Cheap-drugs platform GoodRx wants to be the Wirecutter for healthcare
Cheap prescription-drugs platform GoodRx is getting into the content business. The company is debuting GoodRx Health, a website that answers the most Googled questions about personal health. The move aims to make GoodRx more than a simple price comparison tool for pills, as Amazon’s pharmacy business looms large.
Amazon offers both an online pharmacy and price comparison, putting it in direct competition with GoodRx. While GoodRx insists that Amazon is not a threat to its business, a content platform stands to help it differentiate further from Amazon and build on its loyal following.
Thomas Goetz, chief of research and communications at GoodRx, says he sees the new health-information site as a cross between NerdWallet and Wirecutter for healthcare. It will provide answers to the most searched questions on everything from whether diabetes is curable to the effectiveness of coffee enemas. It will also advise people on financial matters related to health, like what Medicare program is right for them, or if they should buy pet insurance.
[Image: courtesy of GoodRx]
“If you think about what Wirecutter does for consumer products, they take an entire category, and they help people get to that one product that they may want to purchase,” he says.
GoodRx predominately makes money as a price comparison tool for drugs. It shows consumers where they can get the most inexpensive drugs and then offers them a coupon that they can use to buy their drug at a specific low price. The company in turn collects a referral fee from the pharmacy. It’s a strong business: Last quarter, the company made $144 million in revenue from its prescription business alone. It also has a prescription membership program that guarantees 90% off all prescriptions and a budding primary-care telehealth business called GoodRx Care.
During the pandemic, GoodRx spun up an additional array of features, including a telehealth marketplace, a listing of COVID-19 testing sites, and later a list of vaccination sites around the country. The company says its website gets approximately 20 million monthly visits. A former journalist, Goetz has hired a 50-person editorial team to build out content on the site. He think there’s an opportunity to provide better health information than what’s already available from places like WebMD, Mayo Clinic, and Healthline, by offering people definitive answers about their health questions based on published medical research.
[Image: courtesy of GoodRx]
“Those are first generation—it was the ’90s when those sites were created,” he says. “They have so much content that it’s hard to find the answer that you want.”
He also notes these sites live and die by their placement in Google search results. While Google’s algorithm “can be very complicated,” he insinuates that its goal is actually quite simple: “to reward the best content.”
GoodRx Health aims to do that by answering specific questions and providing tiers of answers depending on how deep the reader wants to go on the subject. It also summarizes the existing research on a topic and rates the available research on how thorough it is. For example, its answer to whether diabetes is curable is: no, but it may be reversible.
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For any answer it gives, the site will list which other medical entities agree with it. In addition to common health questions, the site will proactively debunk health myths and answer questions about the latest wellness trends. GoodRx Health also hopes that it can use this platform to connect patients with clinical trials and drug-assistance programs (a feature that would also bolster its ad revenue business).
[Image: courtesy of GoodRx]
How different people will find this offering from what currently exists is up for debate. Healthline, which was indeed founded in the 1990s, garners more than 300 million monthly visits, according to data from SimilarWeb. That means a lot of catching up for GoodRx.
But ultimately, GoodRx’s main competitor isn’t really these content platforms. The bigger problem for GoodRx, as the company is reminded nearly every quarter by inquiring analysts, is Amazon. The questions have become louder since the Everything Store launched its online pharmacy last year (replete with a price comparison tool). Amazon’s Pharmacy business, which delivers prescriptions, is a threat not just to GoodRx, but also to the traditional pharmacy model on which it’s based.
[Image: courtesy of GoodRx]
In August, GoodRx CEO Doug Hirsch told Bloomberg that Amazon doesn’t impact his business. “Our relationships with retailers have never been stronger—that’s one area where Amazon has had a positive impact on us—where the things we can do with both retailer and [Pharmacy Benefit Managers], the possibilities are limitless,” he said. PBMs negotiate drug prices with manufacturers on behalf of insurers. They profit off a nearly incomprehensible system of rebates that the National Community Pharmacists Association has said can drive up costs for consumers (the organization is currently advocating for legislative reform on how PBMs operate).
In 2019, it looked as though Amazon might contract directly with employers and insurers, effectively becoming its own PBM and giving it an opportunity to drive down drug prices in a way that might scare GoodRx. That hasn’t happened yet. Instead, as Hirsch pointed out, the threat of Amazon has given GoodRx better relationships with PBMs, and in turn, a low-pricing advantage.
Still, Amazon does compete directly with GoodRx, and it’s only getting bigger, especially as its employer-based primary care, Amazon Care, evolves. Getting into content may help GoodRx build up a larger loyal following faster. Regardless, investors will be happy to see the company build out its advertising revenue.