Mountain View, California-based NowRx, an app-based pharmacy delivery company, has raised $2 million in seed funding.  The startup, which has been in operation a little over a year, plans to use the capital to expand their customer base.

NowRx’s app, which works with all major insurance plans, basically functions as on-demand drug delivery service. The app allows people to upload a photo of their paper prescription, pay their co-pay, have a video visit with a pharmacist, and schedule delivery to any location of their choosing. If people prefer not to use the app, NowRx also offers the option to do the entire process over the phone. On the physician’s end, they have access to an analytics platform where they can track prescription status, insurance approvals and delivery confirmation.

"Free same-day delivery provides a dramatically better customer experience, and is uniquely available from an on-demand pharmacy. The large chain pharmacies are reluctant to offer free delivery because of the essential incentive to attract customers into their brick and mortar locations so they can upsell them on all of the other products in the store," NowRx CEO Cary Breese said in a statement. "By operating inside highly automated, low-overhead warehouse locations, NowRx will be able to achieve the same or better operating margins as the largest players in the industry and, in fact, we are projecting profitability later this year.”

The pharmacy app field is getting a little crowded these days (and well-funded), but nearly all companies offering a digital version of prescription ordering, refilling and delivery service do things a bit differently. In NowRx’s case, that means very low operating costs and, for now at least, serving a relatively small market. Currently, the company only delivers to customers on the San Francisco peninsula, but they report over 3,000 people using the app with 10 percent growth month over month.  

“Our very low fixed overhead costs and small infrastructure footprint allow NowRx to create an innovative blend of “offline” and “online” capabilities, in other words a combination of small storefront and mobile app, that is optimal for this industry and a model that is highly scalable,” Breese stated.

The reason pharmacy apps are catching on with physicians, payers and investors is due to their potential to mitigate the exorbitantly high costs associated with medication non-adherence. Not only do millions of people lapse in taking all of their medication, many do not even pick them up. NowRx cited a figure of over 100 million prescriptions going unfilled every year for a number of reasons, including the basic inconvenience of having to physically go to the pharmacy and pick them up.

“Medication noncompliance is a major concern in the medical profession, and it’s not unusual for me to see about one-third of patients not taking their prescriptions,” Dr. Moshe Mendelson, who works at Silicon Valley Eye Physicians, said in a statement provided by NowRx. “With its reminders and direct delivery to patients aids compliance and, as a result, promotes better health outcomes. I feel the app is a wonderful development because it adds a layer of adherence for the patients, especially those with chronic conditions. It’s also extremely convenient. Today when I give my patients the option to send prescriptions electronically to their local pharmacy or to NowRx, an overwhelming 80 percent choose NowRx because of convenience.”

The company current operates from one warehouse in Mountain View and is planning on opening two more to expand their coverage across the San Francisco Bay Area. Additionally, NowRx is working to leverage their analytics platform to understand drug utilization patterns to identify opportunities for pharmacist and physician intervention and subsequent collaboration to off to offset the hundreds of billions of dollars in healthcare costs associated with medication noncompliance.