Digital pharmacy insights: Q&A with Phlo digital pharmacy startup

In this article, we relay our interview with Nadeem Sarwar, the founder of Phlo Digital Pharmacy. We speak about business models, COVID’s impact on digital health and the role of telecoms operators.

Insights into a digital pharmacy startup

As countries around the world begin to ease COVID restrictions, STL Partners has been reflecting on the digital health use cases which have surged in growth over the last year. We recently wrote an article on 15 digital health companies to watch in 2021 and now want to deep dive on one in particular: Phlo Digital Pharmacy.

In this article, we relay our interview with the founder, Nadeem Sarwar. As an application provider, Nadeem provides an interesting perspective on business models and new growth areas in digital health. His insights and opinions will be useful to those operating in digital health, as well as to telecoms operations looking for partners in this vertical.

Interview with Phlo Digital Pharmacy

What is Phlo’s business model?

Phlo is a digital pharmacy that allows consumers to order prescriptions online, track the order in real-time and have it delivered within hours on the same day. Phlo originally worked with prescribers and doctor services within the NHS, building custom cloud-based technology that allowed patients to order and manage prescriptions. In this B2C model, Phlo controls the customer relationship end-to-end: the patient orders on the Phlo app and the order is fulfilled by Phlo’s delivery services.

Having built out its business (technology stack, physical pharmacy, and delivery services), Phlo identified value in providing a B2B2C service and now also partners with other digital health players. Telemedicine providers, for instance, are leveraging Phlo’s capabilities to improve their virtual care offering.

Babylon is an interesting example. It provides virtual consultations to its patients and, through integrating with Phlo, is also able to digitally cater to prescription orders. Patients therefore have a seamless experience, receiving their care and ordering prescriptions from within one app.

How does Phlo differ from other digital pharmacies?

Phlo differs from other digital pharmacies with respect to delivery.

Digital pharmacies traditionally use mail order to send prescriptions to patients. While this method of delivery is largely reliable, Phlo believes that it carries an unavoidable risk: as soon as you post an order, you are no longer in control of the end-to-end process. This uncertainty of order delivery, however small it might be, is a deterrent to using e-pharmacy solutions.

This is because prescriptions, unlike the vast majority of other e-commerce items, are time-sensitive: delayed or non-delivered orders can have serious implications on heath.

Phlo addresses the uncertainties of mail order through its on-demand delivery model: patients receive their prescription on the same day and are able to track the order in real-time as it comes from the fulfilment centre to their home (think Uber or Deliveroo). By putting patients at ease and providing them with a certainty of delivery comparable with going to pharmacies themselves, Phlo is knocking down barriers to e-pharmacy adoption.

How has the COVID pandemic impacted Phlo?

The COVID pandemic has impacted Phlo in two main ways: growth and customer base.

To start with growth, there has been a significant increase in the adoption of Phlo’s e-pharmacy solution. This is unsurprising amidst lockdown and social distancing measures: Phlo provided patients with a way to receive their prescriptions safely and securely, without the need to physically go to pharmacies.

The pandemic also impacted the composition of Phlo’s core customer base. Previously, younger consumers – and those typically more tech-enabled – were the main users of Phlo’s services. These consumers are familiar with digital services and are accustomed to procuring products online. The pandemic, however, has widened the age group of Phlo’s users and demonstrated that older consumers – and those typically less tech-enabled – are ready and able to procure digital services.

The pandemic gave this bracket of consumers the push they needed to try online.

Even as the UK comes out of lockdown and in-person services recommence, Phlo thinks that consumer behaviour will not return to pre-pandemic norms: the use of digital services has been normalised and accelerated. For this reason, Phlo expects to retain new users of its services – both old and young.

What do you think about the role telecoms operators can play in digital health?

Telecoms operators could be key partners for application providers.

Phlo’s business model enables it to build trusted relationships with customers: it has a direct path of communication and delivers prescriptions to patients’ homes. This relationship is particularly nurtured with customers who order repeat prescriptions. The question for Phlo is how to provide additional services to its established customer base. Phlo already delivers prescriptions to the patient house, so the natural next step is to provide healthcare within the house. Remote patient monitoring (see our article on a player in this space here) is therefore an attractive venture, although Phlo acknowledges that diversification of services would be achieved through acquisition.

In this new digital health service, Phlo envisages that telecoms operators could be the broker of data in-between patients and itself. Remote patient monitoring relies on numerous devices which record data in different ways (e.g. blood pressure monitor, glucose monitor, heartrate monitor). Telecoms operators would therefore structure this data and make it comprehensible, so that Phlo could then draw actionable insight.

Another role telecoms operators could play in Phlo’s digital pharmacy model is to enable improved real-time tracking of drivers through 5G.

Do you have any closing comments on the digital health space?

Digital health is a huge space and comparable to an ecosystem: it comprises numerous players who fulfil different niches and often work together (think Babylon and Phlo). For this reason, you can’t be all things to all people. Digital health players need to be selective in the area they operate, and strategic with their chosen partners.

What does this mean for telecoms operators?

There is a vibrant ecosystem of application providers who are aware of the need to partner to succeed in digital health. Telecoms operators are strong candidates for partners and can fulfil numerous roles: from connectivity to data brokerage and application enablement to end-to-end solutions.

Entering the digital health space is an exciting opportunity, but one which requires a clear strategy. If telecoms operators are able to select the right partners and target the right niche, there is much to be gained. We have created a tool which maps companies across five digital health application areas. This is a good place to start for telecoms operators thinking about the digital health opportunity

Digital health insights pack

This 24-page document will provide you with a summary of insights from our healthcare research and consulting work:

  • Key trends in the healthcare industry
  • The role for telecoms: applications and business models
  • Strategies for success: where to start
  • How STL Partners can support you

Request the free digital health insights pack by clicking on button below:

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