Back in 2019, it was projected that e-pharmacies would be worth $107.53 billion by 2025.
Since that year, things have undoubtedly changed–which is an understatement, to say the least. The digitization of healthcare has come fast and furious during the pandemic, from virtual appointments to self-diagnosis tools.
It’s only natural the pharmacies would embrace these changing tides. In fact, the digital pharmacy space is expected to outdo those initial 2025 projections.
With technological transformation comes disruptions to the older ways of doing things.
As such, before looking at the pros and cons of digital pharmacies, this blog will discuss what the industry’s disruptions look like:
How Are Digital Pharmacies Disrupting the Healthcare Industry?
Many digital pharmacies still run one physical location. It’s a strategy that sounds more old than new. But it has a valuable purpose: allowing these businesses to stay in a PBM’s network, helping with factors such as prescription safety.
Really, the one physical location offers security and stability, so these businesses can innovate on a more solid footing.
Beyond that, digital pharmacies typically offer home delivery for individual prescriptions.
Furthermore, instead of 90-day maintenance prescriptions, digital pharmacies tend to work off a 30-day prescription model. They also provide mobile apps, allowing customers to manage their profiles and accounts. And these applications let consumers order refills and schedule deliveries.
Lastly, digital pharmacies typically provide telehealth consultations for their clients.
On the whole, these disruptions are positive–but there’s more to this transformation than what meets the eye. With that notion in mind, this blog will take you through some pros and cons of digital pharmacies:
The Pros of Digital Pharmacies:
Take a look at the story of digital pharmacy startups discussed below, and you’ll enjoy a tale of eyebrow-raising revenue growth:
After launching in 2017, Ro has collected $250 million-plus in revenue, raised an extra $200 million, and is valued at over $1.5 billion.
Then there’s Hims & Hers, whose revenues were a mere $27 million in 2018. By 2020, that number jumped up to $138 million and is projected to increase to $233 million come 2022. This past January, Hims & Hers went public through its merger with Oaktree Acquisition Corp. As a result, the company’s market capitalization went from $1.6 billion to $4 billion.
Attracting Top-Tier Players
Recently, Carezone’s digital prescription technology (not the company itself) was purchased by Walmart.
DivvyDose, a small-sized pharmacy specializing in unit-dose packaging (similar to Amazon’s PillPack business), was sold to UnitedHealth Group’s OptumRx business.
And Deliv, known for its same-day prescription-delivery service called Deliv RX and raising $80 million-plus in funding, was purchased by Target.
The key takeaway? Digital pharmacies innovating game-changing tech stand to profit through the interest of major players.
The Main Con of Digital Pharmacies: The Industry Currently Limited to More Niche Product Categories
Yes, the digital pharmacy space has combined telehealth prescribing with direct-to-patient dispensing. And those who’ve seen the most success at the quickest rates do so through seamless, virtual services/products allowing patients to access prescribers.
These advancements have been inspiring to witness.
However, while it’s all impressive on the surface, these shifts have generally occurred with cash-pay prescriptions, involving lots of self-diagnosis. So, products and services for sexual health, hair loss, and help with quitting smoking have all done well–but it ends there.
On the other hand, new-to-therapy prescribing for more complicated medical issues hasn’t benefited at all.
Interestingly, the shift toward telehealth and virtual care in 2020 led to far fewer initiations for new therapy.
This current trend suggests that digital pharmacies pay a perfect complement to physical locations.
Adding a digital branch to broader services allows for more options, whether for easy-to-handle issues that telehealth can handle or need to visit in-person for complicated problems.
For your organization to thrive in the future, you need people who are on top of these shifting industry trends. You can find that cutting-edge, high-performing talent by contacting Remedy Group today.