Startup Spotlight #89: PatchRx

PatchRx improves patient health through smart technology.

Feb 22, 2021

Latest F2F Case Study - Case Study: This Founder Doesn't Believe In Product-Market Fit. Yet His Startup Is Growing Rapidly.

I got the chance to speak with Gavin Buchanan and Andrew Aertker, co-founders of PatchRx, about what they are working on at their startup, and any advice they have for emerging entrepreneurs.

Gavin’s close family member passed away in 2017 as a result of nonadherence and when Gavin and Andrew met in their first year at university during the biggest spike in the opioid epidemic, they realized that there was a big issue at hand with just taking prescription medication. After they began to work on a solution to prevent overdoses, Andrew was diagnosed with Stage 2 Cancer in 2018. He began to see first hand in healthcare how problematic just taking prescription medication was. They realized that while billions of dollars of research go into accurately designing a medication, there have been no significant adjustments with pill bottles to meaningfully assist patients in taking their medication or providing real-time interventions from the prescribers. The two cofounders decided to change that with PatchRx.

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Startup Spotlight: PatchRx

PatchRx cofounders Gavin Buchanan (left) and Andrew Aertker (right).

Problem: Medication non-adherence results in over 125,000 deaths annually and over $500B in costs to the healthcare industry. But in healthcare, the two primary metrics to calculate adherence, MPR and PDC, don’t capture any data between the first fill and the next refill – our service provides the transparency needed to make meaningful health interventions to keep patients healthy.

Market: There are currently 90,000 pharmacies in the US that do about 6B scripts per year. We estimate a TAM of about $19B for just direct to pharmacy sales, with a SOM of $288M with just certain Texas pharmacies on select medications. This is just our direct-to-pharmacy market and doesn’t include the lucrative offers of streamlining our data back to pharmaceutical companies and health plans.

Solution: We’ve built a smart pill bottle device that attaches to any size pill bottle cap, tracks when users take medication, and streamline the data back to care providers in the healthcare industry. We simultaneously boost engagement and adherence and collect granular data on how and when patients take their medications in real-time, relaying this information back to clinicians and physicians through our web app or integrated APIs.

Team: Our founding team is built of engineers and computer scientists with personal connections and attachments to healthcare. Today, our team has expanded with developers and engineers with ex-Instagram, Facebook, IBM, and NASA backgrounds, and our board has over 180 years of healthcare experience.

Recent Success:

Buchanan and Aertker: Our team has been very successful at learning about a relatively opaque market. We've been able to get keen insights partially due to our tenacity in customer discovery, a step that's often overlooked. When we began researching our product to find the right market fit, we spoke with over 100 firms in the pharmaceutical and patient data space as well as over 200 pharmacists to understand acutely what their problems were and understand the rough value of what we were building. Partially why we're succeeding where other firms have failed is that we've found unique insights that are not intuitive about the market and likely would not come up in a dozen random conversations with professionals in the industry.

Recent Struggle:

Buchanan and Aertker: Healthcare moves slowly and sales cycles with health plans and pharmaceutical companies just take time. At a few points in our service offering cycle, we’ve run up against the chicken-and-egg dilemma in terms of what we can offer and when. Finding the first right partner who will look at an MVP with leniency, collaboration, and a forward-thinking attitude takes time and shouldn't be rushed. Early on we just wanted anyone to say yes and give us a chance when we should have been looking for the best initial pilot user.

Founder Advice:

Buchanan: If you’re building something you’re passionate about, show it. Entrepreneurship and business often teach founders to adopt a personality that is ultimately concise and cool. It’s alright to be eager and excited about sharing your mission in a way that’s kind and compassionate.

Aertker: Always keep your eyes and ears open for new information. Just listening to what others have to say allows you to expand your focus and iterate on your product in ways you might never have thought of.

Three Cool Founders You Should Know About:

Buchanan and Aertker: Here are three founders you should check out next!

Jacob Hurrell-Zitelman, Founder of Quick Sip Coffee: Quick Sip Coffee is the only bottled high-quality, specialty, and single-origin cold brew coffee company in San Antonio.
Roman Sandoval, Founder of Allosense: Allosense is building a fleet of industrial-IoT devices and a satellite-based infrastructure to support them.
Andrew Antos, Founder of Klarity: Klarity is a pioneer in document processing artificial intelligence.

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