GoodRx is a healthcare company that provides consumers with real-time prescription drug pricing information. It operates a free-to-use website and mobile app that facilitate the comparison of prescription drug price quotes from more than 75,000 U.S. pharmacies. Apart from its flagship product, GoodRx also offers discounted coupons for popular prescriptions, a pill identifier tool, and telehealth services.
Founded in 2011, the company has its headquarters in Santa Monica, California. After filing for an IPO in August 2020, the company went public in September of the same year and now trades on the NASDAQ stock exchange under the ticker GDRX. Its IPO saw it raise $1.1 billion, valuating the company at about $18 billion. As of July 2022, the company had a market cap of $2.466 billion with a 52-week range of $5.61 to $48.05.
GoodRx’s market performance since going public hasn’t been all rosy. After an initial post-IPO surge that saw the company’s stock price double, it has pulled back sharply and is now trading about 80% below its IPO price. Nevertheless, GoodRx’s young history features several significant accomplishments, such as becoming the first pharmacy benefit manager (PBM) certified by the National Committee for Quality Assurance (NCQA).
In this GoodRx competitors analysis, we will look closely at some of the company’s main competitors in prescription drug pricing. This analysis will cover the competitive landscape, competitive advantages and disadvantages, financials, and market performance of each company.
Bottom Line Up Front
GoodRx competes in an industry full of well-funded and established companies. While it has a first mover advantage in the prescription drug pricing space, it doesn’t have the same in its telehealth line of business. Nevertheless, the company has strong relationships with major pharmacy chains, a large user base, and a growing revenue stream.
List of GoodRx Competitor Analysis
The GoodRx Business Model
GoodRx operates a marketplace that connects consumers with pharmacies. The company makes most of its money through prescription transactions. These are transactions in which a consumer uses GoodRx coupons to purchase a prescription drug from a participating pharmacy. The pharmacy pays GoodRx a transaction fee once the customer presents the GoodRx coupon.
Besides prescription transactions, GoodRx also generates revenue from telehealth services. These services account for about 10% of the company’s total revenue. Other revenue sources include subscription products, where customers pay a monthly fee for access to exclusive features like lower prices on popular prescriptions. It also sells ad space on its website and mobile app.
GoodRx uses a direct-to-consumer (DTC) business model. The company targets consumers directly with its marketing campaigns and doesn’t go through intermediaries like insurance companies or employers. The main benefit of this model is that it allows GoodRx to control the customer experience from start to finish.
A crucial part of the GoodRx business model is its relationships with pharmacies. GoodRx has built an extensive network of more than 75,000 pharmacies across the United States. These pharmacies have agreed to accept GoodRx coupons and offer discounts to consumers who use them. The company’s relationships with these pharmacies are crucial to its success.
GoodRx has also forged relationships with major pharmacy benefit managers (PBMs). These are companies that manage prescription drug benefits for employers and insurance companies. GoodRx has signed agreements with PBMs like CVS Caremark, Express Scripts, and OptumRx. Under these agreements, the PBMs promote GoodRx to their clients as a way to save money on prescriptions.
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GoodRx Competitive Landscape
GoodRx competes with companies that provide prescription savings, solutions to pharma manufacturers, and telehealth services. The competition is highly fragmented, especially in prescription-saving solutions. Big and Small companies compete for market share with various business models, such as subscription, marketplace, and direct-to-consumer.
Its pharma manufacture competitors are companies that offer platforms on which manufacturers can reach consumers and promote their drugs. These platforms could be health-related websites, patient assistance programs, or mobile apps.
While GoodRx’s telehealth service is in the early stages, it has several big competitors, such as Teladoc and Amwell. These companies have been in the business for many years and have a first-mover advantage.
GoodRx Competitor Analysis
Below is a detailed analysis of GoodRx’s main competitors.
1. Blink Health
Blink Health is a New York-based prescription savings company that offers discounts on medications through its free website and mobile app. Geoffrey and Mathew Chaiken founded the company in 2014, intending to connect insured and non-insured Americans with the lowest prices on prescription drugs.
The company has two main products: Blink Health and BlinkRx. Blink Health offers discounts on medications to consumers through its website and mobile app. The company contracts with pharmacies to provide these discounts and pays them a fee for every transaction. BlinkRx, on the other hand, is a digital pharmacy that provides customers with the lowest prescription prices, free home delivery, and 24/7 customer support.
Blink Health competes with GoodRx in the prescription savings market. The two companies have similar business models, offering discounts on medications through their websites and mobile apps. However, GoodRx has more pharmacies under its contract than Blink Health. While BlinkRx is a digital pharmacy, GoodRx does not own a pharmacy; instead, it contracts with pharmacies to offer medication discounts.
Blink Health makes money by negotiating with pharmacies to get the lowest medication prices and then charging a fee for every transaction. The company also earns revenue from BlinkRx, its digital pharmacy. While it doesn’t own the drugs, it facilitates the transactions and makes money off the spread between what it pays for the drugs and what it charges consumers.
Because it’s a private company, it doesn’t disclose its financials. However, CBI insights estimate a valuation of about $305.91 million. As per Crunchbase, the company has raised $175 million in more than four rounds from six investors. The last round of funding was on October 27, 2020, when it raised $10 billion in an unknown round.
2. Pharmacy Checker
PharmacyChecker is a website that helps consumers find safe and affordable prescription drugs from licensed pharmacies. It’s the only independent company in the U.S. that verifies online pharmacies and provides drug price comparisons. Founded in 2003, the company has its headquarters in New York.
It doesn’t have a diversified business model like that of GoodRx. PharmacyChecker only offers a website where consumers can compare prescription drug prices and find safe online pharmacies. Unlike GoodRx, it doesn’t affiliate with any pharmacy, manufacturer, or distributor of pharmaceuticals. Its only affiliation is with Consumerlab.com, a company that independently evaluates dietary supplements and nutritional products.
About 67,000 pharmacies submit their prescription drug prices to PharmacyChecker. It then compares these prices and provides consumers with the ones that offer the best deals. The website is free to use, and the company doesn’t charge any fees. It also doesn’t sell or lease any personal information to third parties.
Once you find a pharmacy through PharmacyChecker, you can place an order or submit the PharmacyChecker prescription discount card to the pharmacy. You can get up to 80% discounts on medications through this card. PharmacyChecker makes money through transaction fees it charges when you use the discount card.
Its single revenue stream means the company can’t effectively compete with GoodRx or any other company with set growth prospects. Moreover, it’s a private and more of a non-profit organization. We believe the company won’t be able to scale its operations to compete with GoodRx long-term.
See also: Teladoc Competitors Analysis
3. Optum Perks
Optum Perks is a prescription discount program offered by UnitedHealthcare, one of the largest health insurance companies in the United States. The program is available to anyone, regardless of whether they have health insurance.
With Optum Perks, customers can save up to 80% on the cash price of their prescriptions. The program also offers discounts on other healthcare services, such as lab tests, MRI and CT scans, and dental work. Competitively, Optum Perks is on par with GoodRx, offering discounts and prescription coupons. It doesn’t have membership or subscription fees, which could give it an edge over GoodRx.
Optum Perks enjoys the backing of UnitedHealthcare, one of the largest healthcare companies in the world. This positioning gives it a competitive advantage over GoodRx, a standalone company. In 2021, UnitedHealth had revenues amounting to $287.6 billion. Optum, which operates the Optum Perks side of the business, had revenues of $54 billion in 2021.
While we can’t tell how much of this is profit, we can see that Optum, as a subsidiary of UnitedHealthcare, has the potential to scale much better and faster than GoodRx.
Optum Perks makes money mainly through drug transaction fees that it charges pharmacies. Like Pharmacy Checker, it doesn’t have a diversified revenue model like GoodRx. While we can say that Optum Perks has a more solid financial backing given that it’s under UnitedHealthcare, we cannot say the same for its long-term growth prospects. We believe that if Optum Perks were to come out as a standalone product, it would have a tough time competing with GoodRx and other existing players in the market.
4. Teladoc Health
Teladoc Health Inc., a publicly traded company under the ticker TDOC, is the world’s largest provider of virtual healthcare services. Byron Brooks and Michael Gorton founded the company in 2002 to connect doctors and patients using video conferencing technology. The company now uses telephones, mobile apps, and the internet to provide on-demand healthcare services 24/7.
While Teladoc Health doesn’t focus specifically on prescription drugs, it is a direct competitor of GoodRx in virtual healthcare. GoodRx has GoodRx Care, formerly HeyDoctor, a virtual primary care service. The competitive landscape between the two companies is similar, with both offering virtual consultation services.
Regarding financials, Teladoc Health is a much larger company than GoodRx. In 2021, Teladoc had revenues of $2.03 billion, representing an 86% year-over-year growth. GoodRx, on the other hand, had revenues of $745.4 million in 2021, up from $550.7 million in 2020. Teladoc can scale much faster than GoodRx and has a diversified revenue model that includes subscriptions, transaction fees, and advertising.
Teladoc’s primary source of revenue is through subscription fees. Essentially, Teladoc charges employers and health plans a monthly fee to provide access to its network of doctors. It’s more dependent on enterprise customers, which could be a risk if the economy weakens and companies cut back on spending.
However, it’s important to note that Teladoc Health is not a pure-play prescription discount company like GoodRx. While GoodRx’s primary focus is on providing discounts on prescription medications, Teladoc Health delivers a much more comprehensive range of healthcare services. Moreover, it has more subsidiaries operating under its brand, which gives it a competitive edge.
Amwell is a direct competitor of GoodRx in the virtual healthcare space. Formerly known as American Well, the company was founded in 2006 by Ido and Roy Schoenberg. It has its headquarters in Boston, Massachusetts, and trades on the NYSE under the ticker AMWL. As of July 2022, Amwell had a market cap of $1.127 billion.
Amwell provides digital health solutions that enable patients to consult with doctors and specialists online. It offers various services, including but not limited to primary care, behavioral health, and chronic condition management. The company has a vast network of doctors and specialists who provide consultation services through video, chat, or phone calls.
Financially, GoodRx displays better performance metrics than Amwell. In 2021, GoodRx had revenues of $593.359 million, whereas Amwell generated $252.8 million. The same reflects in their respective stock prices as well. As of July 29, 2022, the 52-week range for GoodRx stock was $5.61 to $48.05, while Amwell’s 52-week range was $2.52 to $11.89.
Regarding growth prospects, we believe GoodRx is a better investment than Amwell. GoodRx has a proven business model with strong fundamentals and a solid competitive position in the market. On the other hand, buying Amwell stock could be riskier because its performance hasn’t been as impressive as GoodRx.
GoodRx Growth and Business Strategy
A focus on growth fueled GoodRx’s 54% CAGR between 2016 and 2020. Continuous improvement of the company’s mobile app and website and introducing new products and services played a crucial role in this growth. The company believes that building the GoodRx brand and expanding its customer base will be the key drivers of growth.
As of 2020, the company’s website and mobile app were attracting an average of 20 million high intent monthly visitors. This high level of engagement translated into strong revenue growth, with the company’s annual revenues reaching $550.7 million in 2020, up from $99 million in 2016. To this end, GoodRx plans to continue to invest in marketing and advertising to raise awareness of its brand and products.
The company also plans to invest in new products and services and expand existing ones. In 2020, it launched the GoodRx Care platform, which allows patients to consult with doctors and get prescriptions filled at a discount. Future expansion opportunities such as clinical trials, insurance marketplace, and prescription delivery could provide significant upside potential.
Strategic partnerships and acquisitions play a significant role in GoodRx’s growth strategy. The company has made several acquisitions, the most notable being the HeyDoctor acquisition in 2019. GoodRx is also in partnership with several big names in the healthcare industry, such as CVS Health, UnitedHealthcare, and Aetna. These partnerships help the company to expand its reach and increase its customer base.
GoodRx Competitors Analysis (FAQs)
Question: What is GoodRx’s industry?
Answer: GoodRx operates in the Healthcare Technology industry. This diversified sector includes companies that develop and commercialize medical devices, provide healthcare IT solutions, and offer various other health-related services and products. However, it specializes in providing digital tools that help consumers save money on prescriptions.
Question: Who are GoodRx’s main competitors?
Answer: The main competitors of GoodRx are Blink Health, Pharmacy Checker, Optum Perks, Teladoc Health, and Amwell. Its focus on growth, strategic partnerships and acquisitions, and investment in new products and services have helped it to solidify its position as a leading player in the healthcare technology industry.
Question: What are GoodRx’s competitive advantages?
Answer: GoodRx has several competitive advantages. It has a diversified product and service offering, a broad geographic reach, and a strong brand. The company also has a large customer base that allows it to generate significant economies of scale. Other competitive advantages include its strong partnerships with leading healthcare companies, diversified revenue model, strong financial position, and experienced management team.
GoodRx is a popular online platform that allows people to compare prescription drug prices and find discounts on medications. It also has telehealth services and offers coupons for prescription medications. Given the high costs of many medications, GoodRx provides a valuable service for consumers. However, several other companies offer similar services.
Blink Health, Pharmacy Checker, Optum Perks, Teladoc Health, and Amwell are all competitors of GoodRx. Each company has its strengths and weaknesses. GoodRx focuses on progressive customer acquisition strategies, partnerships, acquisitions, and investments in new products and services to stand out in the crowd.
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