Pharmaceutical price-shopping platform GoodRx says it is pivoting to regain lost sales and customers now that it has settled a costly spat with a grocery chain’s drug store, but warned the process would take time to complete.
In announcing its second quarter earnings results and a cautious full year outlook Monday (Aug 8), the California-based company said its mission to bring Americans affordable healthcare via its subscription-based price discounting was very much intact, as its sales and subscriber base both grew despite the disruption from the grocer.
“We believe the current macroeconomic environment that increases many people’s need to trade off expenses as inflation rises, makes everything we do more and more relevant for all Americans,” GoodRx CFO Karsten Voermann told investors on the company’s earnings call, noting that weekly volume at the grocer chain was now down 85% and would not bounce back overnight.
“It takes time for changes in communication to reach the pharmacy and store level,” Voermann said. “It is unclear how many GoodRx consumers that switched to their insurance or another form of savings at the grocer during the second quarter will return to using GoodRx, And if they do return, how quickly that will happen,” he added.
See also: GoodRx Q1 2022 Performance Marred by Mystery Grocery Chain Prescription Beef
The Digital Path Forward
In spite of this warning and cautious sales guidance, investors celebrated the settlement and sent shares of GoodRx up as much as 50% in after hours trade Monday, and over 20% in early action Tuesday morning.
According to Co-Founder & Co-CEO Trevor Bezdek, to hasten that rebound, GoodRx is also working to stabilize its network and is prioritizing new services and product enhancements that will help members save money on healthcare in more ways while allowing the company to “increase its touchpoints” and play a more active role in all aspects of customers’ care.
“We believe the benefits of deeper relationships with our consumers will allow us to help them better navigate their healthcare journey with even more compelling GoodRx value proposition and user experience,” Bezdek said, noting that by allowing users to provide GoodRx with more information will increase the lifetime value (LTV) of each users’ prescription transactions and other areas.
To that point, Bezdek said the 30% of GoodRx revenues now come from non-core offerings, up from 55 three years ago, and that subscription revenues were up 82% from a year ago due to a significant number of members who paid a higher fee to upgrade to a Gold account.
In addition, GoodRx said it expects to see continued growth as more pharma ad spend shifts to digital as drug manufacturers recognize attractive returns on their marketing spend and look to leverage the platform’s broad provider and consumer audiences, which now include over 825,000 prescribers and more than 300,000 Healthcare Plans.
“We believe there is an enormous opportunity for us to meet providers’ unique needs with innovative solutions while helping them achieve better patient outcomes,” Rezdek said, “We believe we are on the path to becoming one of the largest provider platforms in the US,” he added, pointing to company’s unparalleled opportunity to deliver connect retail partners, physicians and manufacturers to educate and serve patients.
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