Monday, June 10, 2013
How RxVantage's IT Software Aims To Automate A $20B Market
Story by Benjamin F. Kuo
Pharmaceutical companies spent $20 billion a year marketing their products to medical offices. However, the whole business of those companies working with medical offices is one sorely in need of technology. RxVantage (www.rxvantage.com), based in Los Angeles, is looking to tackle that huge market with its medical scheduling software for pharmaceutical and medical sales reps and medical offices, and is venture backed by Slater Technology Fund and Javelin Venture Partners. We spoke with Dan Gilman, President and co-founder of the company, to learn more about the company, it's market, and why healthcare information technology is such an interesting area for investors.
What is RxVantage?
Dan Gilman: We provide a cloud-based platform for medical practices to more efficiently coordinate and communicate with representatives, from pharmaceutical and other medical companies who are calling on their practice. Those representatives help educate providers on products, and deliver value to those offices. One of the challenges with current industry practice, is even though those visits provide lots of value, the offices are always squeezed for time. What happens, is they end out cutting out the time with those representatives. The problem with the current system, is there is no real system. Those offices are using paper calendars, there's often no-shows, and there's lot of inefficiency. We provide RxVantage to practices, so they can get value from those pharmaceutical and medical representatives, without having to spend lots of time on logistics and coordination, or the frustration that goes along with that.
How did you start the company?
Dan Gilman: I was in pharmaceuticals, and was a representative for four years in the field. I saw what was going out there, and the crazy task at hand. Pharmaceutical companies spend something like 20 billion dollars a year on in-office promotion, out of something like a total of 60 billion on marketing spend. But, there are time when I wouldn't be able to get an appointment unless it was twelve months out. And, even if you did get an appointment, sometimes things would change at the last second, you might have changed your territory, or you might not even be at the company any more. The company was born out of the inefficiency in the system. That was back in 2007, when we started. We came out in 2008, and raised a convertible round from Slater, and did a Series A round from Javelin Ventures at the end of 2011.
What was appealing about what you were doing for your investors?
Dan Gilman: I think part of it, was delivering efficiency into pharmaceuticals, given the size of the market. There are blockbuster brands in pharmaceutical, who are bigger than most of the companies in other markets. With 60 billion to spend, that's a bigger budget than the music industry. The size of the market and the spending there was appealing, and also the fact that we already had customers. You can talk to lots of our clients, and the feedback is that it's really changed their lives. When we show the product to offices, a high percentage of them find it really compelling.
What's in this for the offices and talking with reps?
Dan Gilman: The value we add for them, is talking with representatives is education for them. Pharmaceutical companies deliver a lot of programs, including free medicine for people who qualify, and education for providers and their staff, plus patient education. We have a deal with those offices, where we give the system to them for free, and automates all handling the scheduling of visits by representatives. It allows the offices to use custom rules--when can people come in, who can visit them, and has the representative handle all of the logistics online, rather than standing there at the patient window, trying to find the next available appointment. It saves those offices 18 hours a month. That's literally time they do not need to be spending doing this, and automates it all for free.
Where are you now, in terms of stage and deployment?
Dan Gilman: We're nationwide, with offices in every state, though we might not have Alaska. The system is pretty mature, and provides lots of functionality, from the scheduling piece to actually looking up patient assistance programs for their patients, and handling coupons, vouchers, copay cards, and provides discounted medication searches. We have tens of thousands of offices now, and are pretty widespread in the wild.
Medical offices aren't known for their quick adoption of technology. Has that been an issue for you?
Dan Gilman: We find that when we get an office to see a quick, live demo, 90 percent of them sign up. The 10 percent who don't sign up are still using paper and don't use computer technology. We've designed RxVantage so that it's simple to use, and because it's in the cloud they don' t have to install anything. Anyone in the office can pick it up. In the past five years, things have changed dramatically. Back in 2008, not everyone had broadband, the offices didn't always have always-on Internet. However, they've really caught up, and they're now facing an influx of technology, and they're ready to go. We're now able to show a demo for five or ten minutes, and have it installed in 15 to 20 minutes. One of the challenges is these offices don't believe it can be that easy, because they're used to those old electronic medical records systems, where it was months and months of pain to install. That's one of our advantages. The offices are pretty adept at the software game at this point.
Finally, what's the next thing you are working on?
Dan Gilman: We're releasing a mobile app, which will be coming out soon. And, it's all about getting the word out about our software to offices, since once they do, 90 perecnt sign up. We're also continuing to scale out the business, scale out sales and marketing, and get the word out to more people.