Columbus-based Gifthealth Inc. started this year aiming for $30 million in revenue. The company now expects to comfortably exceed that after $3 million in sales in the month of June alone.
The technology-enabled pharmacy has made its second acquisition, a drug wholesaler, to further speed its mission to help patients fill prescriptions faster and more affordably.
The startup projects $85 million in revenue in 2023, co-founder and CEO Nick Potts said. Within five years, he wants the startup on a path to IPO and serving millions of patients weekly.
Among the biggest contributors to the growth: colonoscopy prep kits.
So many gastroenterology practices have turned to Gifthealth to help patients get the supplies, the startup had to stagger onboarding, co-founder and President John Romano said.
"It's growing by leaps and bounds," Potts said. "We couldn't hire fast enough."
Gifthealth also is a general pharmacy, but specialized focus areas like the prep kits unlocked faster growth. Romano knew about the opportunity because of six years in sales with a pharmaceutical manufacturer focused on gastroenterology.
Jugs of the prescription laxative take up shelf space for low margin – and a procedure done every 10 years doesn't build patient loyalty, Romano said. Pharmacies often are out of stock, or stock only the generic when brand names work better.
"It's worth fighting for that patient," Potts said. "They end up canceling their procedure because they're frustrated."
And those skipped screenings mean more tumors aren't found early.
The next specialty of focus is eye surgery; Gifthealth assembles kits of eye shield and prescribed eyedrops, and is forming partnerships with ophthalmologists.
Gifthealth has 77 employees as of this week, after adding 10 with the wholesaler.
The startup raised a combined $6.5 million in venture capital since founding in November 2020, but has largely grown on sales. Other than a revolving letter of credit for inventory, Potts said, operations are cash-flow positive.
Potts and Romano, longtime friends, have said they hatched the idea for the startup at a backyard barbecue. Their mission: overcome "information asymmetry" for insurance coverage, pricing, inventory and other barriers to accessing needed medications.
Potts previously founded and was CEO of ScriptDrop Inc., a prescription delivery startup, but left after a health crisis and fallout with the board.
Several jobs back for both, Romano was once Potts' supervisor at a car rental agency. Potts recruited him to ScriptDrop, and Romano left three months after Potts to form Gifthealth.
CTO Derek Schneider also worked with both at ScriptDrop and with Potts in his previous job at CoverMyMeds. The personnel and product chiefs also followed Potts from past companies.
Like CoverMyMeds, Columbus' first billion-dollar-plus unicorn, Gifthealth depends on the network effect. The more pharmacies, drug manufacturers, telehealth companies and other points of the prescription process join, the more benefit each side gets. Those customers pay for subscription software, and pharmacies now can buy drugs from its wholesaler at a lower cost than through large distributors.
Essential nodes in the network are doctor and patient – who don't pay to use the software. Patients pay Gifthealth only if buying a drug direct from its pharmacy.
"We make their lives easier," Romano said.
How it works
The software integrates with electronic health records, and doctors customize the platform to send out their specific diet instructions to patients and automate text reminders of when to start preparing. Meanwhile its analytics draw on some 100 million past prescription claims to inform its model for finding the best price and available inventory.
Gifthealth early last year bought a pharmacy on Bethel Road, where on weekends it administered thousands of Covid-19 vaccines. The pharmacy is mainly a learning laboratory for the software, but it can ship mail-order drugs when there's nothing in-stock near the patient. The software also can transfer prescriptions to a network of member pharmacies, or fax to an outside pharmacy.
"We can take care of the patient no matter the path they need to go for that prescription," Potts said.
One patient was told insurance would not cover a drug, costing them $5,000 a month. After the doctor transferred the prescription to the Gifthealth platform, its software not only found the correct code to obtain the insurer's authorization, but a voucher that reduced the patient's out-of-pocket monthly payment to $10.
"It's just hard to find the information you need," Potts said. "I view us as the connector.
"The patient is out there by themselves. They think no one cares about them."
