Digital pharmacies looking to set themselves apart in a crowded field are taking a page—and executives—from the biggest names in tech. Case in point: SoftBank-backed startup Alto Pharmacy, which just landed a top Amazon exec as its next CEO.
Alicia Boler Davis will take the reins of the company on September 1, a little more than two years after she joined Amazon as SVP of global fulfillment. At the time she was appointed, Boler Davis was the first Black member of Jeff Bezos’s senior team.
Alto, based in San Francisco, offers free prescription delivery in 13 markets, lets customers chat with pharmacists, and uses tech that searches for copay cards, coupons, and other options to find the most competitive pricing. The company is part of a growing field of online pharmacies that saw rapid growth—and increased interest from investors—during the pandemic.
In addition to New York City-based Capsule, which raised $300 million last year, Amazon launched a pharmacy offering in late 2020, following its $1 billion acquisition of digital pharmacy PillPack in 2018.
Jamie Karraker and Mattieu Gamache-Asselin started Alto in 2015 after leaving their software engineering jobs at Facebook with the goal of using their experience and skills to help improve people’s lives. They saw pharmacy as a natural fit but lacked experience in the field. The two purchased an independent pharmacy in San Francisco’s Mission District in order to understand overall workflow pain points, as well as what obstacles exist for doctors, pharmacists, and patients.
“The biggest thing that stood out to us was the opportunity that technology could play in helping to bridge the gap between all of these different stakeholders, to help patients get more value and have better health outcomes,” Karraker says. “You have a different person choosing the product, the doctor; getting the product, the patient; and paying for the product, the insurance—and someone has to coordinate between all of those.”
And while most digital pharmacies deal only with the prescription fulfillment and delivery aspect of the process, Karraker says Alto has built a platform that actually starts where the prescription does—with the doctor. Among the tools Alto offers the tens of thousands of doctors it works with are automated processes that Karraker says can reduce the time the average physician spends dealing with prescriptions.
This approach has helped Alto grow very quickly. “We have a novel, doctor-driven growth channel,” Karraker says, noting that physicians actually “want their patients to be using Alto and recommend us to their patients at the point of prescription.”
While connecting the pharmacy with doctors, Alto’s platform also connects them with insurance providers, giving doctors transparency into whether a script is filled by allowing them to track its status.
That expansive view was a major draw for Boler Davis. “This is more than fulfillment and delivery,” she says. “Alto is much more than that. It’s about looking at [the pharmacy experience] end to end, bringing care back, and adding value for all the stakeholders.”
Alto’s approach has also been attractive to investors. Since its founding, Alto has raised $550 million in seven funding rounds, the most recent of which closed in January with $200 million in new investments led by SoftBank Vision Fund. Karraker says Alto does about $1 billion in revenue annually, and notes that the company makes money on each delivery.
“We’re just starting to unlock some of the potential in the position of pharmacy to help the whole industry, and the problems that we’re starting to run up against are getting bigger and more complex as we scale,” he says. “That’s exactly why we are bringing Alicia on; she has that experience and expertise solving some of the world’s most difficult, complex operational problems.”
Ultimately, Boler Davis says, there’s a simple thing motivating the company: “It shouldn’t be this hard to get prescriptions sent [to a pharmacy] and for patients to get them, and I’m happy Alto is attacking that.”