The Business of Pharmacy Podcast: Delivering Prescriptions

Our CEO Kunal Vyas was recently a guest on the industry expert podcast, “The business of pharmacy.” Hosted by Mike Koelzer, they delved into the world of pharmacy delivery services. You can read the full transcript below and listen to all the episodes at bizofpharmpod.com.

https://www.youtube.com/watch?v=qwmZF3jCOOo&t=234s

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Mike Koelzer: Kunal, for those that haven't come across you online, introduce yourself and tell our listeners what we're talking about today.

Kunal Vyas: My name is Kunal Vyas I am the CEO and co-founder for RxMile and we're talking about prescription home delivery. The last mile delivery which is the most key component in pharmacy. The majority of pharmacies do provide this type of service in some form or manner and we've built a platform that can help them in regards whichever way they decide to utilize it.

MK: I like that mile is in your name because those are the tricky ones. I mean anybody can move something across the country, but when it comes to helping Mrs Johnson, you know get to her side door, versus her front door, and leaving it in the turtle statue on the back porch, or something like that. That's where everything breaks down that's where it gets difficult.

KV: Yes exactly, for most pharmacies, when they use our platform there's an individual case per patient being delivered to. For example, one may require an adult photo ID, another package may not require an ID, just a picture that was left at the door for verification.  Some may require signature, it all depends you know. Leave it at the back door, in the porch, leave it underneath the chair. A lot of communication when it comes to the last mile. Communication is key.

MK: And in your case being in Orlando Florida you might even put down like watch out for the alligators or something?

KV:  Well not so much, more like porch pirates (laughs)

MK: Is porch pirating getting worse?

KV: I think with the ring video doorbell it got a lot better, as far as people are a little bit thinking twice about it but it was pretty bad before that.

MK: Looking at your Linkedin, you've been in the courier service how did your interest in that start way back?

KV: My family is pretty big in the Orlando market, in the MSO space, which is a managed service organization we owned a group here in Central Florida which was servicing about 30 000 managed care MAPD lives.

MK: Servicing them with delivery or you mean health-wise?

KV: Servicing them as far as their doctor network, the primary care doctor, it was kind of like we're at full risk, these are our patients, we have to service them, we have to make sure they're coming in to see the doctor, they're adhering to their medication regimen, things like that. To keep them out of the hospital, to keep them compliant and keep them healthy.

MK: Wait a minute what do you mean your family did this?

KV: My family, my uncle so he was the owner of family physicians’ group which was a large MSO here in Orlando recently he's been sold to Humana.

MK: Was he a healthcare provider?

KV: So, my aunt was, and we had about 155 doctors that worked for our group.

MK: Wow.

KV: How I came into the space was, I was just about to go into college, and my uncle approached me and said, “Look we're growing significantly here, we're opening 22 medical centers, we're going to have hundreds of doctors, we actually need to open a pharmacy to service these patients.”

And mind you this was way before there were any Hedis Part D quality measures, this is when there was no such thing as a patient-centered medical home. But my Uncle, you know, he was thinking forward in regards to creating a pharmacy to help.

Not more of a profit center, but to help with keeping the cost down for the real profit center which was the doctor group. So I just, you know, decided to get my pharmacy technician license so I could actually understand what I was walking into.

My background has always been marketing so I did approach a lot of these doctors, kind of understood exactly the economics in regards to, you know Part D cost part A as far as hospitalizations, readmissions, and we were able to kind of drive a lot of patients with the opportunity, “Hey you can have your medications delivered to your home.” Versus utilizing a chain pharmacy or whatnot.

This is an option that you have. We had a lot of patients that decided to take that option and from there you know, we were using courier companies and it was just a total nightmare. You know we had doctors, they're like, “You guys do a horrible job, my patient says the medication was thrown over the fence.” Or the person didn't wait for the patient to come.

So I told my uncle, I'm like, I think that we should handle the logistics ourselves. I'm gonna create a logistics company.

One of my good friends from Orlando Florida was working on the West Coast back with Microsoft in Seattle, smart guy, engineer, you know ,full stack engineer, and I said to him, “Hey, I need help I need to figure out how to create a label.” And it started with the excel spreadsheet. From there I need to do this, I need to get signatures like before I even did it, I was using five different components I had to have one component to optimize my routes, one component to get a signature, another one to navigate the driver, print a label, so that was the start of me beginning to build the Rx model as far as a platform. More for the necessity of me to be able to service these patients and that's kind of how i got into logistics.

So it started off with me going into pharmacy without even knowing I'm getting into it and then understanding and learning. And it's been, I would say, 15 years now that i've been in the industry. Learn a lot of things along the way with owning a pharmacy and a logistics company and kind of running them side by side.

MK: What was your decision to start a company versus just say, “Hey Unk I'll just come in as an employee and we'll get delivery going.” Is it true that you actually started a company to do that or did that come a little bit later?

KV That's actually how it started right, so just to separate for liability reasons we had to create a different company so it wasn't tied strictly into the pharmacy per se. But that's how it started it was literally just for my pharmacy to provide the services. But as we grew along, built out the technology you know, and all the different bells and whistles that we added. Features which really helped us with things like auditing, 10 years’ worth of record keeping, compliance records.

I decided when I sold the pharmacy in 2019 that I’m gonna take this logistics company which is called DeliverStat, and I'm gonna provide this service to other independent pharmacies out there here in the state of Florida.

So that's kind of how I got into that. I learned a lot in doing that, where we were out there marketing and I figured out there was a 40 40 20 rule here. What I mean by that is we know there's 19 to 20 000 independent pharmacies throughout the U.S. And from what I saw in Florida, it’s probably the third largest market. So as we were approaching for delivery service I noticed that 40 of these pharmacies are more small mom and pops and they have their own driver and they're maybe doing 10, maybe 15 at the most deliveries per day. And it just made more sense for them to do that, because you know it’s more cost effective. It might be their nephew or a retired veteran or somebody in the community.

The other 40%, or especially in the Miami area, were actually pharmacies that were doing massive volume like three, four, five hundred up to a thousand packages a day, and they had the density to have their own in-house drivers also, to keep their costs down, have more control.  From there I realized, well really there's only 20 of this market who could really utilize a courier service type of thing and that was our focus. More on enterprise accounts, so we did focus on a lot more enterprise accounts the people that can afford the six, seven, eight dollars a package delivery, still a little cheaper than FedEx but a little higher than if they did it in house where they might be paying three, four dollars per delivery with their own drivers.

MK: What does that mean enterprise account?

KV: Enterprise accounts, so we have a contract with Vitas, we have a contract with large MSOs, that are more. not just, let's say independent pharmacies but they're really they're part of a bigger group like a health group.

MK: You mean like a bigger organization?

KV: Yeah a more bigger organization, versus just a small independent pharmacy. Like they're just a component of the whole medical center. So we decided to kind of focus on that market but at the same time I decided, you know, this platform that we built let's, let's bifurcate the technology let's create a company, which is RxMile, and now offer that out throughout the United States to people so they have the tools and solutions I had when I was owning my pharmacy, to do it in house, have my own drivers, keep it cost effective, control and compliant.

You know there's a lot of PBM contracts which forbid third-party delivery or over 50-mile delivery, so that's kind of what we developed to help with independent pharmacy owners to utilize. There's also other third-party integrations with partners in case they do need to outsource but RxMile is kind of like a full-fledged deliver prescription delivery platform. Whether you want to do it with your own drivers, you need to outsource it for a same day or emergency, or you want to outsource to a local courier for next day. So it's kind of like, have it the way you want it, kind of control the cost. We always promote for them to utilize the in-house, because that's where they can keep their cost at the most minimal.

MK: Go back to your comment on saying that you did it for liability reasons when you started the company originally, what liabilities were you trying to separate?

KV: The pharmacy is, you know, a much bigger organization we had about 50 employees we're doing 18 million ARR and, you know, the logistics company being separate, let's say a driver in the logistics company, God forbid, gets in a car accident and something fatal happens to somebody. That could in turn fall back onto the other entity, which would be the pharmacy. That's why a lot of these independent pharmacy owners do outsource their deliveries. To not have the liability on them versus the courier company which, is fully insured and they have the umbrella policy, and they're paying that super rate in regards to their insurance costs because they're not only covering themselves.

Like us for example, DeliverStat, we're covering ourselves, our own internal drivers that may work for us and then outsource 1099 contractors also, through our umbrella policy. So, to answer your question it was separating the two entities because there were two separate type of companies.

MK: I don't think most pharmacies, maybe I'm all wet on this. I don't think that most independent pharmacies have done that for their delivery portion. How did you know that? Did someone give you advice from the start and say hey if we're going to deliver we want to keep these separate?

KV: Yeah, I mean my uncle obviously made sure that it was done that way. I heard a horror story one time with the independent pharmacy driver getting into a car accident. Now that whole pharmacy was getting sued by the actions of that 1099 contractor, who wasn't even an employee of the pharmacy. So you know, sometimes they don't want the headache and they just outsource it. Some people will get the commercial insurance policy let's say if the driver is using their own vehicle, some people skate around it, but you know at the end of the day you don't want to take that risk.

MK: What's the downside of a pharmacy, of every pharmacy listening now, setting up an LLC for their delivery portion of the pharmacy? Any downside to that?

KV: No downside, just separating the two entities, you know depending on how they pay their driver. If they turn them into employees or their contractors, it depends on the way they structure that, but there wouldn't be. I mean maybe the cost of filing for it, stuff like that but I don't see any downside. I think that's actually a smart move to do. if you're going to be doing it yourself with your own drivers.

MK: Delivery has always been a kind of a strange thing for me because I’ve never known how much to market it. Because it's like if I market it I might get more deliveries and I'm never sure exactly what the profit is and stuff like that.

KV: Well, I'll tell you what, so I tell this to everybody, I said name me any other industry here, other than independent pharmacies, that provide free home delivery, and you, you can't answer that, right? Well, you know even if you're getting a pizza there's a delivery fee baked into it.

MK: Yeah, now there's a fee and they say this is not a tip.

KV: There's always a fee baked in you can't be making a fee on a copay right, so when these pharmacies are offering this free delivery to their patients, it's kind of like they, have to, in order to compete. Unfortunately, we just went through this pandemic and COVID has really, accelerated that change, whereas people don't really want to go and wait in the lineup.  Did you you know prior to COVID, did we ever think CVS and Walgreens would offer delivery and be okay to lose front-end foot traffic?

MK: Right.

KV: But today they're doing it because they have to. Because you know, it's a catch-22. They don't want to promote it as much, but they got to offer it. Because that's just the world we live in today. And I tell independent pharmacies, I'm like, “You guys need to leverage what you've been doing for decades.” We have so many digital pharmacy startup companies out there that are raising millions of funding, and they're harping on something that these independent mom and pops have been doing for decades, which is free home delivery.

You know, we should leverage that right. Uber spent billions of dollars to build a network of drivers throughout this country. These independent pharmacies got to understand, you guys have built that network too right, 10 000 plus 20 000 they all have their drivers they're doing delivery individually you're not that valuable but as, as a group there's a real value there.

MK: I think all those companies that have popped up, you'll see like an app and it'll say, you know this new national pharmacy, they got this real simple app it looks real nice and clean, and they've raised millions of dollars from investors. I think those investors had the wool pulled over their eyes I look at this stuff and I'm like, “How hard is this to duplicate?” It's not very hard. I don't know why they're getting such value. You think it's because there's just too much investment money around and they gotta put it somewhere?

KV: Ah because they pulled wool over their eyes, and I'll explain to you what I mean by that. Okay, today right now, these investors that are investing into these startups majority of them, 95%, is a b2c use case right. They're expecting you know, maybe the baby boomers will start utilizing. But what is the last time that you sent a prescription over to a pharmacy? 99% of prescriptions are sent by the physician. So when you have a b2c model, where you're expecting people to go download an app, put their billing information in, their insurance information, put their script info in, and send it. I just think like, that's, that's not the play, the play is that the relationship between the doctors who actually send the script through EMR or EHR to the pharmacies, and the pharmacies are the ones who are providing the delivery.

But you know, how do you expect to? You're in an industry where you might average maybe a three to four maybe, if you're lucky five percent net net and you're raising millions and millions of funding to build a team of developers, to develop what? There's so much technology you can build. The human touch will never go away, and that's what independent pharmacies can do. They keep the communication, the patient is not just the number, they know them by their name.

Now, these digital startups that are out there, they got that, and you know they got the idea right where, “Hey let's offer free same-day delivery with the two-hour time frame”.  But all they're doing from what I'm seeing, is, they're using millions and millions of funding to affect not the chains and the supermarkets, they're affecting the independent pharmacy owner, and driving business to them, and they have a bad experience, and then they go right back to the to the independent pharmacy that's providing the delivery. So, yeah, I just think that you can't be in a business where your margin is net three percent and then have a whole development team. It's a pharmacy it's not a technology company.

MK: Everybody sits back and looked at let's say Instagram, if you look on your phone at companies like Instagram for example, what Facebook bought it for a billion bucks or something? If you look at those, there are hundreds of those companies, and there's only one leader. And you can say the same for amazon as one leader, you know, maybe Walmart and a couple other ones. Maybe one will take off but not a hundred with all these different people tossing money at it.

KV: Well, I tell you what, in our industry, there's a fix and you know what, I have a positive outlook based on the way things are going right now with the FTC probe, you know we have Mr Alvaro Badaya, who's joined the commission. I think there might be transparency coming down the line.

But to answer your question these digital startups are here to disrupt the industry. How do you disrupt the industry when the person you're trying to disrupt is your payer? CVS, Caremark, Express scripts, Optimarx, those are the, those are what? 80% of the payers for as far as PBMs in the country. So I, just don't see, you know Amazon did try, Amazon came out there, and they were planning from where they are to where they wanted to be, they failed in a sense. Right now, Mr Cuban is coming, this is a little different because it's all cash paying, is not any insurance involved but until the FTC helps them out, it's going to be very difficult to disrupt the industry when the payer is the one who's paying you that you're trying to disrupt.

MK: You've got 80 percent, are paying or 90% and the rest are little old ladies who don't know how to turn a phone on. I mean I don't think the market's there for that kind of money that's gone into it.

KV: Yeah, I don't think so either. The independent pharmacy has been a key component in working directly in their communities with the physicians, with the specialist, that relationship is kind of being severed by the bigger players in there right. Forcing mail order, steering people to that. Some insurances you can only use CVS or Walgreens and whatnot.

So, you know, I've Spoken to a lot of pharmacy owners. I have a lot of friends in the pharmacy industry, and I can understand that they have like a real negative outlook just because of the last decade, how things have been. But I always tell them, I said, “Look, let's think positive right, things are going somewhat in the right direction we have the, you know the FTC now looking into this, there's people in the house, in the senate which are trying to make a change here I get that we've been trying but we haven't reached this point ever. So, you know, I feel that I understand the plight but yeah let's be positive.”

MK: One of my team members asked me how important it was for our state for example, Michigan, to have new PBM laws and I said, “it's good, you know the prices are still going to suck but at least it took away some of the opaqueness, at least it's more clear for then the next round of laws, the politicians to say, “Oh we understood your plight now in five minutes, instead of you know five weeks. It was just hard to understand before.”

So, you still might be getting screwed but at least people can see you getting screwed and then they understand it more.

KV: Exactly, exactly two three years ago nobody knew what a PBM is, now you know people who don't even know our industry know what a PBM is because of all the all the news that's come out about them. All that they're been doing, there's a big bright light shining on them right now you know.

Don't get me wrong they have a place, and the place was, to negotiate and get that little three to five cent transaction for every transaction. That's what they used to be so but now they're taking a different turn.

You know the other thing is mail order pharmacy. You know I've so many horror stories with mail order pharmacy, veterans are forced to utilize it, medicare advantage patients are told they need to utilize it. You know, one has fought for our country, the other one has, you know worked 15 years plus, paid their taxes and now they're entitled to medicare advantage after reaching 65. But then they have no choice, they're told you have to use a mail order. Whether it's delayed, whether it's a placebo effect because it's sat in a mailbox, 140 degrees for three days before you decided to go pick it up, uh it doesn't matter. This is just, you know it to me, is pennywise pound-foolish because patients should have a choice if they want to talk to Bob the pharmacist across the street.

The same way that they want to go and buy Publix they want to go and buy their milk from Publix. You know what I'm saying? He's like, you can't just tell people no, this is the way it is and there's no other choice. I feel that the independent pharmacy has been through so much, that things that things are going to start getting a little better for us I feel.

MK: What is your worst negative emotion dealing with your current state with your company and so on, is it over confidence? Is it anxiety? Is it depression? Is it fear? what is your strongest negative emotion in the last year you know working with this?

KV: So, I would say anxiety, would probably play a role for me in that sense, and you know that, that, that, just comes with starting a new company and, understanding of what it takes, and going to the ups and downs.

You know with, my company DeliverSTAT, that we, right when we went live, we shot out of a cannon, we got a contract with Vitas hospice in South Florida to service the whole Jupiter to Homestead which is 150-mile radius, and everything looked great, and we grew so fast organically, and bam!

I made the biggest mistake I decided to grow throughout the whole state of Florida versus focusing in a certain part of Florida. So, you know, at that point it was almost like we went up to 1.2 million ARR, 2.2 million, and then all of a sudden we got to sit back and think what are we doing right here? What are we doing? Just because our service, we're trying to provide service, we don't want. All business is not good business and I learned that very fast.

MK: You say well, I probably should have maybe, kept it closer, could you have picked up the business so closer? What other business would you have picked up closer to grow your business but keep it closer?

KV: So when I started I was wet behind the ears, I had- the eighth largest city is Miami right- and we're in Miami we're doing a lot of volume business in Miami, and then I'm like, “Oh we have an opportunity in Orlando, we have an opportunity in Jacksonville, we have an opportunity in Atlanta, let's take it.!” The opportunity is not always what it seems, number one, and number two is you gotta crawl before you walk. Granted, now, I've learned from my mistakes in that sense and uh we are like we're doing so much volume in South Florida, is amazing with that company. But I did also learn a lot in regards to what my fellow pharmacy owners out there really need.

MK: But what else would you have done if you say I shouldn't have expanded so much, could you have grown your business closer by just picking up new people?

KV: Yes, I would have done what I'm doing right now. We're expanding in the South Florida market with that company, and you know there's so much business there.

MK: You jump to another city! You should have expanded a little bit, but you should have done it connected to where you are versus jumping?

KV: Yes, yes.

MK: You jump to the epicentre of some other city when you should have just expanded.

KV: Versus jumping 100%.

MK: That's a hard decision though, because when you're in the epicentre, patients are more compact. As you start getting out from the city they're fewer and farther between. I can see the temptation to want to jump to a new centre somewhere.

KV: Yeah, when you have investors invested and stuff and you just want to show that super growth, so you can continue to kind of make them feel like they've made the right decision.  I sat down and had a conversation with them and told them, “Look this is a marathon it's not a sprint, so we need to, pull back, grow within, and then understand how to do it the right way.” You know, I always tell people don't think about how to own the market learn how to own the margin. Then you can maybe own the market because not all of us are Uber where we've got hundreds of billions of dollars to burn. [Laughter]

MK: Speaking of investors, is RxMile is that all you, or do you have investors or partners or anything?

KV: So RxMile, majority ownership is between me and my partner who is the CIO, the developer, the one who engineered and now built the platform. And, we do have some, seed investment round that we just raised recently, a few doctors here in Florida that I've known, family friends type around. I don't feel we need to really. You know again, this is a little different right because DeliverStat, that is more of a fulfilment, you gotta have Hubs, insurance, drivers, all that, whereas with this company is more. It's just software and support.

So, I don't want to give too much away, in a sense right? I want to first go out there and try to generate what I can with, with what we have but eventually to kind of grow it out and nationwide. You know, this product could be used anywhere you know. Canada, Europe, at that point we would probably need to look at maybe a series A round but that's it, I'm not trying to do BCDE and then burn all the investors’ money.

MK: What's your biggest bottleneck right now? If you have one, I guess any business has some bottleneck. Is it your energy? Your time? Finding the customers? Having the money? The marketing? Where would you say a bottleneck is to any growth that you're not having? I'm not saying you don't have it. I'm just saying if there is a bottleneck where is it?

KV: So, I would say my bottleneck right now is personnel, we, have a great product. We want to get it out there in the market and finding good people to help with going out there and promoting. Like I'll be honest with you Mike, we just launched in March right, and I won't let anybody take a demo. I'm taking them all, because you know, I want to meet the customer, I want to understand their pain points. I want to know, if, what we have, even works for them or not and. I feel that if I put that in somebody else's hand, that they're gonna come very come off, very salesy. You know like pushy, and sale and that's not the point here. You know, it's not a, it's not a product that I’m saying, “Hey you need to use this and pay me a fee to use it.” It’s, “What are you doing right now? Can this help you? Why don't you try it out?”

If it works, it works, if it doesn't, it doesn't. But we have bigger plans, if we can build a big network of independent pharmacies utilizing this, you can open up other doors. So, I'm the bottleneck, put it that way, I need to learn how, to delegate a little bit more, or, or let go as people would say. And not be such a, kind of control freak like I have with the other company. But with RxMile, I kind of feel like yeah that that's probably I’m the bottleneck.

MK: I imagine the value of doing your own demos, for example I imagine part of that is how you do it, but I imagine you get a ton of feedback, a ton of amazing information, from these people that, I don't know if that would get to you the same way, if you had someone else, they might just say nope we don't have that feature, and then go on where if you hear that a few times you might piece something together in your head.

KV: Exactly. You're absolutely right, I don't want to miss any of the conversation you know I, if it's a client who could utilize our services or our software could work for them. I want to know their pain points and I think the best way to do that is by me communicating.

You know a lot of people say, “Hey you look like a small company because you know you put out a post, hey have a, have a zoom meeting with the CEO and founder. Now you look small.” I'm like I don't care, you know it's fine, I mean, I actually want to have that meeting, I want to speak to them right but then you don't look like a big company when you're trying to.

I’m not into that you know, it's not about the fluff yet. It's about market fit, it's about people who need something that could work for them and seeing if it isn't ,how can I adapt to fix it? Or to make it be. We're customized technology, my partner can customize, based on what a long-term care facility type of pharmacy, you know sending 30 things to one location, we need identification for you know, depending on what it is.

MK: I won't reveal this person but it's a person rather close to me and he's got a company in one part of the country, and there's this other person that has an apartment in another part of the country, so that's their second mailing address and all they do is someone mails it to them, he just turns around and sends it to this guy, you know and then all of his phone extensions are like one person in the company all the phone extensions are like 302 and 438.

KV: And it's all going to one place?

MK: I'll joke with him you know, he picks up the phone and then he changes his voice and things like that.

So now, there's an author out, his name is Michael Gerber and he wrote this book, The e-myth, and he talks about how in a newer business you're wearing a ton of hats. One of the important things to do is start labeling those hats when you want to maybe stop doing less work. At least you have those functions set up, and you have some of the job description written down, and so on.  If you had like five people in your company now and they were all executives, what would you like to have? Would you have a head of marketing? Would you have a head of this ahead of that? What would you have if you had like five big shots in your company right now?

KV: I would say marketing and sales would be the first two most important things. Somebody you know who can head the sales part, the marketing part, you know a customer success type of thing, somebody who communicates with the customers. You know, keeps you know that 30 day, once every 30 days communication. Seeing if there's any enhancements or updates and things needed. CFO to manage all that. Which you know, I'm the CEO so I'm not that, and I would think that, and a real powerful CEO who I believe has got a background not per se, in logistics but more per se, in pharmacy. So they understand the lingo, they understand, you know what a person is asking for and they understand why that pharmacy needs this type of reporting because the physician group they're working with.

So that that would be four and then the fifth one I would say would be you know HR, you know, human resources somebody who is there for these people for the employees, for the drivers, in our case it wouldn't be drivers it would just be pharmacies right. But development is obviously key. My partner, you know, having somebody to help with that the CTO position instead of you know just a CIO position. But yeah, I mean that would be kind of that kind of spearheads, I believe every single component.

MK: If you had an unlimited marketing budget and let's think about some of the things that are available to pharmacy companies, whether it's online, whether it's magazine, whether it's a salesperson whether it's a pharmacy convention, whether it's underwriting some you know pharmacy award or something like that. Where would you break up that percentage of those things I mentioned? Maybe you have a ton of other things too. Where do you think your biggest impact would be for RxMile in getting customers then out of those different marketing pathways?

KV:  So, I know that the world we live in today, digital marketing is key, right building a digital footprint I agree 100% and I, do a lot of it through my Linkedin page. We do some through our, our business LinkedIn page, Facebook page, and all that, but you know you always got to look at the factor of what you're marketing and who you're marketing to.

So for me, the ground game is most important. I would want one sales marketing rep that understands pharmacy, preferably somebody who's worked in the space uh maybe a sales rep for McKesson or American sources. I would want boots on the ground, I would want somebody who can physically go and visit these people because you know, the, digital marketing game is amazing, is cool, you know I get I get some calendarly invites, and I do the meetings and we close the client, but you know these people, it’s that touch right? It’s somebody walking in there, who understands what they need, and sees what they're doing and if there's any pain points what we can do to help fix it.

You know they might walk out and say, “You got this thing down packed. You don't even need us.” You know, but you know if they're using my technology, that could be true!  You know we, have many clients that a lot of the pharmacy software platforms, have a lot of delivery modules. You know Pioneer? We work with them; we're integrated with some of them liberty pioneer FSI. We just kind of show them you know. It's a little bit more intense as far as, the route optimizing, the live tracking for the patients. A physician portal for example. If the physicians want full transparency, you're talking about at the point of care, putting a prescription through EMR, patient receives text message of a link of their medication to track, they drive home and then it's delivered, um that's the real deal. That's some service that today I always tell people. You know, I guarantee you, nobody's offering that service right now in a doctor's office today. Have you been in your doctor's office where they're telling you you, want your meds delivered for free within two hours, you say yes and all of a sudden you get a link which tracks your package live and you get home and it's there that's, that's, that's, the ultimate goal and game plan.

MK: It's important for leaders like you to give a vision of what can happen more and what I mean by that is, most people 40 years ago, didn't say oh I’ve got this eight-track cassette tape, someday I want to have a five inch laser disc. You know people didn't think that. They had needs maybe, but they didn't know what the hell it was going to look like at all, and so a lot of times, I imagine pharmacies, they think they have it all under control. It's like, Kunal, I don't need you. You know Mrs Jones gets her medicine, she says when she needs it. It's like yeah, but does the doctor know that she got it? He was worried that Mrs Jones wasn't actually gonna take their medicine and now he gets alerted that she now has her medicine in her home. You know that kind of stuff, that it's like, oh we didn't think about that. You know, so there's all kinds of ideas that you can bring to the table that pharmacists didn't think about it just as much as someone with a vinyl record thought about a five-inch laser disc.

KV: Yeah, I mean, I have a good friend of mine Dr Leckie, he works with CBS in South Florida market and he says, majority of the calls he's getting is from physicians saying, “Hey did that patient pick up the script?” They're not even calling about giving a script, they're calling to find out if the patient picked up the script right. And it's always around the end of the month when they got to reach their quality measures, make sure they reach their 80% threshold on certain disease states.

MK: Oh, that's interesting, because the doctors get brownie points if they know that the patient got their medicine filled?

KV: Well, how it works is, right, there are certain disease states which are triple weighted as part D quality measures. Cholesterol, uh blood pressure, statin drugs, the patient who's under a medicare advantage plan full risk, they require an 80% threshold as far as fill rate, okay. So I'm going to give you an example, you've got a patient who receives a 90-day fill for their statin drug. With three refills. Doctor sends it to the pharmacy, they fill 90 days, boom, refill another 90 days, and then the third one, now they've got 270 pills. Nine divided by 12 is 78 percent. Now, that pharmacy, contacts the patient saying, “Hey we're going to send you out or you need to come pick up your next.” You know, the doctor sends a refill for another 90 days. Patient says, “I don't need it, I've got more than enough.” At that point a CVS or Walgreens employee says, “Okay, no problem thank you bye.” 78, which is lower than 80 percent, that patient just failed the quality measure. Now if it was an independent pharmacy they'll say, “You know what, Joe, how about I send you at least a 30-day supply you may change your insurance come January, at least you have it in case you need it in stock.” The Patient is, “All right, no problem.” Now they've sent it. Now they got 10 out of 12 which is 82 percent. They've reached the threshold.

You know there's other factors in regards to you know, free Metformin from certain places, paying cash pricing on medications that have a zero dollar copay anyway, but now the insurance doesn't know that the patient even got the med because the patient was marketed by let's say Mark Cuban's pharmacy, that hey this is 1.99 right?

Like, when he marks it, he markets it as a cash paying pharmacy that does not accept insurance. It shouldn't be marketed to 65 or older geriatric population that have a medicare advantage plan, because they're already got a zero-dollar copay on most of their generic drugs anyways. So, all you've done here is, diverted them to use something where they're paying for it when they weren't probably gonna pay for it. But, at the same token, now they're paying eight dollars, five-dollar shipping fee, three dollar dispensing fee. Uh, for a drug that has a zero-dollar copay how does that make sense?

MK: I probably should know more about this, but the doctor I know, there's pharmacy star ratings and stuff, but the doctor then actually benefits too from having 80 fill right?

KV: Yes, so to give you an example when I owned my pharmacy I took a case study of 1000 diabetic patients which were using CVS. Walgreens and the pharmacy which my uncle owned, I made sure that they were all the same MRA risk score, so therefore it was the same. It wasn't like an outer layer, somebody who was a polyform. And based on that, they were saving a hundred dollars per member per month. That's huge when you talk about 30,000 members so you know in reality, these doctors when they send a script out to CVS, Walgreens or a supermarket it becomes a black hole.

They don't know whether it gets picked up, they don't know whether the patient had an issue for transportation to go pick it up, whether the patient couldn't afford the copay and didn't go get it or, just whether the patient just neglected to go get it. Like people say, what? 50% of prescribed prescription drugs are never filled.

You know I asked my friend that all that stuff that's sitting in the back at Walgreens and CVS, when you walk in, you see all them scripts sitting in the back. What percentage of those have a zero-dollar copay? Like 70/80 percent of them.

Well, if they don't come pick that up you got to reverse avoid the claim! Tell your tech to go deliver it. Everybody lives two miles away!

MK: If the doctor were to find out somehow, let's just say in a, in some world that

they find out about the status of this, would they do anything? Or, I understand

their rates go down, they might say oh we're going to lose money on that patient but what can they do? Are you just saying that there's a comfort in them knowing that certain pharmacies try harder for them?

KV:100%, 100%, there's a comfort and, and that's why a lot of these MSOs which are managed service organizations they have their own pharmacy, and they do their own, you heard of ACOs right? the whole purpose of an ACO, accountable care organization, was to kind of create some sort of a monopoly and everybody stays within the same network right. You go to this specialist, you go to this place to do your blood, you go to this pharmacy to get your meds, and you go to this primary care doctor. The reason they do that is they want to control the cost.

MK: Control the cost and maybe force percentage?

KV: Yeah, control the cost, force percentage, have more of a bargaining ship when they're speaking to the to their insurance companies that they negotiate with every year. You know, there's so many different factors that on a pharmacy end we don't even realize that is being dealt with on the HMO and the MSO end, and you know I always say, what is the doctor's crutch? It's his prescription pad. In modern day, it's his EMR. When you go and see a doctor it's probably a 95 chance that you're getting a prescription written right? Now what's the purpose of you going to see a doctor? He evaluates you, writes a script, and sends it to a black hole and then after that forgets about it and we don't know what happens right. So that's the broken part of the whole circle right. The doctor should know that Sean Doe did receive this medication.

MK: Let's take finances out of it. Let's just talk from a medical purpose. I mean they can maybe tell because they didn't get as many refill requests as they thought they would get through the year, but if I go to my doctor a year later and they don't know what my compliance was, and I'm probably not going to be honest, I’D be honest, but the average person is probably not going to be honest, then they don't know. They don't know how it's working and so on and what adjustments to make.

KV: Yeah, and it ultimately creates admissions and readmissions and that's the burn. 10,000 minimum pop every time a patient goes in the hospital. That's minimal right. When, a patient leaves the hospital there needs to be a med wreck. You need somebody that can make sure that they're taking the appropriate medications. And especially the people using mail order, their pharmacy inside their cabinet at their home, people are removing all the stuff that they're not going to be taking now because they just had a whole medications reconciliation after leaving the hospital. You know, there's so many different components to it but it all boils down to keeping the patient out of the hospital, keeping the patient adherent to their medication regimen, and that's where independent pharmacies have always won. That's where independent pharmacies have always been ranked one out of any other pharmacy right.

Today, right now the independent pharmacy market, essentially, has an Uber delivery model of prescription delivery. Like if you got these independent pharmacies, right now are utilizing either, you know they outsource, but majority, utilize their own drivers right. The value of these tens of thousands of drivers maybe hundreds of thousands, for these tens of thousands of independent pharmacies. delivering to these hundred thousands of homes every day, why would Mark Cuban use a true pill? He'd rather drive all that business to the independent pharmacy market because they're going to be delivering it for free same day. At the end of the day, you can't fix something which is great like Amazon prime today.

It's pretty hard to replace that because it's already reached the pinnacle. You're getting your delivery next day, or you're getting it same day. You can't make it any better. But you sure as hell can make it better when you're dealing with a mail-order pharmacy.

And you know today, right now, he's partnering with Trupill which is a mail order pharmacy. Because they have scale, they can go nationwide, you know. But the ultimate goal would be that patient needs to deliver the same day. Well who can do that? Unless you're going to go and buy 10,000 brick and mortars, the independent pharmacy market can do that.

MK: I think what the problem with pharmacy though, is that every pharmacy, especially independent, independent's a good word for them because you've got a lot of owners who've got some good ideas, but some wacky ideas and I think it would be hard to send this information out and trust that, independent pharmacies are going to do something similar enough to make it look like one company.

KV: I agree. But the point is that they're already doing it. Right. They're already doing it, they're doing it, as in a silo, right, they're doing it as individuals as, as a silo. Today there's no value in the 20 or 30 clients that I may have under RxMile, that are in silo doing their own deliveries. 10,000 of them right, but things can change right. Once you've grown that network, once you show that you have that network, now you have a value, and that value could come back to the independent pharmacy.

MK: Some of the PBMs they'll say like, you can't mail such and such. Can they do the same for delivery? Could they say you're, you're not able to deliver you can only deliver a certain percent of your medicine?

KV: Yeah. Some contracts have that you can only deliver a certain percent, which is when they say that, they mean you can only outsource a certain percent.

MK: Oh, they won't put a clamp on your own?

KV: They can't put a clamp on you like if today, right now I, have a pharmacy owner and I'm a 100% delivery model and I have my own staff going out there and delivering in the neighborhoods that's completely fine. They can't do nothing about that. There's a 50-mile radius clause sometimes that they have in some PBM contracts.

MK: But what if you have an LLC? That's a different company!

KV: Well, the thing is that most of these independent pharmacies are pretty much utilizing their own drivers. Now as their LLC is still under the same entity, right so it's not considered a third party right?

A third party is somebody who does something for not just you, but they do it for Tom Bob and Joe. This person is strictly working for you they're doing it for you and not for everybody right that that's the differentiator with the third party.

MK: I try to tell this to people. Let's say you're going to open up a shoe store, you know, and or a pizza store or something like that. It's like, okay but those people are already buying shoes and they're already eating pizza. They might not be terribly happy with it, but they have shoes on their feet and they're eating pizza. In other words, it'd be different if you moved into a new area outside of Vegas where there's like a thousand new homes, now those people need it but you have to be a lot better or something to go into a market where everybody's relatively satisfied, and I think you get that in pharmacy right now. You know the average little old lady is relatively at least happy with what they're getting from their local pharmacy and it's hard for people to come in and disrupt that I think.

KV: I agree, you know in regards to Mark Cuban, bringing costs down for people who don't have insurance. That's amazing. That's great, you know I think that that's a great cause right because there are a lot of uninsured Americans.

And some of these prices are ridiculous when you're paying, and he's making sure that he can be cheaper. I don't think he's in it for the profitability per se. I think this is more of a passion project for him. So, you know I think that he's going the right path, but he's got a monster to deal with when he decides to accept insurance, or when he decides to get into the manufacturing side, or the wholesaling side.

MK: It's a monster.

KV: It's a monster to deal with, and you know like you said, there's so many different type of independent pharmacy owners. One that kind of is with it, one that might be this way. Right, but you know we just got to support the cause because he's finding the same monster that we're fighting.

MK: In your company, if money was unlimited, what would you do with your company that would just be far out money or ability? What would you do that was really far out but you just can't do it now?

KV: My Uncle is my angel investor and I told him what I'm about to tell you and he told me to get the hell out of his room. I said, “I want to give this software free to everybody.” I want them to see the value and utilize this software. If I can figure out what the hosting cost would cost me per client, and for me to get this into 10 000 independent pharmacies in this country, and let's say it's going to cost me 20 million dollars to host that. To make sure that everything is running and operating I want to, I’ll burn 20 million dollars to do that. And the reason I feel confident about that is because it’s an easier way for me to enter in number one.

Obviously, I have enough faith in my product, that once somebody utilizes it they'll see the value to it. And the value that they can get from it with the bells and you know we got attrition reports to make, minimize attrition rates, retention reports met, med delivery synchronization, different things but you know at that point, you've built the network. You know you're looking at a map with 10 000 pins and maybe 50,000 pins of drivers and maybe a hundred thousand pins of homes that are all being done in one day. At that point, you could technically make mail order pharmacy obsolete because why would somebody expect that when they can get a same-day delivery free right. Why wait three to five days?

MK: I've got a couple software companies that come to mind that I use. One is monday.com, one is oneiwork.com, and both of those are set up like you're saying somewhat, or maybe you're alluding to.  They both have free entry programs and then, you know once you go over certain this or that or have more than 10 employees you know this or that kicks in. Is that something that you have then considered? Where RxMile is free to everybody, for 50 deliveries a week is free, or something like that you know. 10 a day. So, you get it in the hands of everybody but anybody who's got a more serious delivery is paying for it but everybody can touch it.

KV: Got it, so, uh we are right now depending on the pharmacy and the conversation that I'm pretty much having. And making that decision instantly on impulse, providing 30 to 90 days, maybe even six months free trial. Somebody who's doing 500 packages a day, 40 million ARR, dealing with maintenance medications, delivering, you know, got 20 drivers, You use it for six months, see how it's going to work for you, and by that time they understand the value.

You know we integrate with their software, it's almost like we become a part of the network effect of their workflow. So at that point, their patients are happy because they're tracking packages live, the doctors are happy with the marketing promotional pieces, the pharmacy is saying look at the transparency we can provide you and your patient, the drivers are happy because they got a stupid proof app to tell them exactly what to do it lets them know they're at the wrong home, it tells them exactly what they need to do for each individual delivery, and then of course the pharmacy staff right, they become used to it right.

People always ask me what do you think your lifetime value is going to be with RxMile? I'd say 10 years plus. I say 10 years plus, and the reason I confidently feel that way is I always make a joke, it's not like the Chinese restaurant anymore right. The son decided he doesn't want to run the Chinese; he don't want to own a Chinese restaurant. He wants to move on. You don't see as many now, you see a lot of Thai restaurants now though!

So, in pharmacy that's not changed. It's still being passed on to the son, it's still being passed on to the daughter, or a family member. I don't see the independent pharmacy going anywhere but staying intact and maybe even growing. I believe with this FTC probe, and different things that are going on, that people might actually come out of pharmacy school and want to own a pharmacy again. That's crazy for me to say that but yeah. I believe that we're not too far away from that.

MK: Once you know 5000 pharmacies have RxMiles, something like that, let's just say a ton of pharmacies have it, is there a way to connect all those 5 000 some way is there a value in connecting them somehow?

KV: The value is going to be in the data, and this data is not data to make me, make me, more successful, make these independent pharmacies more successful, right.

When you have these data points of hundreds of millions of patients that you can go back to the insurance companies with and, and say how are these patients performing on a quality perspective versus patients that are using your mail order? Or versus patients that are using whoever the hell they decide to send it to, CVS, Walgreens, Publix, Kroger or whatever? That data is going to be what brings that value component.

I see, maybe one day, that there'll be a per member, per month, reimbursement towards pharmacies who are managing your life for an insurance company for that patient right. And in that it, covers your cost of your reimbursement, it covers your cost of your delivery.

The other component is when you've got let's say, 5000 independent pharmacies, nationwide which are doing this. You, have this free same day delivery solution that nobody else has, because now you're, you're talking to these 5,000 pharmacy owners and saying, “Can I present us to somebody like a Mark Cuban or to somebody like an Amazon pharmacy?”

Because remember, they're mail orders. Mail order can never compete with same day delivery. It’s impossible. Mail order will never compete with the convenience of having access direct to a pharmacist. Direct, you can literally walk in there you can call and say i'm feeling this way. You're asking for the name of the pharmacist there's so much value there man. If you're lucky, a doctor will see you four times a year, every 90 days. So, you see a pharmacist much more right, and especially if you're delivering to that patient. A member of your staff is going to their home knocking on their door maybe 12 to 15, 20, 30, 40 times a year right? So, out of those four times they see the doctor, the pharmacy got some of the rest. 95% of the time your patient will see the same driver and, and that really creates a continuity. It creates the longevity of the patient working with that pharmacy.

MK: We've got customers that come in you know after five years, and they're like oh you're Mike you know and then they said, “I wish i wouldn't have seen you.” They just want a certain image in their head.

Kunal, RxMile.com, I think there's enough pain points in this delivery setup where you're going to have a lot of people coming on at least to take a look. All right Kunal, oh by the way, cool logo you got, you got the map thing like you are here into your capsule that's great!

KV: I was trying to figure out the name for the company right, I was looking up on GoDaddy, package pulse, whenever they were like four or five different things and everything was five thousand dollars, ten thousand dollars, fifteen thousand. Two words and then, one morning I woke up finally, and I'm like, you know what, I'm just gonna have to bite the bullet. I'm like, you know what? Let me, try this real quick. I typed in RxMile. It was available. Somebody messed up. I paid 1.99.

MK: Who made your logo?

KV: There's a company called 99 designs.

MK: I've heard of them and then they give you a few options and you can buy different packages and things like that.

KV: They actually give you like 99 options and there was a person I can't remember his name but he was based out of somewhere in Western Europe who made the best logo.

MK: You now keep up the good work and thanks for all you're doing to help out the profession appreciate that.

KV: Yes, Mike and you, keep up all the good work. You're doing amazing job. I love your podcast. I appreciate the opportunity for you giving me some time.

MK: Best wishes and we'll talk to you soon thank you.