GoodRx Claims It’s 100% Free—How Does the Company Make Its Profits?
GoodRx Holdings (GDRX) allows customers them to purchase prescriptions at the lowest cost. How does GoodRx make money?
Nov. 2 2021, Published 6:59 a.m. ET
GoodRx Holdings (GDRX) is designed to help consumers compare prices for prescription medication, allowing them to purchase it at the lowest cost. The company also offers coupons that can be downloaded from its website or app. How does GoodRx make its money, and is the company public?
While GoodRx does offer subscription-based plans, it also gives consumers access to prices and coupons with no financial commitment or the need to create an account. In its 2020 annual report, GoodRx revealed it made $550,700 in revenue that year.
The golden question: How does GoodRx make its money?
GoodRx earns its profits through advertisements, member sign-ups, and referral fees. Although the company offers its services for free, you can also sign up for a GoodRx Gold monthly membership program at $5.99 per month for one person or $9.99 for up to five family members.
GoodRx estimates that you’ll save up to $240 per month or $2,875 per year on prescriptions with an individual membership and $277 per month or $3,323 per year with a family plan. Anyone can access GoodRx’s coupons risk-free, and the memberships offer “dramatic discounts.”
A look at GoodRx’s profits over the last three years
In its 2020 annual report, GoodRx disclosed that, in the year ended Dec. 2018, it earned $249,522 in revenue. In 2019, that increased to $388,224, and in 2020, to $550,700.
As of Sept. 24, 2021, GoodRx had more than 1 million subscribers in its membership program.
How did GoodRx start?
In 2011, GoodRx began its journey to build a “consumer-focused, digital healthcare platform in the U.S.” Doug Hirsch, co-founder and co-CEO of GoodRx, developed the idea for the company after receiving a costly prescription he needed to fill. As Hirsch shopped around for the cheapest prescription, he realized there was a void that needed filling.
GoodRx was then born and has since helped consumers “with or without insurance save $20 billion on their prescriptions.” The company later expanded to let consumers see a licensed healthcare provider from the comfort of their homes.
Prescription prices today are at an all-time high. AARP reports “retail prices for some of the most widely used brand name prescription drugs continue to increase twice as much as inflation, making these life-sustaining medicines potentially unaffordable to many older Americans.”
Even those with health insurance are sometimes able to find cheaper prescriptions than if they were to fill them through their insurance carrier.
Is GoodRx a publicly traded company?
On Sept. 23, 2020, GoodRx became a publicly traded company on the Nasdaq. As of Nov. 1, GoodRx was trading at $43.91, a little below what it was trading at in Sept. 2020.