Unboxing PillPack — Competition Research {Million Dollar Idea Project}

As I’ve said many times before: competition is not just one dimension of business, competition is business. I’m keeping a close eye on my competition, secret-shopping, and learning everything I can.

PillPack is a serious player. They’ve raised over 117 million, have over 100 employees, and have been operating since 2013.

They’re going after a space fundamentally different than what we are — the prescription drug market. While they do offer over-the-counter medications and supplements, it’s clearly not the focus of their marketing.

That said, I think it would be hard to convince somebody currently using PillPack to start to get their supplements from us, even with all the machine learning that powers it, due to sheer convenience.

I take a few daily medications, one of which is prescription. My insurance company has been giving me trouble with the prescription. I figured I’d give them a shot.

The Ordering Process

So I went through the onboarding flow on their website, but was thrown off when I got to the insurance page.

This was asking for all kinds of details that aren’t on my insurance card, so I gave up and bounced. This is a component of their flow they could do a much better job at improving, as I’m sure they’re losing a LOT of customers here.

I then received several missed calls over the next few days. I do a lot of domain registration, so I get lots of unknown calls, but the same number kept trying once per day, so one night, I eventually picked up.

It felt like it must have been the associates first month. He wasn’t brand new, but certainly a little unconfident. It was clearly an onshore call, and he was friendly at least.

He took down the insurance info I had, and said he’d send it over to his “insurance team,” which says a bit about how they are structured, but I didn’t feel a substantial amount of confidence from this.

We went through my list of medications, when I should take them, what doses, etc. He pushed for specific details like the hour of day, which I don’t really have. I think of it more as “night” and “morning,” but I suppose the time could be more valuable for people with more specific needs. Still, might have been a better experience to avoid the questions, which he could have probably gleaned by the types of medications I had specified.

This was the clumsiest part, and could definitely be smoothed out. When we got to my prescription medication, the one I’ve been having trouble with, he asked for a phone number for my pharmacy. Despite the fact that I had informed him they never filled the prescription, he still felt confident his “prescription team” would be able to get it. He also took my doctor’s number.

Price, overall, was competitive with brick-and-mortar retail in separate bottles, while offering what seems like a far superior product.

Fast forward a little over a week, and I get an email that my PillPack is on its way. The problem: the prescription drug is marked as “paused,” with no explanation, no contact whatsoever. Quite a frustrating oversight! I’d be pretty pissed if this was a drug my life depended on!

The Packaging

From the outside, plain brown cardboard packaging, relatively non-descript.

Open it up, and we see that the inside of the box is lightly imprinted with the logo. Also, a hand-written note! That’s a nice touch!

Beneath that, there’s a very nicely printed manual, showing all sorts of details about how to use the PillPack, how their quality control works (they claim to store a photo of every single package that goes out), and at the end there’s a tearout sheet to give your doctor to call in prescriptions.

While the print quality on the manual is top-notch, there is also a set of papers about your medications, which is clearly just printed and stapled. This is the weakest component of the presentation. I find it hard to believe with all their printing resources, they can’t have this made on nice cardstock to improve the experience.

Now for the main attraction, the PillPack dispenser. The website seemed to indicate it was going to be a nice big plastic thing, but as should be expected, it’s just light cardboard.

It’s full of barcodes, which hopefully only contain serial numbers, and not all my personal information… The packs themselves are made of a slightly stiff package, and perforated between each. The entire side is serrated so you can tear anywhere. The back of the packaging is clear, while the front is custom printed in black on matte white.

Inside the box, the packs are rolled up, as I had expected.

So What Have We Learned?

It’s interesting that despite raising so much money, they haven’t completely buttoned up their process and experience. It’s clear they’ve made some real investments to the presentation and experience, but there are still surprising gaps, between the online onboarding experience and the packaging.

I expect most of the investment has gone to the following areas:

• Equipment for doing the packaging and labeling, likely all custom
• Equipment and procedures for quality control
• Legal compliance
• Marketing

Trying to compete in a well-regulated space like prescription medication is really expensive, so it makes sense that the lion’s share of investment would go to places most other startups might not focus on.

Their QC procedure of photographing each package is a great tool. I had opaque sachets printed, but we can still use video of the packaging procedure and photographs of staged pills to get close, and on a future run, we can use clear-backed packaging.

The packaging is cheaper-looking than I had expected, but it is custom print, which is operationally difficult. It is certainly possible to accomplish with investment, but it’s a little out of our reach for now.

As far as labelling goes, the individual packets list their contents, along with a time and date. It’s worth noting that they start with morning, which feels slightly off to me, since you are likely to receive it during the day. The packets also have specific dates, which reasonably, they begin next week to be safe.

That’s a slightly awkward experience, since it cools the excitement of trying something new (even if that thing is just boring old medication). I will be starting my packs on the night schedule, and they will be undated to avoid these problems.

It’s worth pointing out: I don’t see any “Supplement Facts” tables anywhere, which I had believed to be required as a packager under the CGMP rule from the FDA. It’s possible they don’t qualify as such, being a pharmacy, but they certainly are serving a hybrid role. I assume they’ve done their homework, but I’ll be interested to see if the other players do the same.

As far as overall labelling goes, on the main box, in a poorly-stuck-on, but well-printed label, it indicates the contents and total quantities, along with an image of what the pill should look like. It also includes my address, their address, and a disclosure about the professional in charge of distribution, presumably the person serving the role of pharmacist.

It might be me too narrowly defining my competitive set, but I don’t really consider PillPack as a real competitor to what I am trying to accomplish, since their goals are so much broader, and their positioning is so different.

Like I said above though, it seems unlikely somebody would use both, and they offer something we can’t, so we will likely be targeting people who are not using PillPack.

The handwritten note and the top-quality manual are also nice touches, which might be worth copying.