PillPack Starts Offering Online, Personalized Prescription Service

2/4/14Follow @curtwoodward

TJ Parker grew up in a pharmacy family. And when running a drug store is the family business, your first jobs include delivering medications to people’s homes—the kind of up-close view of the American healthcare system that many people never get.

That’s where Parker first got familiar with the elaborate routines that some people have to work out just to make sure they’re taking the right pills at the right time, from multi-chambered pill boxes to homemade codes and labels.

“One lady, I remember, I would color on her pill bottles every day so she would know which ones to take when,” Parker recalls.

Eventually, Parker went to pharmacy school himself. But he didn’t enroll “with the intention of working at CVS or being a traditional retail pharmacist,” he says. “I went to pharmacy school with the ambition of fixing this problem.”

Today, Parker’s idea is officially open for business in the form of PillPack, a Manchester, NH-based startup that already has assembled an impressive-sounding national reach and back-office operation.

Investors have backed PillPack’s plan to the tune of $4 million, with major backing from venture capital firms Atlas Venture and Founder Collective. The startup also is financed by accelerator program TechStars, and angel investors such as Andy Palmer and Lucy McQuilken.

Mail-order pharmacies are nothing new, and many large health plans have been pushing their members to take a mail-delivery option in recent years because of lower overhead costs. PillPack operates in much the same way, but incorporates some ideas from the worlds of connected software and leading-edge product design to help its service stand out from others.

At the core of that service are individualized plastic medication packets that contain a specific set of pills, with easy-to-read instructions printed on the outside. So, if you need to take one group of pills on Tuesdays at 10 am, the little packet leaves little doubt about which medications to swallow—a big improvement from adding color-coded label modifications after the fact.

PillPack_Packet

PillPack packet

That concept has been used in other parts of the pharmacy industry, but hasn’t quite caught on in the consumer market, Parker says. For instance, his father has for many years owned a pharmacy that serves long-term care facilities, a niche where such multi-dose packets are already used.

“That’s really the only place that this packaging has taken hold at all,” Parker says. “It’s never been made to be a consumer product, to have the tools be understandable and easy to use for the consumer.”

To make timely, accurate medical deliveries a reality, PillPack plans to combine new-school and time-tested techniques. That means a website where customers can manage their medications, automated machines that pack and report the contents of each shipment, and staff pharmacists who oversee and verify the correct medications are being sent in the proper order.

“We like to say we have pharmacists checking robots and robots checking pharmacists,” Parker says.

The pharmacy operation is headquartered out in Manchester, with a software-focused office in Somerville, MA. That pharmacy sorting and shipping service is something PillPack has built on its own, rather than simply plugging a lead-generation website into someone else’s existing mail-order pharmacy, Parker says.

The young company has about 12 employees, and has been testing its service by shipping to early customers around the country since September, he says. Parker wouldn’t disclose the number of states or customers PillPack has served ahead of its broader launch, but the company says it is licensed to send medications to people in 31 states so far, with more expected this year.

PillPack charges $20 per month for its service, a significant price reduction from the $50 per month it was planning to charge when the company graduated from Boston’s branch of TechStars last year. PillPack says it also accepts “most major prescription insurance plans as well as most forms of Medicare Part D.” Still, that’s a monthly charge most people aren’t used to paying just for getting their prescriptions filled.

It will be interesting to see how consumers respond to an Internet-age rethinking of the traditional pharmacy routine, which often consists of standing in long lines at the back of a glorified convenience store or concrete-floored bulk-buy warehouse.

In any case, as I wrote when assessing PillPack at TechStars demo day, it’s refreshing to see young entrepreneurs increasingly tackling “offline” markets that offer a more substantial challenge—and more meaningful payoff—than the next hot online media trend.

“I think ‘tech’ has become this overarching term for what will eventually be companies reimagining how industries should work,” Parker says. “You find industries that don’t put the customer at the center of the experience, and eventually I think you’re going to find those industries disrupted.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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