[treis]

From the time this was posted two days ago:

This keeps showing up but it's total bullshit. Cuban wants to take 15% of the transaction for running a web site and processing payment. They're not manufacturing drugs. They're not buying drugs. They're not shipping drugs. They're not doing anything at all besides taking your order and giving it to someone to do all those things. It's not a charity. It's a profitable business and a very profitable one at that.

Oh yeah, and the prices aren't lower than what you can get using GoodRX.

[user_7832]

I'm pretty sure you're free to compete with them if you think it's profitable.

In reality I'd expect that 15% to be necessary if they want the company to survive after some years. There are tons of not so visible overheads and costs, and it (apparently) has taken a billionaire to be able to start such a company (disclaimer: I have no idea what GoodRx is).

[treis]

>I'm pretty sure you're free to compete with them if you think it's profitable.

If I could generate the amount of free advertising Cuban's getting I would.

[spywaregorilla]

Was there someone around previously who could take my order and give me the drugs at those prices? I'm not convinced this is true. I'm not familiar with GoodRx but they appear to be a coupon aggregator which is not the same thing

[treis]

Depending on the drug, yes. Walmart & Amazon have cheap generics and so do many regional grocery stores.

[spywaregorilla]

> Depending on the drug

That seems like the value prop though. The cases where it's not, and the alternatives are absurdly expensive. People seem to be focusing on the median case where it's marginally more expensive or cheaper

[0des]

I mean if you're old enough to remember broadcast.com I don't think anybody had high expectations.

[whitepoplar]

I'm curious, what was broadcast.com like? What were the issues?

[pc86]

It seems to have worked out for him.

[criddell]

How does GoodRX work?

[treis]

Part of how the government determines the price it pays for drugs is based on the retail price. That (among other reasons) gives manufacturers incentive to have crazy list prices. A drug that sells for $50 might have a list price of $1,000.

Enter insurance companies. They don't want to pay $1,000 for a $50 drug so they negotiate. But there's too many insurance companies for them to have good leverage and efficiencies in negotiation.

Enter Pharmacy Benefits Managers. They get hired by insurance companies to negotiate with drug companies and pharmacies. Thus the buying power is pooled and they only have to pay people to negotiate one time.

GoodRX is like the last category. Except that instead of getting paid by insurance companies they sell user data and collect some fees from pharmacies and drug manufacturers.

[madmax108]

This is such a great, useful explainer (esp. for someone outside the US who don't really know how these systems are set up in the US). Thanks!

[bmelton]

They're a deal site, basically

You need <drug> in <area>

They search pharmacy prices in <area> for <drug> + <generic versions of drug>

You get back a list of where it is cheapest to have <drug> fulfilled by a pharmacy in <area>

[SeanLuke]

This isn't correct. GoodRx makes money by partnering with Pharmacy Benefits Managers. It's taking advantage of a loophole in the US's extraordinarily convoluted drug pricing system.

[criddell]

Do you know more about how this works? I know it's not just a coupon scheme or search engine and I'd like to know how it works under the covers.

[woobar]

I think it is a little more than just a drug search engine. If you come to to a local pharmacy the price of a generic drug will $50, but if you show them the GoodRx referral with a price quote they will sell it for $5. Not sure what their relationship with the pharmacies are.