A startup that could be Amazon's next takeover target just raised $50 million to help people manage their prescriptions
- Alto Pharmacy, a pharmacy that delivers medications in San Francisco, Los Angeles, and Orange County, just raised $50 million to expand its reach.
- The funding comes from investors including Greenoaks Capital, Zola Capital and Jackson Square Ventures.
- The plan is to use it to expand Alto's geographical presence, as well as go deeper into caring for particular conditions such as HIV.
A pharmacy that wants to deliver prescription drugs and help manage chronic diseases just raised an additional $50 million.
San Francisco-based Alto Pharmacy said Wednesday that it had raised the funding from investors including Greenoaks Capital, Zola Capital and Jackson Square Ventures, bringing its total raised to $73 million.
Alto CEO Matt Gamache-Asselin told Business Insider the funding would be used for three purposes: expanding geographically; broadening the conditions the company can help patients manage; and running clinical trials to validate whether the startup's approach can impact patients' health.
It's a goal other pharmacists are exploring as well. Business Insider spoke with pharmacists who, to survive amid pressures from retail pharmacies and players like Amazon, have gotten creative and are looking to get paid for providing healthcare to their customers, rather than solely for the pills they dispense.
Here's how that works for Alto: When a doctor prescribes a medication to a patient, it can send it to a retail pharmacy or to Alto. From there, Gamache-Asselin said the company has built software to see if there are more affordable alternatives if the medication is too expensive. Ideally, Alto would like to show that by helping patients with chronic conditions - such as HIV - stay on their medications, it's making those patients healthier and saving health plans money.
Read more: Amazon is threatening the future of independent pharmacies. Here's how they're fighting back.
Gamache-Asselin said Alto's already working with some health insurers, though he declined to disclose which ones. In June, Alto brought on Amazon alum Scott Shaw as its vice president of care to head up that operation.
Alto, which was founded in June 2015, isn't alone in the prescription delivery via couriers business. Others, including New York City-based Capsule, which has raised $70 million in funding, are taking a similar approach to getting folks their medications. Independent pharmacies as well as retail giants like CVS Health have been exploring ways to deliver medications to people at home to simplify the process of going to the pharmacy as well.
Right now, Alto can send out couriers to about a 50-mile radius from its pharmacies in San Francisco, Los Angeles, and Orange County. It's also planning to launch into mail-order services.
In July, analysts at Bernstein singled Alto as one of 10 potential M&A targets for companies like Walmart, CVS, and Amazon.
Amazon in June acquired online pharmacy PillPack launching it into the prescription drug business. PillPack mails prescriptions that are packaged together based on when they need to be taken, putting it in a good spot to handle prescriptions for elderly people who tend to have more prescriptions. That could still leave room for Amazon to pick up another pharmacy startup that has a more on-demand approach.
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