In a month where the company’s stock has fallen to an all-time-low, GoodRx’s leadership still says they’re not worried about Amazon Pharmacy. The discount pharmacy startup’s stock recovered 10% to about $31 on Friday, still below its IPO price of $33.
After raising more than $1 billion in an upsized IPO last year, GoodRx shortly faced a big obstacle: Amazon.
In November, the online retailer rolled out a service for users to buy prescriptions and have them delivered to their homes. A more direct threat to GoodRx’s business, Amazon also shared it would give users the ability to compare differences in drug prices with their insurance co-pay, without insurance, or through a separate cash-pay discount option for Prime members.
GoodRx leadership continued to minimize the threat in a Thursday earnings call. CFO Karsten Voermann said that mail-order prescriptions still only make up about 5% of fill count in the U.S., increasing a little bit during Covid-19 lockdowns.
As for Amazon’s drug discount card, she viewed it more as a marketing tool for its mail-order pharmacy services, though people can also use it to get drug discounts at in-person pharmacies, similar to GoodRx’s business model. The program is administered by Inside Rx, which also partners with GoodRx across several retailers.
“As we said in the past, we believe the PrimeRx card was launched to enable Amazon Pharmacy to display third-party cash prices, not because they actually are trying to send consumers away from Amazon to competing retailers to fill their prescriptions, which is against sort of their fundamental business model,” she said in a Thursday investor call. “Our view had not changed.”
Citing third-party data, GoodRx co-CEO Trevor Bezdek said the company has seen “almost no” usage of Amazon’s PrimeRx drug discount program in retail, and that it accounts for a small portion of mail-order prescriptions.
“I think as time passes, people’s concern about Amazon has only decreased,” GoodRx he said during the call.
For some investors, that’s still not the case. A class action lawsuit filed in December alleges that the company failed to disclose to investors that Amazon was developing its own online prescription service. Shareholders filed derivative lawsuits with similar allegations in April and May.
The company’s earnings and future outlook were a bit tepid. The company brought in $160.4 million in the first quarter, up 20% from last year, but slightly short of expectations. Its net income of $1.7 million was down 94% from last year, but this was mostly attributed to big stock awards made to company leadership, including $30 million in stock to its co-CEOs, after going public.
In the meantime, GoodRx is bulking up through a string of acquisitions. In April, it bought HealthiNation, a startup making health video content, and RxSaver, a price comparison platform that works with PBMs to negotiate discounts.
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