How a pharmacy delivery startup has capitalized on the coronavirus pandemic
'Its like living years in weeks' for pharmacy delivery company ScriptDrop.
Like many people, Nicholas Potts feels as though the coronavirus has warped time—that he’s lived months in days.
For Potts, the founder and chief executive of ScriptDrop, a technology company that enables pharmacies to deliver prescriptions to customers’ homes, the coronavirus pandemic has meant a seven-fold increase in order volumes—and the execution of a multi-year business plan in just six weeks.
Potts founded ScriptDrop in 2016 in the not-so-trendy tech hub of Columbus, Ohio. The company sold software to pharmacy networks and established integrations with the prescription management software pharmacies use to run much of their business. The company partnered with specialized courier services, all of whose drivers had to be compliant with the Health Insurance Portability and Accountability Act (HIPAA), for same day delivery. ScriptDrop charged the pharmacy a fee for each delivery, which the pharmacy either passed on to the consumer or chose to absorb.
ScriptDrop was growing rapidly, Potts says, but it was a strictly business-to-business company. It didn’t have a consumer facing app or interface—although one was on the company’s long-term roadmap, Potts says. “We had built a pilot app and tested it about 6 months ago,” he says. “But we weren’t planning on rolling it out yet.” With its B2B model growing so quickly, there seemed little reason to complicate life with a consumer-facing service.
Then the coronavirus pandemic hit. Suddenly a trip to the pharmacy, an essential journey for those with chronic health conditions, became potentially fraught with peril. And with social distancing measures taking effect, more and more pharmacies wanted to offer home delivery. In addition, busy pharmacists wanted to make it simpler for a patient to initiate a delivery request, rather than relying on the pharmacy to inform the customer about the service.
So ScriptDrop accelerated its business plan, sprinting to put in place a consumer-facing ordering system. “It has been a lot of long days and long nights for a lot of the team,” Potts says.
In the end, he says, the company decided against making its already built pilot app the centerpiece of its new consumer-facing offering. Instead, patients can just text the word “DELIVER” to a number on their phone—helpful for older people who might not be proficient at installing apps—and walk through a series of messages that will route their order to whichever pharmacy the patient wants to use.
The patient provides their prescription and insurance information, pays their co-pay, if needed, and a delivery fee. For most addresses in the U.S., ScriptDrop can provide same day delivery if an order is placed before 11 a.m.
With the coronavirus pandemic, the company has instituted a nationwide pricing plan: $8 for same-day service, as long as the pharmacy is within 5 miles of the delivery address. “Ninety-five percent of the country lives within 5 miles of their pharmacy,” Potts says. As before, the fee is charged to the pharmacy, which can pass it on to the customer or absorb it.
The company contracted with UPS and FedEx to handle deliveries nationwide for less time-sensitive prescriptions, as well as expanding its network of HIPAA- compliant local couriers. It’s even started helping courier companies screen prospective applicants for jobs as drivers. “We now have 15,000 drivers available, and we’ve had thousands of drivers apply through our website,” Potts says.
ScriptDrop gives the pharmacies special packaging for prescriptions, with an outer label containing only the patient’s name and address, preserving their privacy. If there’s room in the package, Potts says, pharmacies can include over-the-counter medication or other items in an order, too.
Before the outbreak, ScriptDrop required its couriers to view a patient’s identity documents, like a driver’s license, and take a signature. Now it allows it couriers to simply place a prescription on a doorstep or front porch—although they still ensure someone is there to pick up the package, usually coordinating with the recipient by phone.
In the midst of explosive unemployment, Potts has spent much of the past few weeks hiring. The company started the coronavirus pandemic with 90 employees—but Potts says he thinks it will have double that number within five weeks. Its order volumes have already surged at least 600%, and he says he expects another 200% to 300% in the next month. The company had expected to do $30 million in annual sales this year, but now Potts thinks the figure may be even higher.
To date, ScriptDrop has raised $26 million in venture funding, from backers that include angel investors, the Ohio Innovation Fund and Chicago-based venture capital firm M25.
Potts thinks one benefit of the pandemic is that it may convince tech investors, particularly those in Silicon Valley, who often insisted they would only invest in companies in their backyard so they could have lots of face-to-face contact with the founding teams, to look further afield for promising startups.
“I think the fact that everyone is having to work remotely is going to make investors more comfortable with people outside the traditional tech hubs,” he says.
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