OR_Sempre Health_Satish Srinivasan: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.
Kyle Wildnauer-Haigney:
Hey everyone, welcome back to the Outcomes Rocket Farm Podcast. I’m your host, Kyle Wildnauer-Haigney, and today I have the distinct pleasure of hosting Satish Srinivasan. He’s a founder and CEO of DiRx, the first Digital Pharmacy Corporation with a direct from manufacturer sourcing model and national coverage across the US. He previously spent 25-plus years in building and managing multiple US generic pharmaceutical firms and businesses in leadership positions. Most notable positions included his tenure as the president and CEO of Rising Pharmaceuticals until its M&A transaction in 2016 and as President and CEO of Orchid Pharma until the acquisition of his portfolio by Hospira in 2010. Founding DiRx in August 2020 with a disruptive model that reduces the intermediary layers between manufacturers and consumers and brings down costs of prescriptions generics to as low as $3 dollars per month with no insurance required. DiRx recently pioneered the country’s first annual savings plan that enables Americans to access over 1000 prescription generics for fixed annual pre-payments equivalent to as low as $10 dollars per month, that’s a great price. Satish has an MS in pharmacy administration from the University of Illinois at Chicago and a bachelor’s in pharma degree from the University of Mumbai. Welcome Satish, to the show!
Satish Srinivasan:
It’s my pleasure, Kyle. Thank you for having me on the show.
Kyle Wildnauer-Haigney:
So maybe to kick it off, I’d love to hear about what inspires your work in healthcare.
Satish Srinivasan:
Sure. See, I’ve spent over 25 years in generic pharmaceuticals, so that’s one angle of healthcare, the actual products that people consume, prescription products. And I’ve been noticing over a period of time that, you know, generics by definition are supposed to be inexpensive and save a lot of money to the system. And while they still do, you know, related to brands and specialty products, you know, I could still see a big difference between what they actually cost and what is being charged to the system. The system is riddled with a lot of reimbursement-based models and a lot of middlemen, and it has somehow removed the connectivity between real cost and what’s being charged. Since many Americans are inadequately insured, they are struggling to even afford their day-to-day prescription medications and take care of their health. And I said, someone’s got to do something about it, why not me? Because I understand the real costs of these products. And, you know, let’s use technology and try to connect the dots in a different way.
Kyle Wildnauer-Haigney:
Wow. So really, from your perspective, understanding that there is a, there’s a significant margin in the system from kind of non-value added services and you wanted to go in and really make it more affordable and accessible for all.
Satish Srinivasan:
You got it. Absolutely.
Kyle Wildnauer-Haigney:
And, and kind of what was the kind of driving force? How did you kind of start your career and really come into this position where you could glean this insight into the pharma value chain?
Satish Srinivasan:
Yeah, I, you know, I’m a pharmacist by educational qualification, I have both a bachelor’s and a master’s degree. And so I never got licensed to practice. But I’ve always been on the industry side of pharmaceuticals. And, you know, I mean, what you said is, is the real fact that the system adds more cost than the cost of the product itself. And so I said, you know, what can we do about it? And, you know, today with technology and everybody operating with smartphones and tablets, there is a way to gain access to that same consumer through technology, because a lot of the middlemen in the chain, they control access to the patient. So I said if we can gain that access through technology, that could perhaps change the game.
Kyle Wildnauer-Haigney:
It’s amazing. So tell me more about what DiRx is doing and how it’s different from other companies out there.
Satish Srinivasan:
Sure. So again, a little bit about what I’ve done for the last 25 years in the generic pharma industry, I’ve built at least two reasonable-sized multi $100 million dollar US generic businesses and I could have kept doing the same. Each of those companies, we grow to a certain stage and then there were M&A events and that’s when I moved on. I could have done I mean, I was getting job offers to be CEO of other generic companies, but I said the problem is the same, every quarter the generic companies are getting crushed by the drug wholesalers on, on pricing. And it’s always about how do you make the economics work? Why don’t I go to the other side and make an impact there where people have locked in a lot of value and they’re not letting it get through to people, so that’s how I got into this. So that was kind of the genesis of DiRx has been keeping up, keeing me up at night for the last, I would say three or four years, saying there’s got to be a better way, a better mousetrap. And so finally I quit my job in my third generic company and said, okay, you know, this is just same old, same old. I want to do something that really adds value. So this was right at the start of the pandemic, a big risk to take, but I started the company at, during the pandemic. I hired my leadership team during the pandemic, we raised funds during the pandemic. Many of us hadn’t even met in the same room for eight or nine months since we started working together. But we had already brought together a fantastic product. To your question, how are we different from others in this area? You know, 10, 15 years ago, generic companies used to sell to the big three wholesalers and then the smaller wholesalers and many retail chains. But all of that has transformed today, the big three wholesalers, they have created these large consortiums and so three consortiums control over 94% of all generic purchasing in the country. So imagine that you have a few hundred generic suppliers and only three …. So they kind of have a very strong handle on squeezing the cost low, but they turn around and they get paid based on reimbursement. So that’s where the disconnect between reimbursement rates and the real cost of the product, that’s a huge bridge to cross. And so most pharmacies today, I would say 95% of the pharmacies, whether they are the large chains or the small ones, they all purchase through the drug wholesalers. So they already get it at a certain markup price. So we were the first to say we’re going to go directly to the source, go to the manufacturer and realize that’s the industry I come from. So that’s my Rolodex, I have some very strong connections. And then when I explained to the companies that, hey, do you realize many more Americans could afford your products if they were not really supercharged through the system and we could get more consumption and better health outcomes for more Americans. And so we got immense support and we launched with 1000 of the most consumed generic SKUs in the country. And now we are growing every month. We are adding we are a little over 1400 SKUs and growing. So that’s a big difference, to answer your question, we directly buy from the source and we have one layer that processes and fulfills and ships it out to the consumers. We avoid the big three drug wholesalers, we avoid the PBMs who are administering all the insurance programs, because if many people I mean, over 41% of Americans are either uninsured or underinsured. So for them, insurance doesn’t work, wo why not give them a simple cash-based program? So that was kind of the genesis.
Kyle Wildnauer-Haigney:
And so any person can go online to DiRx.com and and purchase the medications, or do you need to qualify? Do you need special insurance?
Satish Srinivasan:
No, no insurance, we don’t accept insurance. It’s DiRxHealth.com, by the way. And anybody can go all prices for all the 1400 plus products out there transparently, you can decide 30 days, 90 days. We even have annual programs now. It’s called the annual savings plan. You can prepay a for a plan. You know, there’s a set of 500 products or a set of 1000 products. You prepay one price, unlimited prescriptions and refills. So that’s a new thing in the country, nobody has done that before. All of these you just prepay, every 90 days we ship to you. All we need, though, is is a legitimate prescription from your prescriber. As long as that’s there, we don’t need any insurance, no prior authorizations, nothing, keep it simple.
Kyle Wildnauer-Haigney:
Such, it’s such a cool business. I mean, any time you hear three consortiums control 94% of anything but of generics purchases, you know that there is some added costs in there and some monopolistic pricing tendencies that are happening in the system. And so hats off for identifying this and really kind of going after, it’s such a cool business. I’d like to hear maybe a little bit about the other patient impact, here at Outcomes Rocket, we really focus on how do we improve healthcare for the patients. Do you have any stories or kind of impact of how you’re improving the outcomes of individuals who are on the drugs?
Satish Srinivasan:
Well, yeah, we have several. I mean, we are a very young company. We’ve been live in the country just for about ten months, but we already have tens of thousands of people who have registered expressing interest in the model. And we’ve had, again, tens of thousands of prescriptions that we received and processed and shipped throughout the country. We are licensed in 49 states plus Washington, D.C. There’s only one state remaining, we expect to get that soon, the licensing. So we are nationally licensed many, many stories. So our lowest prices on our website start at $3 a month for some of the common generics, like for cholesterol and hypertension and things like that. That’s, of course, based on a 90 day shipment. So when I say $3 a month, it’s like $9 for a 90 day supply. We do not have any hidden fees, no pharmacy fees, no shipping fees like some of the other names you might hear out there. And what you see is what you pay and you get it all delivered at home, it’s premium packaging, premium digital experience, people are loving it. So first off, a higher level customer feedback we have, you know, TRUSTPILOT is the online rating system and we are already over 1000 reviews and we are at the highest bracket of excellent rating. We have a 4.7 out of 5 star rating, so that’s, I mean, broad customer feedback. The industry average for digital pharmacy is more around 3.5 to 3.6 stars, so we’re doing better. The second thing is, yes, we are, if you look at the individual comments and feedback we get on the site again, some of them are very gratifying. People have been scared of healthcare in this country, right? They are, first of all, they’re sick. They’re like, oh my god, what do I do? Second is a bigger fear than even whatever health problem they may have is, is this going to burn my pocket? This is going to be so expensive and bring it down. That’s a huge concern, it need not be the case. So we see a lot of comments on our rating sites and the feedback saying, wow, you guys not only made it very affordable, you made it such a smooth process and you’re helping me and my family save a lot of money. In many instances where people are comparing, I used to pay three times the amount at X, Y, Z pharmacy or whatever big PBM-based system. So we look at all of that. The other thing is, while our lowest prices started, you know, 3 to 5 dollars a month, we see that we are actually helping a lot of Americans save money even for more expensive generics. When you say generics, yeah, they’re cheaper than brands, but you have thousands of generics. So we do have, you know, 200, 400, and $800 dollar products, and we see orders coming in for those. And sometimes I wonder who would pay 800 bucks for one bottle of a 30 day supply of a generic product? And when we do the research, we find that for those uninsured patients, that product from any other source would have cost them over $1,000 dollars. So we’re still saving money for them at many, many pricing levels. We’re very happy with that.
Kyle Wildnauer-Haigney:
Wow.
Satish Srinivasan:
And yeah, we’ve also reached out to a few of the disease or therapy specific foundations. So we have publicly announced partnerships with the Hepatitis B Foundation and the DSC Alliance and all that. So these are rare diseases, but the, even the generic products there can be very expensive. And so there we, we give them specific affiliate codes that their members can use and save a lot of money.
Kyle Wildnauer-Haigney:
Very cool. So is that what is next for DiRx Health? Is it, I mean you guys are on this rocket ship, right? You started in the pandemic, three years ago, probably just met your leadership team within the last 6 to 9 months. Where do you guys go from here?
Satish Srinivasan:
Yeah, so we do want to have big size or outsized national impact, which is why we need the word to be spread. I mean, you know, there are many companies out there, even in the space started by billionaires. So when they tweet, the whole world listens. We don’t have that advantage, we have to spend our way. And digital marketing is extremely expensive and getting even more so, but the more decibel around you, you know, you’ve got to pay more to be heard. So for us, it’s through the media, the press, you know, podcasts like this where we’d like to spread the word. We want people to try. Once people try, they love us. So I can tell you another little fact, for the thousands of patients who have signed up and started using our service in the last ten months, 70% of them have signed up for the recurring program. There are the refills.
Kyle Wildnauer-Haigney:
Oh, wow. that’s great.
Satish Srinivasan:
So that’s a pretty significant retaining, retention of customers. And that’s good for us because that’s good assured future revenue.
Kyle Wildnauer-Haigney:
Fantastic. And so maybe, maybe we can scale out a little bit now, because I’d love your thoughts and your perspective on what we’re seeing in the industry right now. I mean, just, just generally, what are some of the key trends or themes that are playing out that you’re most interested in?
Satish Srinivasan:
Interesting question. So one, of course, is, you know, healthcare has always been this complex maze, there’s a lot of smoke and, smoke and mirrors games. So, you know, you’ve seen how the tech industry has been disrupted by many, many companies over the last couple of decades and so many other fields. But nobody really got into healthcare because they couldn’t understand it. It’s like, well, something costs something else, and, you know, just the whole reimbursement and everybody is lost. But I would say it’s the most recent 3 to 5 years that people have started stepping into healthcare and seeing how can we use technology to disrupt, eliminate, you know, the gaps between the end user and the care provider and so on, so I think that’s very exciting. I am a keen follower of everything in digital health. We, of course, address one aspect, which is the prescription medication access. But there’s so much of wonderful things going on, especially with telehealth and with COVID coming in, You know, that again gave it good growth, people were scared to step into a facility where other sick people might come, and then they realized that it saves money. I mean, it saves time, saves money, all of that. And now there are devices where a doctor is sitting at the other end of the screen can still feel your heartbeat and everything through little devices, a lot of remote monitoring coming in. So the technology aspect of it excites me. The other aspect that I keep a keen watch on is what’s, for example, in a new legislations, what’s kind of happening on the government side There, there, I still think there’s a long way to go. Nobody really understands the relationship between what the system is being charged and what the cost is, is complete separation of that. So they think they did a good job, I mean, even now, the recent bill that has been passed through both the houses ultimately ended up being a little bit of saving for Medicare. But the rest of the population has not been covered. I mean, you know, every side has their lobbyists, and finally, what comes out is different. Anyway, we welcome all steps to try to improve pricing access, affordability and transparency. But I think it has a long way to go because, even government I mean, I recall a couple of state government conversations, they are focused on what is a rebate they get out of everything.
Kyle Wildnauer-Haigney:
Right.
Satish Srinivasan:
But I say if someone’s going to charge you $500 dollars for a 100, a $100 dollar item and give you a $250 dollar rebate, you’re like, wow, I’m earning 250 dollar on every transaction, but you shouldn’t be paying the other 250 in the first place. I mean, you could have got it for 150 or 200.
Kyle Wildnauer-Haigney:
Yeah. Exactly.
Satish Srinivasan:
So people find that difficult to connect to. So that’s something that needs a lot of work. It has to be companies like these and various parts of healthcare that have to turn the focus to what’s the real cost of what we’re paying for, and does this make sense? I think it’s a slow evolution, I’m trying to do my bit towards that.
Kyle Wildnauer-Haigney:
And I love that. And similar to you, I’m optimistic in technology kind of flattening the value chain and really providing more transparency to the end user. You know, maybe before, second to last question, but we’d love to just hear about some of the biggest setbacks that you have experienced when starting this great company and what were some of those challenges and also key learnings associated with that.
Satish Srinivasan:
Sure. I mean, a lot of learning’s, right? When you start off as an entrepreneur and the strategy is in your mind, you know, it’s all in a blue sky thinking. But when you actually get around doing it, I mean, first off, how do you cut through the existing system? How do you educate people? And so definitely getting the word out has been something that’s very expensive. So that then ties into you need a lot of funding because to get the word out and get more people to try it, once they try it, we are very confident, they love it and they see the value. So I think that’s one area of challenge. So for me, as a CEO and a founder, constant fundraising is kind of become second nature now. And every day I’m in probably like eight meetings on business topics and then there’s like six meetings and meeting investors, whether there’s individuals or larger groups. And that’s, that’s always kind of a hope to cross because everybody wants you to show the proof of concept and achieve very, very large revenues very quickly, it takes time.
Kyle Wildnauer-Haigney:
Yeah, absolutely. Especially in healthcare, too.
Satish Srinivasan:
Yeah.
Kyle Wildnauer-Haigney:
And maybe before we conclude, if you could share one closing thought and where listeners can get in touch with you.
Satish Srinivasan:
Sure. I’m very active online. Best place I would say is LinkedIn. Numerous posts every day and I respond. People always know I’m very prompt and I work long hours, so all parts of the day and night, they get responses. So LinkedIn, Satish Srinivasan, and people can look me up. I do tweet, I am on Facebook, but I think LinkedIn is the best way. And at any point, you know, go to our website and DiRxHealth.com and all of us are first name, last name @DiRxHealthcom so I can be reached. I’m known for my promptness, no matter whether it’s a small inquiry or a large one. But you know, people will always hear back, I’m pretty hands on and I love to chat with people and see how we can keep making better decisions, better offerings and innovate.
Kyle Wildnauer-Haigney:
That’s awesome. Well, thank you so much for joining the show today. It was an absolute pleasure having you on and have a wonderful day.
Satish Srinivasan:
Thank you, Kyle. I enjoyed it as well. Thank you for taking the time to learn about me and how it got me into DiRx and what’s happening and where we’re going from here. And let’s stay in touch, I would love to speak every once in a while and see how things go.
Kyle Wildnauer-Haigney:
Definitely. Definitely. Thank you.
Satish Srinivasan:
Thank you. Bye bye.
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