As pharmacy startup Capsule makes plans to expand, staff size to double. Plus, Optum sues over new Amazon health care firm, and VA wait times drop
Capsule, a digital pharmacy upstart that counts Amazon’s PillPack in its peer class, plans to double the size of its staff to 450 employees in 2019, according to CEO and founder Eric Kinariwala.
The once static pharmacy market has been shaken up by the entrance of startups like Capsule, PillPack and Roman, which aim to deliver on a better customer experience than what is offered by the pharmacy counters at CVS Health and Walgreens. Amazon’s $1 billion acquisition of PillPack last year further cemented the idea that the traditional pharmacy model isn’t working.
And that’s why the retail giants are rethinking the way they’ve always done business. Over the last two months, Walgreens has announced partnerships, with grocery chain Kroger for meal kits, Microsoft (which is LinkedIn’s parent company) for cloud services and Verily Life Sciences around diabetes, as well as next-day delivery. CVS Health is also trying new things, like same-day prescription drug delivery, delivery by drone, and putting more medical services in its stores following its $69 billion purchase of Aetna.
“Do you want to get health care in a drugstore? What has changed in the world to suggest that is true? MinuteClinic has existed for 15 years,” Kinariwala said. “When I think about where the puck is going, where consumer behavior is going, I just don’t see any evidence that is how people want to consume health care. They want to consume health care the way they consume everything else in their lives, which is on their phone.”
Since Capsule received a $50 million funding round in August, the company has kicked off a senior talent hiring spree, bringing on Dorothy Gemmell, former chief commercial officer at online therapy startup AbleTo; Ben Pfeifer, former GM of editorial at Shutterstock; Douglas De Angelo, a former VP at Walmart’s Jet; and Julie Sommerville, a former director of engineering at Blue Apron.
The growth plans include tripling the size of the product engineering team and doubling the number of sales employees in New York City, Kinariwala said.
About $350 billion is spent on retail pharmacy each year in the U.S., and currently about 1% of that spending comes from online purchases. Kinariwala expects 25% of spending to shift online in the next seven years, creating a $100 billion digital pharmacy marketplace.
What’s your take? How do you think the U.S. pharmacy market will shake out in 2019?
News I’m Watching
1. Optum lawsuit highlights industry worry over new health care company. The pharmacy benefit manager, owned by UnitedHealth Group, filed a lawsuit against a former employee who now works for Amazon-Berkshire Hathaway-J.P. Morgan’s new health care firm. Optum is accusing the employee of taking company secrets with him. Beyond the news that the unnamed venture hired Atul Gawande and other execs, few details have emerged about the company’s plans.
2. Veterans Affairs’ wait times drop, now shorter than private-sector providers. A study, published in JAMA Network Open, found that average VA wait times for an appointment were 17.7 days in 2017, compared to 29.8 days for providers in the private sector, according to the NYT. That’s flipped from 2014, when VA wait times were 22.5 days and private sector wait times were 18.7 days. As wait times for medical appointments rise, startup urgent care and direct primary care businesses have stepped in, hoping to lure patients frustrated by long waits.
3. You can buy medical supplies, medication—and hospital rooms on Amazon. EIR Healthcare said it is selling hospital rooms for $285,000 per unit on the e-commerce platform, according to CNBC. Similar to the Casper bed-in-a-box model, the units sold by EIR come ready made, and CEO Grant Geiger told Business Insider last year that the rooms are cheaper and take less time to build than traditional rooms.
How do you think the U.S. pharmacy market will shake out in 2019? What’s your take on the Optum lawsuit? What should providers do to help address long wait times? Would you buy a hospital room on Amazon? Share your thoughts in the comments, using #TheCheckup.
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5yIt depends on diverse factors.it has its both harmful and benefit effects on Healthcare system
Software Engineer
5yData should be the barrier to entry in this space as it is elsewhere in pharma. It seems any doctor and engineer can combine forces to become a pill mill these days. Data ensures ethical, compassionate, and transparent practices in this industry.
Founder, Managing Partner & CEO at Atomic
5yHims/hers is by far the leader in this space and not mentioned. We have 3-4X the customers of the next closest competitor. There are lot of smaller copy cats out there.
☆Pharmacist with Passion for Health/Fitness/Medicine
5yI think what Capsule is doing is great. I believe they can help address many unmet needs in health care and revitalize many of the inefficiencies pharmacy has endured; all of which impact patient care. For example, we have a large primary care gap in health care and I believe Pharmacist need to step up! They have such a vast knowledge of drugs/medicine and can be a great help to the healthcare system. I encourage them to step out from behind the counter and showcase their professional value! Proof of Pharmacists’ ROI can range from their impact on patient-adherence, chronic disease management, all the way to decreasing emergency room visits and managing drug spending within a health system! Capsule is a #newkind of pharmacy, we need to also showcase a #newkind of pharmacist.
Research Consultant at United Nations Institute for Disarmament Research driving global policy
5yInteresting developments, for developing countries in Africa with over 350 million without access to the internet, let alone electricity or basic computers, the increasing digital divide in healthcare is reason for concern, however we will keep monitoring the evolution