An Overview of Telemedicine and Direct to Consumer Online Pharmacy

We are experiencing a boom in new startups, and quickly growing larger companies, offering telemedicine and remote disease diagnosis and treatment. Companies like Roman and Hims have raised large amounts of venture capital funding to bring medical services into patients homes via the internet, apps and phone calls.


What is driving this boom in remote healthcare, and how do consumers benefit from this new wave of innovation?

The traditional medical establishment in the United States is great at providing care to insured people in major urban areas. But, it’s not so great at doing so at a reasonable cost. According to the Peterson-Kaiser Healthcare System Tracker, the annual US per capita spending is over $10,000 per person, while comparable countries spend just over $5,000. According to the National Association of Community Health Centers (the “NACHC”), 62 million individuals in the United States currently have no or inadequate access to primary care as a result of physician shortages.

Regulatory changes are starting to keep up with improvements in technology. These technology innovations allow for doctors to interact with, and help, patients remotely. Over ten years ago, some medical services begun to be possible remotely – mainly, radiological services could be offered safely, since the doctors who traditionally viewed these images often never had to meet the patient in person. Digital images were displayed to radiologists, who then provided the diagnosis to the patient’s doctor. Since the digital images could be electronically sent anywhere, some hospitals began to use remote radiologists to view their images. This was particularly helpful in rural areas, where hospitals could not easily staff qualified radiologists 24/7. Today, major telemedicine providers, like TeleDoc offer doctor visits via mobile devices, the internet, video and the phone. And an increasingly number of direct to consumer startups offer specific medical help in specific niches.

The startup telemedicine / direct to consumer landscape

Startup companies are discovering niches where they can combine telemedicine, lower-risk / generic prescription meds, slick direct to consumer marketing, with the high-friction primary care system. These disruptors are first attacking the men’s healthcare market, going after somewhat embarrassing male problems like ED and baldness. A major thesis behind this is that:

  • Men find talking about these problems embarrassing

  • Generic drugs are now available

  • Insurance does not always cover these non-life threatening problems

The solutions offered by these companies offer the following solutions:

  • Physician visits can be close to automated, with minimal to absolutely no live conversation between the doctor and patient needed AND the goods can be shipped discretely directly to the consumer’s home, removing the need to pick up the medications at the pharmacy and talk to anyone in person

  • Big pharma companies have paved the way by building brand awareness for their drugs, but now that these have come off their patents, cheap, completely equivalent medications are now available. The startups can offer these generics at substantially lower costs than what men are used to paying.

  • Even if insurances does cover these products, the high copays may make the generics offered by the startups cheaper, making men more likely to want to use an online provider. Additionally, the doctor visits are often free or bundled into the price of the medications, so that the all in cost for going online beats what a person would pay if they went to their doctor and used their insurance.

Venture funding in the online healthcare industry

These telemedicine startups have attracted a fair amount of venture capital funding. Here is a list of the funding, by startup.
Startup Funding Raised Current VC Round Major VCs
Hims $197 million Series C Redpoint, Founders Fund, SV Angel
Keeps $22.8 million Series A First Round, Greycroft
Nurx $41.1 million Series B 500 Startups, Shasta Ventures
The Pill Club $61.7 million Series B Y Combinator, Union Square Ventures, Kleiner Perkins
Ritual $40.5 million Series B Upfront Ventures, NEA, Founders Fund
Roman (Ro) $91.1 million Series A General Catalyst, SignalFire
Blink Health $165 million Series B 8VC
You can see other comparisons of these startups and their offerings, pricing, etc. Find our comparison of Hers vs. Nurx vs. The Pill Club here. And our comparison of Hims, Roman and Keeps is here.

What are some of the outstanding questions on the space?

This space is still in its infancy. There are many questions about the startups’ business models and how consumers will react to these offerings. Here are some of the biggest questions still outstanding:

Is bundling possible?

It’s unclear that an individual will want to get prescription hair loss, erectile disfunction and anxiety medicine from an online provider. It’s even less clear if it’s a good idea for someone with multiple health issues should get treatment from an online doctor, as there may be an underlying issue that should be diagnosed and treated in person by a primary care physician.

Will the doctors get the medical advice right?

The belief is that these online providers will be able to correctly (and safely) provide a diagnosis and treatment. The current crop of b2c telemedicine/pharmacy startups seem to have started with medicines that are well understood and have less adverse side effects. But will these doctors be able to identify the small number of patients who have serious underlying medical issues? What might happen if a patient had a serious problem that an in-person physician might have caught?

It's an exciting time in online healthcare!

Who knows what will be next, and which companies will take off! Hopefully these startups will be able to help fix some of the major problems in our healthcare system, and help patients live happier, healthier lives.

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