New headwinds are developing against the independent pharmacy, a business model that is already in a bitter fight against PBMs and payors in the space.
New Entrants in Prescription Delivery
Likely the splashiest news, Uber Health announced last week that they had partnered with NimbleRx to deliver prescription drugs to patients. NimbleRx is an on-demand digital-prescription platform that was designed to help independent pharmacy deliver to their patients. In addition to NimbleRx, a handful of other “disruptors” have focused on the space, albeit with unique strategies, including Capsule, NowRx, Zipdrug, and Alto.
As these services go national and are picked up by PBMs and payors, independent pharmacies are at risk of losing their prescription volume. Although NimbleRx was originally created to serve independent pharmacies, it could very easily be acquired by a PBM or a national pharmacy, potentially diverting all of the volume built on the platform. The true value of these networks is, simply, patient files.
Amazon’s PillPack was just the beginning: read our take on the acquisition here.
One such recent example of new pharmacy startups being highly valued acquisition targets is Zipdrug. Zipdrug was started 5 years ago to connect patients and pharmacies. Their model is to make money by charging health plans for improving adherence, focusing specifically on Medicare Advantage patients. Last month, they were acquired by Anthem’s PBM, IngenioRx, so that they can sell those services to health plans as part of its offering or as a standalone pharmacy service. Now, Anthem will likely be able to divert at least some of those prescriptions to their own PBM’s pharmacy, IngenioRx.
These new pharmacy startup entrants are just an addition to other headwinds, including telemedicine.
Not All Bad!
At the end of it, independent pharmacies provide a valuable service including to the most vulnerable population. Even with these headwinds, traditional pharmacy is having mixed success in protecting their business model via legal battles and public policy: the US Department of Health and Human Services (HHS) is allowing pharmacists to administer pediatric vaccines and COVID-19 testing during the COVID-19 epidemic. These measures were passed under the Public Readiness and Emergency Preparedness Act (PREP Act), designed to address the COVID-19 pandemic.