Geoffrey Chaiken, co-founder and CEO of Blink Health, says he and his brother, Matthew, have a simple mission: To make prescriptions affordable for everybody in the country.
Geoffrey Chaiken, left, and Matthew Chaiken started Blink Health to bring transparency to drug prices.
Alex Welsh for the New York Times
“The way we’re doing that is by moving the category online,” Chaiken said. “When a category moves online, it brings transparency. You see the price before you get to the counter.”
Before Blink Health, prescription drugs were about the only thing you couldn’t buy online, Chaiken says. They were also unique in the sense that you didn’t know the price up front. To make matters worse, the wealthiest among us are typically paying the least for their drugs and the poorest are paying the most, because they either don’t have insurance, or they have bad insurance.
“That’s crazy, especially since 90% of generics are like white bread,” Chaiken said. “There would be a riot if three different people were paying three different prices for white bread, with the wealthiest paying the least and the poorest paying the most. That’s what’s happening every day at the pharmacy.”
Chaiken, 37, points out that one-third of all prescriptions are left at the pharmacy counter because of sticker shock. That has a huge impact on overall health care costs, because people aren’t getting the treatment they need.
The other thing Blink is doing is lowering prices by aggregating demand on a national basis, Chaiken says. The company launched in February 2016 and currently has more than 600,000 customers, according to Chaiken. It uses the leverage of its customer base to negotiate directly with pharmacies, as opposed to going through the pharmacy benefit managers that currently control the business.
“By cutting out the middleman we’re able to reimburse pharmacies more money than they’re used to, and provide patients lower prices than they had before,” Chaiken said.
Chaiken says Blink deals with nearly every pharmacy in the country, except Walgreens and CVS. The company works with Wal-Mart, Costco, and “all the grocers,” including Kroger, Albertsons and Publix.
With the Blink app you can order your prescriptions on your smartphone, and save money.
Courtesy Blink Health
“A patient will never use Blink unless it’s less than the insurance co-pay,” Chaiken said. “All transactions on Blink are fully refundable. We don’t want them to use it unless they’re saving money.”
It’s free to join Blink Health, as long as you agree to become a member.
“We’re a patient co-op effectively,” Chaiken said. “You now give us the right to negotiate on your behalf with pharmacies. Today, you’re not in a position as one individual to negotiate with Kroger.”
But as one of Blink’s 600,000 members, you do have that power, according to Chaiken. Also, Blink employs a staff of professional negotiators to bargain with pharmacies.
Blink offers three prices to its members. An “everyday low price,” available in all 35,000 pharmacies in Blink’s network. Then there’s a “smart deal” price, available at the lowest advertised pharmacy in every community, if you’re willing to go there. Finally, there’s an even lower price if you agree to free, two-day home delivery.
Using the example of generic Lipitor, Chaiken says the respective prices for a month’s supply would be $8.93, $6.10, and $4.99.
Chaiken declines to disclose Blink’s profit margin. The company grew very quickly, he said, and experienced an “allergic reaction” from the incumbents in the industry, including CVS, which owns Caremark and Express Scripts, the two largest pharmacy benefit managers in the country.
“CVS kicked us out of their stores and did a host of things that made it difficult for us to operate,” Chaiken said.
In response, Chaiken has been vertically integrating Blink. He hired Susan Lang, a former senior executive at Express Scripts who was in charge of the supply chain and drug pricing, overseeing a $50 billion portfolio of drugs.
Blink Health is bypassing pharmacy benefit managers to work directly with its 600,000 members.
Courtesy Blink Health
“We built all the access pharmacy benefit managers have so we weren’t dependent on existing members of the supply chain,” Chaiken said. “Instead of supporting insurance companies we’re no longer dependent on any third party. We do everything ourselves.”
Blink has about 250 employees based in New York, with additional offices in St. Louis and Boston. The company plans to open more offices around the country, according to Chaiken.
Blink has also attracted former Amazon, and Microsoft executives to its ranks, recently announcing the hiring of three former Amazon executives, Bharath Chinamanthur, Christopher Plambeck and Madan Nagaldinne.
“Blink has a purposeful mission to get behind and an opportunity to use data and technology to transform a massive industry,” Plambeck said in a statement. “Improving access to affordable medications will impact the lives of hundreds of millions of people.”
Nagaldinne noted that, “Despite attempts by some powerful incumbent forces to set us back, Blink is thriving.”
Chaiken says hiring people like the three former Amazon executives will help Blink take on the massive challenge posed by its competitors.
“I didn’t go into this with the intention of fighting or taking these corporations on, but when you have hundreds of thousands of patients you’re responsible for, even if you don’t want to fight you feel compelled to fight,” he said. “If we don’t do it, no one else is going to do it for them.”
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