PillPack Takes On CVS And Walgreens By Mail, Launches A Full-Service, Subscription-Based Online Pharmacy

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According to studies from the Mayo Clinic, more than 20 percent of Americans take more than five prescription medications each day. This fact goes a long way to showing how big of a role the pharmacy has come to play in millions of lives. While managing prescriptions, medications, and one’s healthcare is critical, it also happens to be far from easy. No one likes these.

While earning his diploma at pharmacy school, TJ Parker met Elliot Cohen through MIT’s Hacking Medicine program, and the two decided to run an experiment, through which they hoped to prove that managing medications could actually be far more simple than the process most Americans wrestle with on a daily basis. However, the two quickly learned that in order to tackle the friction within the pharmacy system in the U.S. and truly provide a better alternative, they would have to go beyond apps and smart pillboxes and actually build a better pharmacy from the ground up.

After graduating from TechStars Boston early last year, Parker and Cohen finally unveiled the result of their experiments in PillPack — a full-service, fully-licensed online pharmacy. After a year of development, the startup opened up early access this fall to pilot the program with a group of early customers, and a few months and tweaks later, PillPack is today ready for its full-scale launch to the masses. Well, the masses of Americans taking more than five prescription meds each day.

To put a fine point on it: As of today, PillPack is now available (read: Licensed) in 31 states, with additional states expected to roll out over the course of 2014.

That’s all well and good, but, how exactly does it work you ask? Essentially, the program allows customers to have their medications shipped two them every two weeks in a (yes, two-week) roll of individual packets that are organized by time and date — rather than using those standard, ubiquitous bright orange pill bottles. Beyond their prescriptions, customers can also sign up to receive any over-the-counter medications or vitamins that they happen to be taking on a regularly basis as part of each shipment.

Once they’ve established which prescriptions, over-the-counter meds and vitamins they want to receive every two weeks, shipments are sent to their doorsteps, with cocktails arriving in a chain of “dose packs,” each pack assigned to a different of the week — all of which comes pre-packaged and linked together in a recyclable roll.

Each package comes with a clear label and an image of the medication inside. While PillPack is limited to shipping prescription medications in the 31 states in which it’s currently licensed, the startup can ship over-the-counter meds and vitamins in all 50.

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However, while shipping medications directly to customers’ doorsteps is a good first step, as anyone regularly taking doctor-ordered medications will tell you, the real key is ensuring that they get their prescription on time, and actually take those medications on time. To assuage any potential concern among American pill-poppers, PillPack guarantees that those shipments will arrive on time.

Leveraging the resurgence of the subscription model among digital startups and consumer product companies, PillPack offers its program for a monthly fee of $20/month (plus co-pays), which includes unlimited shipping so that additional meds can be sent anytime. Generally speaking, the founders say, the co-pay charge included in the fee stay the same, and the startup now accepts “most major prescription insurance plans, as well as most forms of Medicare Part D.”

Furthermore, because refills and subscription renewal planning tend to be the most time-consuming aspect of the pharmacy routine, PillPack offers a feature called “Proactive Refill Management,” which essentially assigns one of the startup’s on-staff pharmacists to monitor and coordinate each of your refills and renewals ahead of time. The startups also rotates its bullpen of pharmacists such that someone is “always on-call for 24/7 support” and available to answer questions or handle emergencies, the company said.

As it looks to continue scaling its online, over-the-mail hybrid pharmacy and follow-through with licensing in the remaining 19 states not yet signed on, PillPack has taken on $4 million in venture financing to help it get there. The startup’s latest round of funding — a $3.5 million in Series A round, which closed last summer — was led by Atlas Venture, with participation from Founder Collective. The round followed close on the heels of a $550K seed round of angel funding raised shortly after it graduated from TechStars in May of 2013.

While early test runs have been promising, the founders say, the key to PillPack’s future success will be in how well it’s able to maintain a simple (and quality) customer experience, while ensuring on-time shipments and 24/7 support as it scales and usage increases. The founders believe that by spending time building a sophisticated back-end system to help it manage and process orders, and by combining technology with pharmacists that review each prescription and over-the-counter cocktail before it ships, it will at the very least have a leg-up on the complicated, confusing, and time-consuming world of the brick-and-mortar, American pharmacy.

For more, find PillPack here.

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