Founded eleven years ago, GoodRx has spread out to become one of the largest providers in the online healthcare industry.
What Is Good Rx
GoodRx Holdings, Inc. is an online healthcare service that provides consumers with access to discounted prescription drugs and digital healthcare services. The business is segmented into four platforms: GoodRx Gold Subscriptions, GoodRx Prescriptions, GoodRx Care Telehealth Marketplace, and GoodRx Manufacturer Solutions.
GoodRx is a marketing platform founded in September 2011 by Trevor Bezdek, Doug Hirsch, and Scott Marlette. With its headquarters in Santa Monica, CA, GoodRx has a dedicated following, with its high-rated app being one of the most downloaded medical apps in the recent past.
The idea for starting GoodRx arose when Doug Hirsch wanted to purchase some prescription drugs and noticed massive discrepancies in pricing among various pharmacies. This led him to approach Trevor and Scott, who helped launch GoodRx. Its growth and success attracted users and investors, and in 2019 it acquired HeyDoctor, the provider of online medical services.
In 2020, the firm went public and has since made key acquisitions like RxSaver and HealthNation. Currently, GoodRx has a traffic of over 18 million monthly users.
The company’s mission is to expand healthcare access and make it more affordable by allowing consumers to compare drug prices and connect them with cheap medical service providers.
Goodrx’s Business Model
GoodRx is a company that acts as an intermediary between drug manufacturers, consumers, pharmacies, and healthcare providers. Its business model is based on a software application and a website that allows users to compare prescription processes in over 70,000 pharmacies across the US, thereby helping its customers make huge savings on prescription drugs. Currently, the platform attracts customers by offering affordable online medical supplies. Pharmacies and medical suppliers pay a fee to access GoodRx users, which enables the company to earn revenue.
The company also creates discount codes for users to earn fees when a consumer redeems discounts or schedules an online medical appointment via that channel. Healthcare professionals also use GoodRx to acquire discount codes for their patients.
Still, GoodRx acts as a marketing platform by helping pharmaceutical companies to promote their brands on the GoodRx platform. Pharmaceutical companies spend millions each year reaching out to patients and healthcare providers. GoodRx is an active player in this process and receives a commission from professionals who get patients on its platform. GoodRx’s business model revenue is based on its earnings from commissions.
Goodrx’s Customer Segment
Customer segments are the business model canvas’s first and most fundamental block. Customer segmentation can make the difference between a company canvas’s success or failure. It consists of a group of customers to which you plan to sell your products or services. GoodRx has segmented its customers based according to their needs, demographics, motivations, behaviors, and preferences. A company has the choice and can target an individual or multiple groups through its products or services.
No company can thrive without customers. That’s why the focus of a business is mainly the customer. Companies need to segment customers into groups and create solutions for customers’ arising challenges. These groups should bring together people with similar goals and interests to make it easier for a company to visualize and reach each target market.
GoodRx’s customer segment comprises of: –
The first group includes price-conscious individuals who want to compare prescription prices before purchasing drugs. It also has people who need online healthcare services.
Another customer segment includes pharmacies that want to market their solutions to GoodRx’s broad customer base.
Once a company selects and segments the group it wants to serve, it can create a value proposition and start a business model appropriate to meet its customers’ needs.
Goodrx’s Value Proposition
‘GoodRx’s value proposition comprises of:
GoodRx’s solution involves comparing prices online without the inconvenience of moving from pharmacy to pharmacy and trying to compare prices. It also involves the convenience that comes with accessing medical attention from the comfort of your home.
Business owners can extend their customer base and directly market to a specific audience in an organized manner.
How Does Goodrx Make Money?
Coupons are the most significant revenue stream for GoodRx. They account for about 90% of all revenue earned. Consumers apply for them when they are filling in a prescription. These coupons are acceptable across numerous pharmacies in the US. Over 70,000 pharmacies across America accept coupons and extend discounts to GoodRx members.
GoodRx earns an income from fees paid by Pharmacy Benefit Managers (PBMs) when customers use the firm’s discount codes to buy medication or access its digital platform to request online medical services. The role of pharmacy management companies is to handle prescription drug processes for Medicare drug plans, health insurers, or large-scale employers. When a consumer redeems a GoodRx discount coupon, the pharmacy pays PBM a fee, which it shares the benefits with GoodRx.
GoodRx generates income from consumer membership and marketing fees from pharmaceutical institutions that use its platform. Through GoodRx Manufacturer Solutions, the company earns revenue from pharmaceutical manufacturer partners who pay to market and integrate their cost-effective solutions on the GoodRx platform. Pharmaceuticals advertise their brands while offering discounts to customers. GoodRx charges them a fee in exchange for the exposure they are receiving for an agreed period.
GoodRx has two subscription plans:
- GoodRx Gold
- Kroger Rx Savings Club
GoodRx is a subscription plan that ensures members get drugs at lower rates helping them to save on their prescriptions. Subscribers can get discounts on over 1,000 prescription drugs and healthcare services in exchange of a monthly fee. The company also provides free home delivery for some medications. Individual customers can subscribe at a monthly cost of $5.99, while families of up to five members can subscribe for a $9.99 monthly rate.
Kroger Rx Savings Club
Kroger Rx Savings Club is a partnership between Kroger and GoodRx. It has an annual plan of $36 for individual customers and $72 for up to six family members. Customers can access lower prescription prices if they make their purchases at Kroger pharmacies.
4. Prescription Transaction Charges
GoodRx prescription platform works when users sign into the website and provide their location and the drug they want to purchase. A list of pharmacies near you that dispense that drug appear, together with the prices each pharmacy charges. Immediately after, you’ll be able to see the “get free coupon” button. Once you click on it, a discount voucher appears, which you can send to your phone by text, email, or print it out. Present the discounted coupon to your pharmacy to receive your drugs at a discounted charge.
GoodRx prescription service thrives as a welcome alternative because pharmacies take advantage of and charge exorbitant prices for their cash-paying customers.
5. Telehealth Charges
GoodRx Telehealth is a service that helps users to search and compare online pharmaceutical suppliers who GoodRx has vetted. These providers can make remote diagnoses, refill existing prescriptions, and provide access to some medical lab tests.
GoodRx provides medical checkups through HeyDoctor and has a marketplace for third-party medical services. The telehealth fees and commissions are charged to generate revenue for GoodRx. The company also generates revenue from consultation fees. If GoodRx doctors don’t offer a service, patients can access the marketplace and select a third-party medical provider. The company receives a commission whenever GoodRx assists an independent medical practitioner to acquire a new patient. Visits start at $19 and don’t require any insurance coverage. The marketplace facilitates medics to offer services on the platform.
6. GoodRx’s Channels
The first step in developing a business model is defining the customer segments and the value propositions that match that target audience. Once you complete this, you should establish the distribution channels. This distribution channel refers to how a company intends to deliver its value proposition to each customer segment.
A channel is the organization’s path to reach out and communicate with its customers. It is the link between an organization and the public. Finding an appropriate distribution channel to reach clients is supreme because a proper selection will ensure your value proposition gets to the target market.
GoodRx’s channels comprise of: –
- Software applications
- Company website
Goodrx Customer Relationships
A business model’s efficient customer relationship block heavily relies on customer segments. This is because customer segments depict the kind of relationships the company must establish with each previously outlined segment.
This block will dictate the nature of each relationship, which will significantly impact the overall customer experience and, as a result, their level of fulfillment leading to brand loyalty.
GoodRx’s customer relationships include:
- Customer care unit
- Social media
- Digital and traditional marketing
- Word-of-mouth referrals
1. Mayo Clinic
The Mayo Clinic is a famous American academic medical center that manages clinics and hospitals. Through coordinated initiatives, Mayo Clinic is unlocking technology to achieve new strategies with a global impact. The seamless healthcare system revolves around physicians and scientists collaborating across health centers. The clinic is well known to be the very best in handling:
- Diabetes orthopedics
NowRx is an on-demand digital pharmacy that has utilized technology to create a pharmaceutical ecosystem that ensures customers don’t have to leave home to get their prescriptions sorted. This e-pharmacy uses automation and robots that assemble prescriptions fast and efficiently. The company has a centralized platform where customers can manage their medications.
3. Doctor on Demand
Doctor on Demand is a telehealth service that allows you to connect face-to-face with a doctor, psychologist, or psychiatrist via video on your iPhone or iPad. It is made available with or without insurance and at minimal rates through established employers and most health plans which support the service. This telehealth platform provides round-the-clock on-demand access to online doctors, prescriptions, or referral letters. There’s no need to wait for days for a doctor’s appointment or sit at the waiting bay waiting to be served. The online services provided include:
- Doctors appointment
- Specialist referrals
- Online prescriptions
- Pathology referrals
- Medical certificates
4. Consumer Value Stores
CVS Health is a leading chain of retail pharmacies that sells health and beauty products to ensure efficiency in delivery and long-term medical care. Launched in Lowell, Massachusetts, by two siblings, Sidney and Stanley Goldstein, and their partner Ralph Hoagland. They offer a service that helps people navigate the healthcare system by improving access, minimizing expenses, and maintaining loyalty. There are some medical conditions that you can test at any CVS establishment. These include:
- Sickle cell
- Down Syndrome
- Cysts fibrosis
- Edward syndrome
5. Amazon Pharmacy
In November 2020, Amazon launched its online pharmacy that deals in mail-order prescriptions. You can easily shop for your medicines, as all you need is:
- A prescription
- Insurance information if you intend to use it since Amazon works with most insurance plans
- Your prescriber’s name
Some benefits you get from partnering with Amazon Pharmacy include:
- Six months or 30 or 90-day supply option
- Managing your child’s medication
- Pay with Prime and save up to 80% and save on medications
- 24/7 pharmacist on-call service
- Automatically refill your prescription.
6. UnitedHealth Group
Besides digital health, United Health Group is an extensive medical stakeholder that helps people to live healthier lives by improving efficiency in the health system. The platform is committed to advancing health equity by expanding access to care, streamlining healthcare affordability, and striving to achieve better outcomes.
GoodRx competes with established brands like Mayo Clinic, Amazon Pharmacy, and UnitedHealth Group.
Upcoming businesses and startups can easily copy GoodRx’s business model and create unfair competition.
GoodRx has an incredible opportunity to diversify through mergers and acquisitions of companies offering related healthcare services.
GoodRx has excellent expansion prospects due to its easy-to-adapt-business model that it can replicate in other locations.
- GoodRx’s business model is easy to replicate at a minimal cost which may create unfair competition.
- There is a vulnerability to governance pressure in the pharmaceutical and healthcare industries that can negatively affect the business.
- Sometimes customers are dissatisfied with the service as some claim that pharmacies don’t always honor discounts.
- Discount card pricing sometimes differs from the rates indicated on the coupons.
- Huge savings on generic prescription drugs.
- Accepted by many pharmacies in the US
- One of the most dependable service providers in the online healthcare industry.
- It has a good reputation as it has helped Americans save a lot of money.
Goodrx’s Major Partners
Critical partners in a business model include stakeholders who join forces to form a business relationship that may be limited, unlimited, or exclusive. Business owners create partnerships for various reasons, from reducing risk, optimizing a business model, or increasing funding.
Types of Key Partners
- Joint Ventures
Joint ventures help develop startups that need to penetrate new markets or create brand awareness in a new region.
- Buyer-Seller Relationship
A buyer-seller relationship is the most popular partnership that ensures a reliable supply of goods or services.
Strategic alliances happen between organizations with a common goal that benefits both sides.
Benefits of Partnerships
While partnerships aren’t simple to navigate or streamline, they are helpful in several ways, including: –
- Risk Reduction
A competitive business environment that is prone to change brings about many risks. For a company to minimize these risks, businesses are sometimes forced to enter into partnerships to mitigate any arising challenges.
Practically, a company can’t have all the resources it needs to operate smoothly.
- Resource Acquisition
Generally, startups and businesses under expansion need resources, knowledge, documentation, permits, and licenses, which require time and financial investment. Companies form partnerships with more established brands that are ahead in infrastructure in systems, workflows, information, or experience.
Goodrx’s Cost Structure
The cost structure plays an essential part in any business model. It is the final stage block because all the previous components must be in place to help us estimate the cost of each segment. Creating a value proposition, handling customer relationships, and developing revenue streams are processes that generate overhead expenses. Each business model has its cost structure depending on the product or service the business engages in and the factors directly affecting it. GoodRx’s cost structure comprises of: –
- Product creation
- Human resource
- Sales and marketing
Born from a solution to a challenge from one of its founders, GoodRx has grown to become an established business in the healthcare industry. The firm continually strives to gain recognition as a problem-solving brand that can create solutions that improve the quality of healthcare in a cost-efficient way.