Digital pharmacies looking to stand out in a crowded field are taking a page — and executives — from the biggest names in technology. Example: SoftBank-backed startup Alto Pharmacy, which just hired a top executive from Amazon as its new CEO.
Alicia Boler Davis will take over the reins of the company on September 1, just over two years after she joined Amazon as SVP of Global Fulfillment. At the time of her hiring, Boler Davis was the first black member of Jeff Bezos’ senior team.
altBased in San Francisco, it offers free prescription delivery in 13 markets, lets customers chat with pharmacists, and uses technology that searches for copay cards, coupons, and other options to find the most competitive prices. The company is part of a growing field of online pharmacies that saw fast growth– and increased investor interest – during the pandemic.
In addition to the 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 bought an independent pharmacy in San Francisco’s Mission District to understand the common pain points in the workflow and see the obstacles for doctors, pharmacists and patients.
“The main thing that struck us was the opportunity technology could provide to bridge the gap between all these different stakeholders, to help patients get more value and have better health outcomes,” says Karraker. “You have another person who chooses the product, the doctor; get the product, the patient; and pay for the product, the insurance – and someone has to coordinate between them.’
And while most digital pharmacies are only concerned with prescription execution and process delivery, Karraker says Alto has built a platform that actually starts where the prescription begins: with the doctor. One of the tools Alto provides to the tens of thousands of doctors it works with are automated processes that Karraker says can reduce the time the average doctor spends filling prescriptions.
This approach has enabled Alto to grow very quickly. “We have a new physician-driven growth channel,” Karraker says, noting that doctors actually “want their patients to use Alto and recommend us to their patients at the time of prescribing.”
While connecting the pharmacy to doctors, Alto’s platform also connects them to insurance companies, giving doctors transparency on whether a script has been filled in by allowing them to track its status.
That expansive view was a big 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 stakeholders.”
Alto’s approach was also attractive to investors. Since its inception, Alto has raised $550 million in seven financing rounds, the most recent of which closed in January with $200 million in new investment. led by SoftBank Vision Fund† Karraker says Alto generates about $1 billion in annual revenue, noting that the company makes money from every delivery.
“We’re just starting to unlock some of the potential of pharma to help the entire industry, and the problems we face are getting bigger and more complex as we get bigger,” he says. “That’s exactly why we’re bringing Alicia in; she has that experience and expertise to solve some of the world’s toughest, most complex operational problems.”
Ultimately, Boler Davis says, there’s something simple that motivates the company: “It shouldn’t be that hard to get prescriptions shipped. [to a pharmacy] and for patients to get them, and I’m glad Alto is attacking that.”