Ro Hits Record Sales Every Month Since Expanding $5 Pharmacy Business
CNBC / 06.29.20
CNBC / 06.29.20
“While stuck at home during the pandemic, consumers are buying more Viagra, birth control, hair-loss treatments and many other medications over the internet. Ro is looking like one of the big winners.
Ro, a start-up that says its product suite spans “diagnosis to delivery,” has reached record revenue for four straight months through May, according to a person familiar with the matter. Its pharmacy delivery service, which it piloted in March, has been growing 130% a month, said the person who asked not to be named because the numbers are confidential.
The company, which has been in business for just three years and started out by focusing on men’s health, is generating $250 million in annual revenue though it isn’t yet profitable, the person said. Hims, its main rival, expects to hit that revenue number as it moves into 2021. The broader category of telehealth is surging this year, with remote health provider Teladoc’s stock price more than doubling and rival Amwell confidentially filing for an IPO.
Ro is using the opportunity to beef up its executive team. The company has just hired Stephen Buck, a veteran of the drug supply chain, as a vice president of pharmacy strategy. Buck, who previously worked at GoodRx and McKesson, said he’s focused on getting more Americans to order their medications by mail.
“No one has done mail-order pharmacy in a way that consumers can say is above and beyond what they get today,” said Buck, in a phone interview. “So for me, this was a once-in-a-lifetime opportunity.”
Ro’s pharmacy service delivers more than 500 generic medications at a flat fee of $5 each. It currently has a distributed network of pharmacies across the country, and is live in 23 states. Competition is stiff, with Walmart offering affordable prices for generic drugs and Amazon beefing up its PillPack online pharmacy. Ro, backed by more than $176 million in venture capital, also has to take on traditional retail pharmacies, where most consumers still shop for their drugs.
Ro CEO Zachariah Reitano acknowledges that people will still need to go into a physical pharmacy for acute problems that require medications right away, but he said his company can send scripts overnight. The average Ro customer, he said, is in their mid-40s, and orders pills for high cholesterol, hypertension, birth control or diabetes. Ro is trying to make the experience similar to the way consumers buy other things.”