grave has been dug [or pivot required] because companies charged boldly into the direct-to-consumer market only to encounter an insurmountable challenge – never convincing enough customers to pay for the services.
But a few companies have scaled that mountain including Ro, the New York-based d-to-c telehealth and pharmcy services firm that got started in providing a digital patient experience to those suffering from erectile dysfunction (recall the Roman television ads). Since then, Ro has expanded its products to target even more men with different conditions, created Rory, a woman’s health company and done a variety of acquisitions to cement its position as “The Patient Company” — it’s own tagline. The mission has always been to understand what can be done if the hurdles can be removed in healthcare, believes Dr. Melynda Barnes, chief medical officer at Ro.
Dr. Melynda Barnes, chief medical officer, Ro
“I think a lot of people think that insurance is a 100 percent a requirement in healthcare and if you take that away, you can actually innovate and put the patient at the center and think about what do patients actually need what do the providers want and what do the pharmacists need to deliver that care,” Dr. Barnes said in an interview last week at HLTH.
That philosophy has served the company well so far — it has raised $876 million and boasts a valuation of more than $5 billion. Could this recipe then be replicated successfully in the business-to-business world? Seemed a reasonable question to ask, given we were both in Boston at HLTH, a large industry conference.
Dr. Barnes was more than happy to speculate.
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.
“I think if we do anything b-to-b it will always be through the lens of a patient,” she began. “What I think of is potentially having some kind of offering for employers — self-insured employers — and we would like to think out of the box and say if a self-insured employer is spending X number of dollars per employees per year, give us those dollars … and let us design something more holistic and it could be they have access to debit card and they could use that on our platform.”
Ok, and why should employers come to Ro when it could already go with a plan administrator like the large insurance companies who have a variety of service providers working with them or directly engage with vendors?
Presumably they don’t have the platform that Ro is steadily building, not the seamless patient experience. Or because employers are looking for one stop shops.
“I think what we are doing right now is laying the foundation so that the employer doesn’t have to have 10,12,15 different vendors that they are working with,” she declared.
And the acquisitions that Ro has been over the years shows how it is actually morphing into something like a digital hospital.
“We are moving to a more care vertical [model]- so a model almost like a hospital that has different departments based on condition” Dr. Barnes said.
So aside from Ro and Rory and Zero, which helps people quit smoking, the company recently acquired Modern Fertility in May, which provides everything from ovulation tests, pregnancy tests and prenatal vitamins to those seeking to get pregnant. The company launched Ro Mind in July through which people fighting stress or anxiety can see behavioral health specialists online, view video content and even receive drugs at home. The at-home convenience is central to Ro’s philosophy and not just with Ro Mind or Ro and Rory pharmacy products that are delivered home. Back in 2020, the company acquired Workpath to provide in-home lab-draws, along with vaccinations and other primary care type services. This summer, the New York company continued its buying spree by acquiring Kit to expand it’s at-home testing capabilities. Ro has raised
“So the conditions that we treat are about to proactively expand as long as we have objective patient data,” Barnes said.
In other words, employers would get a big bang for their buck should Ro continue to expand the diseases it tackles. Ro is already working with a large employer though purely on the retail end. Earlier this spring, the company announced plans to roll out all its over-the-counter products in all Walmart stores — they include daily vitamins and supplements for heart health, stress relief, testosterone support, prostate health and a multivitamin, as well as Roman Swipes and condoms.
So when would Ro wade into the world of b-to-b?
“It’s not on our timeline right now but as chief medical officer I have to think about how are we treating complex conditions like diabetes, high blood pressure and so thinking about most patients with these conditions are used to having that paid for through their insurance, what is a a way that we can provide them with those services at a low cost and one way would be to do this with employers.” Barnes said. “Our patients are asking us, why do I have to go here for my diabetes and why do I have to go here for my hypertension? We are thinking about what’s the idea end-to-end solution for our current members, and for some of our other conditions we will continue to acquire new people, but if i can add holistic value to our current members that would be amazing.”
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