Digital pharmacy startup DiRx thinks it can reinvent how Americans access medicine

Pharmaceutical start-up DiRx tackles accessibility in both senses of the word.

In terms of availability, the New Jersey-based startup is working to make drugs literally more accessible to patients. The company prides itself on having more than 1,400 FDA-approved drugs, straight from the manufacturers, which ship free to 49 states and Washington DC. Unless it’s an extremely esoteric drug – like something used, say, for epilepsy research and in clinical trials – chances are good customers will find what they need, and probably inexpensively, at DiRx.

In the sense of disability, the mission is multiple. The first and most obvious advantage is the mail-order nature of DiRx, which means that a person with a disability does not have to go to a community pharmacy to get their medication. Direct operation is not trivial, as the logistical and practical considerations for traveling are often insurmountable. The second advantage is financial. Because DiRx works directly with manufacturers to supply generic drugs, they are able to pass the savings on to customers. This means that medicines are much cheaper than they would be elsewhere, a key benefit for the majority of people with disabilities. As many people with disabilities depend on daily medications for their comfort and survival, affordability (and availability) can literally mean the difference between life and death.

“We created DiRx as a digital pharmacy with a nationwide presence to disrupt and eliminate many middlemen in the drug distribution chain. [by bringing] the cost down and [make medication] more accessible to ordinary Americans,” DiRx CEO Satish Srinivasan told me recently over the phone. “We source directly from manufacturers, we ignore all the big drug wholesalers, we ignore PBMs [pharmacy benefit managers], and offer simple cash prizes that are way more affordable than what you see in the market. This brings fairness to people who may have different levels of insurance or lack of insurance.

In a press release issued just after Christmas last year, DiRx announcement it had raised $10 million in Series A funding. This followed news a year ago this month that the company had secured $5.75 million in venture funding.

DiRx’s beginnings stem from more than a quarter century of Srinivasan in the generic pharmaceutical industry. It has always bothered him that the economics and business models of players have never been aligned with the best interests of customers from a financial perspective. While he doesn’t object to companies trying to make money, the problem as he sees it is everybody try to take their share. The reason the cash grab is a problem is the state of health care in this country because, according to Srinivasan, data from last year shows that 41% of Americans are underinsured, 13% are uninsured. having no insurance. He also cited figures from the Kaiser Family Foundation that show 29% of American adults are not picking up their prescriptions due to concerns about out-of-pocket costs. All told, it’s not hard to see the incongruity here; especially for someone with a disability, the stratospheric costs of health care and medication are more often than not prohibitive to obtaining much-needed care for optimal health and well-being.

Srinivasan unequivocally explained his motivation for starting DiRx. “There is no reason [for customers to pay] exorbitant prices for [their medication],” he said. “It’s not the cost of the product. It’s the cost of a system.

Prior to launch, Srinivasan and his team conducted extensive market research across the country. They created what he described as “heat maps” that plotted hotspots of underserved populations in terms of socioeconomic status, health factors and level of insurance, among other factors. They also surveyed people in an effort to gauge what everyday people perceive as the biggest barriers to their health care. All of this information gathering and learning was instrumental in building the DiRx program that exists today, Srinivasan said.

“Because I understand the real cost [of drug manufacturing], [I know] there must be a better way,” Srinivasan said. “Today we are surrounded by so much technology, our digital devices and our smartphones. Why not use it to disrupt the system and gain direct access to consumers? That’s what brought me to this.

Customers can sign up for DiRx through the company’s website, which Srinivasan told me is home to one of the largest collections of generic drugs in the world. In addition to the self-service web interface, DiRx offers free 24/7 customer service by phone in English and Spanish. Customers can also tell their healthcare provider to send any prescriptions to DiRx. Their pharmacy is located in Florida.

Feedback on DiRx has been positive. Srinivasan explained that the company has an average rating of 4.7 on the customer service site. Trustpilot, a remarkable achievement considering that the average industry rating is only 3.5. DiRx filled “tens of thousands” of prescriptions in just a few months after it was made available to the public. Srinivasan said the most common comment came from people saying they “liked” DiRx’s user experience and the communication of its customer support staff.

Looking to the future, Srinivasan believes DiRx has a real opportunity to disrupt the traditional pharmacy model given the current “sad situation”. He lamented that a third of Americans find it “too unaffordable and inaccessible” to obtain medicine, and is determined to make a dent in this corner of the universe. To that end, DiRx is investigating possible retail expansion, as well as new (for them) products such as the notoriously expensive Epipens. They are also considering therapy-specific services such as partnering with the Hepatitis B Foundation make care and support more affordable and accessible.

DiRx continues to forge ahead and innovate towards a brighter future.

“We started with a large number of products and would like to continue to grow,” Srinivasan said. “Now we would like to strategically tackle the problem areas and try to solve them. Then we will look at other related things like a pharmacy [and see] where else we can add value.

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