This startup believes shopping around for prescription drugs should be as easy as shopping on Amazon. The future of a $700 billion industry is at stake
Summary
The hope is by increasing transparency, it might lead to competitive pressure to lower prices.In short, the mission is to give some power back to the patients who are at the mercy of the $700 billion prescription drug market in the U.S. today. A lot of leverage.The cold-start phenomenon of a marketplace is very, very hard, Sipe said.So the startup has entered the space in perhaps a counterintuitive way: by giving patients digital control of their prescriptions so they can easily pivot if their regular pharmacy doesnt have their medication in-stock, is charging too much, or runs into some other issue filling the script.This is how the model works. They can choose drugs at the cheapest price from the most convenient place that actually has their drugs.Notation and the healthcare-focused firm Flare Capital Partners recently led a $9 million round in Photon Health. The startup has now raised north of $16 million in total from these firms and other VCs like Box Group, as well as angel investors including the founders of healthcare-related upstarts like Carbon Health and PillPack, which Amazon purchased for around $1 billion in 2018.The main incumbent Photon is going after is Surescripts, a literal monopoly that makes software that doctors and other providers use to both deliver electronic prescriptions to pharmacies, and to check a patients eligibility for their insurance to cover a specific drug. The Federal Trade Commission sued the company in 2019, alleging that it was illegally maintaining a monopoly a 95 percent supershare to be exact through anticompetitive behaviors, including exclusivity agreements.