Q&A   /   December 23, 2020

Ro chief growth officer Rob Schutz: ‘Amazon entering the space is great for digital pharmacy’

Telehealth experienced a boom in 2020, as the pandemic forced people to replace in-person services with online alternatives.

Startups in the space were able to ride that wave. Ro, for example, projects that it will end the year with $230 million in gross revenue, up 55% from the year prior. When Ro launched in 2017, its initial purpose was to connecting male patients with doctors to discuss medical conditions like erectile dysfunction and hair loss. Ro has since grown to encompass a number sub-brands and services, including Rory for women, Zero for nonsmokers and Plenity, which is focused on weight loss.

In March, Ro announced it was piloting a new digital pharmacy service, through which patients can order a variety of generic prescriptions for $5 per medication per month, without going through insurance. And, earlier this month, Ro announced that it was acquiring software startup Workpath, for an undisclosed amount. Workpath assists in dispatching nurses and other health professionals making home calls.

During its three-plus years in business, however, the role Ro plays in the health care space has changed. In order to launch its digital pharmacy service, for example, Ro has opened six of its own pharmacies and hired its own pharmacy technicians. Ro currently has job openings for nurse practitioners to conduct phone and video consultations with patients. And in building out its new Plenity brand, Ro partnered with biotech company Gelesis to launch a new weight management aid that received FDA approval. 

In an interview with Modern Retail, Ro cofounder and chief growth officer Rob Schutz spoke about how the company is focusing more on direct care. “Some things are great for telehealth, but you inevitably need someone to say, [administer] a vaccine,” he said. 

The way Schutz described it, Ro wants to build a vertically-integrated, primary care platform that serves as a “patient’s first call” when searching for medical guidance. And that entails building out infrastructure to support telehealth services, prescription delivery and at-home care visits. 

Schutz discussed the other areas of health care Ro is looking to get into — and how 2020 has changed the trajectory of telehealth in the U.S.

This interview has been edited for clarity and length.

How do you feel like people’s attitudes toward telehealth changed this year?
The way that we look at is: Covid has pulled the future forward, a lot more quickly than I think anyone anticipated. Telehealth has been around for a long time, but this kind of turned it into a forced experiment, where people couldn’t go to the doctor (at least early on).

People understand that telehealth is going to be part of the future — it’s not going to be the end all be all for everything, nor should it be, but it has a really important role to play in someone’s overall health. And some things can be done really well by….connecting with a doctor or chatting with them on video chat or phone. Some things, you will still need to meet someone in person.

We’re not just a telehealth company. And, again, telehealth is an important component; pharmacy is an important component; at-home and in-person is an important component. The pandemic has reinforced a lot of these things where people do understand and appreciate telehealth as a legitimate, reputable way to get access to a doctor.

So what role do you see Ro playing going forward in facilitating the health care services that still need to be done in-person? Do you foresee opening your own clinic, for example?
I mean nothing is off the table, and I think one of the reasons why we’ve been able to scale so quickly and be so nimble is not having a tremendous amount of overhead. It could be that Ro decides to [address] a series of conditions that require blood testing, require nurses at home, etc.

We look at Workpath as a way to get [the] best of both worlds. One of the reasons we are excited about Workpath is we want to leave them alone, they are a completely independent subsidiary.

The whole purpose of Workpath is we want to create the rails for the future of health care. We feel really strongly that if you squint in 5 years, 10 years, 15 years — more people will wind up interacting with a healthcare professional on their phone or in their home than in a doctor’s office. We want to pull that forward, and own the platform to make that happen. 

Are there any other areas of health care that you don’t foresee Ro going into?
I think we have a long way to go before we would tackle incredibly complex health care — things like cancer treatment or diabetes. I would never write us out completely from any of those, because I think there are a lot of ways we can be helpful and active participants in providing great care.

We are primarily focused on cash pay right now — I don’t foresee us getting into insurance over the long-term. What has allowed us to grow quickly is being free from the restrictions that come from accepting insurance, and the overhead that goes into that.

We also feel really strongly that cash pay is one of the best ways to let patients vote with their wallet, and say this is the type of service I want, and I’m willing to pay for it out of my own pocket.

The digital pharmacy space is getting more crowded, most notably with Amazon launching its own service this year — what do you feel like is Ro’s advantage against other entrants in the digital pharmacy space?
We actually think that Amazon coming into the space is great for digital pharmacy and at-home mail order pharmacy. When you look at that space, it’s something that is relatively low in terms of overall adoption and being comfortable with at-home pharmacy. So someone like Amazon entering the space actually just continues to give credence that this is an area of growth — this is something that’s legitimate and can actually help consumers save dollars.

When it comes to competitive advantage, there’s a lot we we are going to be rolling out at the beginning of next year, so I won’t tip my hand too much. But I think where overall Ro has an advantage is [that] we’ve built the infrastructure, we have a national physician network that’s live in all 50 states and D.C. We have the at-home component, we have the telehealth component. So I think all of this together creates a lot of differentiation.

What do you feel like is still impeding the adoption of telehealth in the U.S.?
One of them quite honestly is just how complex the system is. A lot of people have access to telehealth through their insurance, but it is so buried within their insurance portal, and they need to remember three logins to get access to it.

The other is a lot of people default to, “what does my insurance company cover, and how can I get access to that?” It makes discovery of telehealth a bit tougher. I do think what has been helpful for us is being a bit more direct about the types of services we offer and the conditions. Rather than positioning it as a “we’re a doctor in your pocket, we can help you with anything,” [our strategy is] focusing on a few very specific conditions that people are probably thinking about every day.

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