With a focus on generic drugs, online pharmacy startup Truemeds helps slash medicine bills by 47 pc
Healthcare costs have been rising significantly over the last few years, on the back of India’s growing population, aging seniors, disease incidence, use of medical services, rising costs of medicines, and other factors.
Across the country, people who have to take medicines on a daily basis largely spend from their pocket and end up paying large sums over the years.
Mumbai-based healthtech startupaims to help change this by lowering the price of medicine bills by “as much as 47 percent” by providing alternative drugs.
The Mumbai-based online pharmacy was founded in 2019 by Akshat Nayyar and Dr Kunal Wani, who earlier worked with a pharmaceutical company. The duo was intrigued by the prospect of generic drugs and how they could help patients cut medicine bills.
Truemeds claims to slash pharmacy bills by 47 percent
According to the US FDA, a generic drug is a medication created to be the same as an already marketed brand-name drug in dosage form, safety, strength, route of administration, quality, performance characteristics, and intended use.
These similarities help demonstrate bioequivalence, which means that a generic medicine works in the same way and provides the same clinical benefit as the brand-name medicine.
Across the world, the pharmaceutical market comprises players who hold original patents and those who work off patents (generics). According to industry estimates, around 95 percent of drugs available in the Indian market are off-patent.
Branded drugs are more expensive as companies undertake substantial sales and marketing activity for these medicines. Traded generics, meanwhile, offer the same efficacy but at lower costs.
The founders of Truemeds saw an opportunity in bringing these lower-priced drugs to chronic patients.
“We wanted to solve the challenge of affordability in medicines so that patients can have them as a right rather than a privilege,” Akshat says.
The founders spent some time researching this industry and realised that they could tap technology to bring down regular medical bills. They received a seed investment from the Managing Director of Abbot India, the company where they both worked, and started up.
How the model works
On Truemeds, a patient needs to upload the prescription on the site. The startup has built algorithms that scan through over two lakh drugs and suggest precise alternatives that are priced lower.
The online pharmacy also has a panel of doctors to address any doubts that patients may have while ordering these generic drugs as they are not those prescribed by their doctor. Only after all this are medicines sold and delivered.
“Patients are generally not aware of available alternatives and we suggest only quality drugs with the same efficacy levels,” Akshat says.
Truemeds initially started as a business of recommending alternative medicines but the team later realised that consumers needed hand-holding through the entire process, even post-delivery.
Akshat says on average, Truemeds is able to ensure savings of 47 percent for customers if they switch the brand of drugs. If they decide not to opt for the generic drug, it provides medicines at a standard 20 percent discount.
The startup is able to offer savings due to two factors—traded generic drugs are available at a lower price, and the company absorbs the margin costs of sales and marketing (so they are not passed on to the consumer).
The pharmaceutical industry is quite complex, with a mix of relationships among manufacturers, stockists or distributors, and doctors.
Truemeds works with over 150 distributors
Truemeds, which now has a 100-member team, engages with both pharmaceutical companies and distributors to source drugs.
Akshat says, “We work with over 150 distributors and there is no reason to bypass them as they add value across the entire supply chain.”
Truemeds has partnerships with multiple logistics companies like Delhivery, Blue Dart, Xpressbees etc.
Growth and goal
Truemeds initially started operations in Mumbai, and within a short period of time, covered the state of Maharashtra. It has now expanded to other cities like Delhi, Kolkata, and Bengaluru where it has set up fulfilment centres. The startup has plans to cover more locations.
COVID-19 brought certain tailwinds to the Truemeds’ business as consumers were spending more time online and also looking at avenues where they could save money, given the impact the pandemic had on livelihoods.
“Since April 2020 we have been growing 78X and supplying medicines all over the country,” Akshat says. The startup serves 18,000 pin codes across the country.
Truemeds claims to deliver around one lakh orders a month, and says it is growing at an average of 20 percent month-on-month. The goal is to take it to five lakh orders by March 2023.
The startup has raised around $27 million in funding to date from investors such as WestBridge Capital, InfoEdge Ventures, Indian Angel Network Fund etc.
Market and outlook
The pharmaceutical market in India is $25 billion in size, according to Akshat, and he believes Truemeds has just scratched the surface.
Citing statistics, he says the share of prescription generics in the US has grown from 40 percent in 2005 to 86 percent. In India, the share is at just 8 percent, and is expected to reach 45 percent by 2025.
“We would like to be the leader in the space of traded generics with the core focus being the welfare of the patient,” Akshat says.
The competition for Truemeds comes from other healthtech startups like Medcard, Stay Happy, and Dawaa Dost, but the co-founder believes it is better to have more players as the need of the hour is to “evangelise alternate drugs or traded generics”.
The primary challenge is that patients do not shift easily towards lower-priced generic drugs, which makes it vital to create awareness.
“Our focus is on meeting customer expectations and giving them a good overall experience,” Akshat says.