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Is PillPack the pharmacy of the future?

Pharmacy technician Andrea Tibbetts counts out pills to fill an order for generic medications at PorPharmacy technician Andrea Tibbetts counts out pills to fill an order for generic medications at Por
More insurers want to tie drug payments to health outcomes.Photograph by John Ewing — Portland Press Herald/Getty Images

Online prescription drug company PillPack is using robotics, machine learning, and more to help you avoid waiting in line at the drug store. And Silicon Valley investors are pouring $50 million into the Massachusetts-based online pharmacy. The financing round was led by Charles River Ventures with participation from Accel Partners, Atlas Venture, Menlo Ventures, and Sherpa Ventures.

Launched in 2014, PillPack is an online pharmacy that will ship personalized rolls of pre-sorted prescriptions, vitamins, and over-the-counter drugs to consumers. The startup is using robots to sort pills into personalized packets, saving money on human labor.

PillPack will also manage refills for customers by proactively coordinating with physicians and insurance providers. To date, PillPack, which is taking on incumbents in the pharmacy world, such as CVS and Walgreens, has shipped more than 1 million dose packs since the company’s launch in February 2014.

According to the IMS Institute for Healthcare Informatics, a record 4.3 billion prescriptions were filled in 2014, with spending rising 13% to a total of $374 billion.

“The market is huge,” says Charles River Capital investor George Zachary, who is joining PillPack’s board. Zachary adds that he was particularly impressed by PillPack’s growth as a business despite only launching last year.

This growth in prescription drug purchases is coinciding with an uptick in people buying health and beauty products online. A recent Business Insider report estimates that 36 million U.S. consumers shopped online for health and beauty products in the spring of 2014, up from 20 million consumers in spring 2010.

PillPack’s sweet spot focuses on providing prescriptions for consumers who take the same medicines regularly. Instead of sorting multiple types of pills into physical pill boxes, PillPack does the work for you. Each packet of pills is labeled with the type of pills you are taking in a given day. The company’s technology will also evaluate and inform users on the potential risks of combining certain medications and dosages.

The company says it accepts most prescription drug insurance plans, including a majority of Medicare Part D plans.

Founder and CEO TJ Parker is a pharmacist by training. His family owned a traditional mom and pop pharmacy in New Hampshire, and he started working as an assistant throughout his youth. He saw the frustrations customers had first hand. “We want to reimagine what end-to-end pharmacy experience is for customers,” said Parker. Part of that plan is to actually build physical retail stores that would specialize in addressing emergency, shorter term prescriptions such as antibiotics for a cold.

The capital will be used to grow the team and build retail pharmacies in U.S. markets.

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