By Jay Greene | Crain's Detroit Business
OptimizeRx Corp., a Rochester Hlls-based company that offers electronic discounts to patients for prescription drugs from pharmaceutical companies, has a new minority owner: WPP, a London-based global advertising and marketing firm.
WPP, a media conglomerate involved in the automotive, health care, retail and pharmaceutical industries, and its New York-based operating subsidiary, Grey Healthcare Group, have invested $4.7 million in OptimizeRx to become a 20 percent minority owner, said David Harrell, OptimizeRx's chairman and president.
Since 2010, OptimizeRx (OTCQB: OPRX) has offered custom software that is integrated into physician electronic health record systems. The software helps doctors search for prescription drug discounts and electronically sends the coupons and orders to pharmacies.
The automated system is intended to replace free drug samples at physician offices, Harrell said.
"As we started to integrate with their pharmaceutical clients, (WPP) became interested in us," he said. "They realized traditional marketing and advertising (of pharmaceuticals) are being minimized by traditional channels of sales reps, product information and patient support."
Harrell said the investment by WPP represented two years of talks with the company.
"This shift to electronic workflow provides an opportunity for new on-demand tools to help physicians better serve their patients and meet the challenges of practicing medicine today," said Lynn O'Connor Vos, CEO of Grey Healthcare, in a statement.
OptimizeRx's relationship with WPP and Grey will not only give the company more capital to expand, Harrell said Grey will help market OptimizeRx to patients and doctors.
"We want to help consumers find the most cost-effective places to reduce prescription costs and show the cheapest place where they can buy with the coupons," Harrell said.
During the past nine years, more than 2 million people have used OptimizeRx to obtain co-pay coupons for drug samples ordered by their doctors or nurse practitioners, Harrell said. More than 300,000 health care providers use OptimizeRx through their electronic medical record systems, he said.
OptimizeRx's 16-member workforce is expected to double during the next year, Harrell said.
"We don't need to be a large company," he said. "We are looking at account management support for (electronic health records) and working with Oakland University for interns," Harrell said.
During the first nine months of this year, OptimizeRx lost $181,000 on operations on revenue of $5.2 million. Revenue increased 38 percent to $6.5 million in 2014 from $4.7 million in 2013, but operating losses totaled $1 million and $267,000, respectively.
Harrell said the company earns about $4 for every discount coupon it distributes.
Over the past decade, drug companies have been reducing their once-legendary workforces of drug representatives who provided education and free drug samples to doctors, said Harrell, who was a pharmaceutical representative for 10 years at then-SmithKline Beecham before founding the OptimizeRx in 2006.
Surveys have shown the number of physicians who see pharmaceutical representatives has dropped to 40 percent from 80 percent.
"Doctors are being bought up by hospitals and told to use their electronic medical record," Harrell said. "Hospitals don't want to let drug reps and samples in. This is an integrated way for doctors to add a free sample voucher sent to a pharmacy."
Customers of OptimizeRx are primarily 25 drug companies, including Pfizer, Novartis, Merck & Co., GlaxoSmithKline, Sanofi and AstraZeneca, Harrell said. Suppliers to OptimizeRx are at least 350 EHR systems that have programs integrated into their systems, including Allscripts Healthcare, Quest, Practice Fusion and DrFirst.
Daniel Pucci, Allscripts vice president of life sciences in Austin, Texas, said Allscripts has embedded OptimizeRx software in its electronic medical record system for providers since 2010.
"Our primary client is the providers. They are constantly looking to understand what the best medication is for their patients," Pucci said. "Often the best med is a branded medication that is more expensive than generic."
Doctors want the drug financial assistance programs in Allscripts EMR, Pucci said. "They feel more confident the therapy they are recommending isn't too expensive," he said.
Harrell said the average patient stays on chronic disease drugs for only about four or five months.
"The biggest reason they tail off is out-of-pocket costs. By offering $15 co-pay coupons, it helps them stay on therapy longer," said Harrell.