Are you really getting the best deal for the medicines you are purchasing? Do you wonder if your neighborhood pharmacist or some other different pharmacy charges extra from you? GoodRx is the solution for you that caters to all healthcare needs under one roof. Let’s find out more about it!
What is GoodRx and How Does It Work?
GoodRx is a major PBM (pharmacy benefit manager) operating in the USA for the past 10 years. The public recognizes it as the best solution for getting affordable medicine, diagnostic tests, and cheap consultation appointments with top doctors in the country.
According to reports, the company has a user base of ~8 million people in the country on a monthly basis. The COVID period was ironically a breakthrough for the company when it won the trust of millions of Americans with its high quality and punctual services. According to the CEO Trevor Bezdek, many companies have tried copying GoodRx’s business model but none has been successful.
The working model of the company is aimed towards making the brand a complete provider in the healthcare sector. Doctor consultations, medical tests, and medicine delivery, precisely every need of the industry is catered to by the company. The company is not limited to just providing these services. The USP is to provide dependable, cheap, and comfortable services to all customers.
How Does GoodRx Make Money?
GoodRx makes money from a number of sources, such as telehealth services, GoodRx gold subscription fees, transaction fees, and advertising!
However, the company’s two primary revenue streams, according to the official GoodRx website, are referral fees given by the partnered pharmacies & participating pharmacies and adverts on the app and website.
Let’s take a closer look at GoodRx’s business model and revenue streams now!
Telehealth Services
GoodRx provides special treatment to GoodRx Gold members. This is a paid program that offers telehealth services like online doctor visits and counseling sessions.
Even the user can get himself a prescription along with a GoodRx prescription discount card that he can show at the local pharmacy shops and get medicines at a good discount and thus save money!
From conditions like acne, and high cholesterol to UTI, many diseases can be consulted using GoodRx telehealth services. Moreover, the user has to pay a nominal fee of $19/visit at the time of booking the appointment. GoodRx claims to provide the most affordable telehealth services but no wonder it must be making ample money out of them.
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GoodRx Gold Subscription Fee
The GoodRx Gold membership plan is one of the hidden schemes through which the company earns its revenue. Not that it is a Ponzi scheme fooling the users, but the company has found its way to benefit both the customers and itself through it.
The membership comes in two plans namely, Individual and Family. The individual plan includes more benefits than the other one like Telehealth services which are online consultations with doctors. The company aims at launching the same for the family plan holders too.
Coming to the pricing structure, the Individual plan costs $9.99/month and the Family can be availed at $19.99/month. Considering the lower price of these plans as compared to others, they are highly beneficial and worthwhile.
Transaction Fees
This is more of a commission charged by GoodRx from its client pharmacy stores. These clients have to pay a certain amount as referral fees whenever any user turns up with a GoodRx discount code. This is to acknowledge that the sale made to the customer was due to the involvement of GoodRx as a medium.
Considering the revenue earned by the company, 82% of the total contribution comes from the referral fees earned by the company. The company acts like a pharmacy business manager (PBMs) and negotiates over the pricing of medicine due to which it is able to offer such low-cost deals to its customers, helping them in saving a lot of money. In return, it charges fees from the pharmacists for providing such a high customer base.
Advertising
Advertising is the default source of revenue for any popular business in the market. Using the customer base as leverage, the company earns massive amounts as advertising fees from partner brands who use its platform.
Popular brands collaborate with the company and run campaigns, poster ads, and even discount offers for attracting GoodRx customers towards them. The customers too feel it safe and useful to give a try on these offers considering GoodRx’s brand value and goodwill.
Quick Note: GoodRx Care is another source of income besides the ones already mentioned; with it, customers can set up a private appointment with a licensed healthcare professional via text, phone, or video chat and pay a fee for the service.
History Of GoodRx
Founded in Santa Monica, California, in 2011 by Trevor Bezdek and former Facebook employees, Doug Hirsch and Scott Marlette, GoodRx Holdings Inc. is a telemedicine company leading the drug supplier industry in the USA.
As per the CEO Doug Hirsch, the venture was started to relieve Americans of the abrupt prices offered by different pharmacy stores on the same set of medicines.
Given the vision, the company has been able to progress rigorously in the drug industry. People have been heavily relying on it for their healthcare needs. The GoodRx app has 10 million+ downloads on the PlayStore and about a million+ downloads showing people’s trust in it. The drug company has partnerships with popular brands and more than 70000 participating pharmacy stores.
The company’s past has been spotless except for the incident in 2020 when there were minor allegations against the company for illegal usage of user data.
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Revenue, Funding, and Valuation
GoodRx got listed in 2020 with the name GDRX. The company has been performing exceptionally well, outclassing any of its competitors. This year’s revenue stands at ~$600 million with a whole quarter remaining to be added. The last year’s figure was $745 million which was a big 26% jump from the previous figures of $545 million.
These numbers show how well-focused the company has been toward its growth. Not much time is left before the company crosses the $1 billion mark. In order to accelerate its growth, the company has acquired many ventures in the past, the most recent one being VitaCare in March 2022.
Coming to the Funding details, according to Crunchbase, GoodRx has undergone 5 rounds and raised over $910 million to date. Its list of investors includes big names like Silver Lake, TCV, Francisco Partners, and Spectrum Equity.
Currently, the company’s valuation stands at $1.9 billion and has a market cap of $2 billion!
Source: Dealroom
Top 5 Competitors of GoodRx
Here are the top 5 competitors giving head-on competition to GoodRx today!
CVS
It is the leader of the drug industry in the USA. The company was founded in 1963, in Lowell, Massachusetts. Originally known as the Consumer Value Store, CVS pharmacy is the most trusted name in the healthcare sector. The company has a revenue of more than $1 billion and owns subsidiaries like MinuteClinic, Aetna, etc.
WebMD
Another useful resource for finding information related to generic drugs and other health issues. This company was founded in 1996 in New York and is the parent of the famous industry player Rxlist. The company generates more than $500 million in revenue and is a key competitor of GoodRx. It is the most trusted resource for getting any information related to the healthcare sector.
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Capital Rx
A PBM like GoodRx was founded in 2017 in New York. The company aims at expanding its business across the country. Currently, the company has an annual revenue of ~$25miilion. Capital Rx claims to be the fastest-growing health tech company in the country. The company has recently closed Series C funding and is growing rapidly in the drug supplier industry.
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NowRx
Founded in 2015, in Mountain View, California, NowRx is another popular player in the drug industry. It aims at providing prescription medication at the lowest price to consumers. Its USP is free same-day prescription delivery and it has been able to establish itself as an alternative for the public. The company generates ~$25 million in revenue annually and is supported by strong investors.
SingleCare
Founded in 2014, in Boston, Massachusetts, the company has grown rapidly in the drug industry. Like GoodRx, it offers prescription discounts to customers regardless of their insurance status. The company’s annual revenue is ~$5 million and it can prove to be a threat in the coming years.
^Apart from the ones mentioned above, other main competitors include, Cost Plus Drugs, Optum Perks, RetailMeNot Inc, Campus Books, and Honey Science LLC!