GoodRx CEO dismisses Amazon threat: Customers 'love to talk to a person in a white coat'

GoodRx (GDRX), which allows customers to compare prescription drug prices and find coupons at more than 70,000 U.S. pharmacies, has faced significant pressure in the markets since Amazon (AMZN) launched its discount priced online pharmacy last year shortly after GoodRx went public.

While some believe Amazon will put GoodRx out of business, or significantly take away market share, GoodRx executives continue to waive off concerns.

On one hand, GoodRx is partnered with Amazon through the pharmacy it acquired, PillPack. On the other, GoodRx is confident in its understanding of the discount market.

"Amazon wants to ship products to people ... in a pretty box. The reality is 5% are fills done by mail. Even when every American was shut in their houses last year, they didn't switch to mail order," GoodRx Co-CEO Doug Hirsch told Yahoo Finance.

Kaiser Family Foundation (KFF) found that mail order increased by up to 20% through the middle of 2020, compared to 2019, but KFF and Drug Channels Institute found growth stalled towards the end of the year.

"Customers do enjoy going to the retail pharmacy. They love to talk to a person in a white coat," Hirsch said.

But that hasn't stopped Wall Street from bracing for an Amazon takeover, similar to when the e-commerce giant joined forces with JPMorgan and Berkshire Hathaway in 2018 to form the now-defunct Haven venture which aimed to bring down health care costs.

In particular, because of Amazon's recent announcement to allow customers to check their co-pays for drugs before buying.

"It's not a real game-changer," Hirsch said. The data shows GoodRx is lower in cost both via the mail and in retail settings by more than 90%, Hirsch added.

While GoodRx just missed earnings estimates, the Street still sees potential.

Credit Suisse has GoodRx rated as Maintain Outperform and expects growth for the company to accelerate in the second half of 2021. Barclays and Raymond James maintained a Hold rating on the stock.

The company recently acquired Rx Saver and has launched into the telehealth space. It's stretching beyond simply discount drug pricing and aims to have a more robust operation, Hirsch said.

The company also announced a partnership with Sanofi (SNY) to deliver insulin discounts directly to customers, helping to bring down first fill costs.

Hirsch said the company sees potential in the second half of the year as prescription activity returns to pre-pandemic levels.

"There is incredible demand; it's late to come back but is now coming back," Hirsch said, noting there are studies estimating at least 1 billion undiagnosed conditions throughout the pandemic.

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