YaoBJ Files IPO Prospectus: Pioneering Medicine Price Comparison and Delivery Platform in China

Not long ago, TinyRx, a U.S.-based online pharmacy and delivery platform, secured $5 million in a new round of financing. The platform not only delivers medications to customers’ doorsteps within two hours but also compares prices across multiple pharmacies to help users obtain the lowest-priced medications. This service represents a novel business model in the pharmaceutical sector. In the Chinese market, “Yao Bijiao” (Medication Comparison) has adopted the same business model. As Andrew Lockhart, founder of TinyRx, stated, “This service helps ordinary working-class individuals save on various costs associated with purchasing medications.”

“Price Comparison” Model May Become a New Entry Point for Pharmaceutical O2O

Numerous factors influence online pharmaceutical consumption, such as delivery speed, drug prices, drug quality, and purchasing scenarios. Among these, price is a particularly significant factor. The practice of reducing users' medication costs through price comparison has already emerged as a notable trend.

TinyRx partners with local pharmacies to rebalance asymmetric drug information, empowering users with greater transparency and cost savings. In China, where the majority of pharmaceuticals are dispensed by hospitals, TinyRx also integrates hospital drug data to break down information asymmetries. This enables users to access comprehensive information from both hospitals and nearby pharmacies when selecting medications, allowing for informed choices and significantly reducing out-of-pocket costs.

Regardless of the approach adopted domestically or internationally, the primary objective is to minimize costs for users, who are the ultimate beneficiaries. In the past, patients purchasing medications from hospitals or pharmacies faced limited information and few choices. Today, internet-based platforms enable access to diverse sources of information, allowing users to make comprehensive comparisons and select the optimal option. An overview of China’s pharmaceutical O2O market reveals a saturation of products that solely emphasize “fast drug delivery,” resulting in severe homogenization and poor user acceptance. The “compare prices across three pharmacies” model has emerged like a breath of fresh air in this highly competitive landscape, and this novel entry point may well attract greater attention from investors.

The prescription drug market will usher in new opportunities without violating regulations.

The prescription drug market is undoubtedly a lucrative goldmine. In the United States, online sales of prescription drugs are supported by policies that permit e-commerce, allowing consumers to purchase prescription medications via the internet. In China, the situation remains unclear. The "Draft Measures for the Supervision and Administration of Online Food and Drug Operations," released in 2014, proposed lifting restrictions on the online sale of prescription drugs by pharmacies, but progress has been stalled. While current policies governing prescription drug sales in China and the United States differ slightly, their developmental trajectories show strong convergence.

TinyRx’s primary function is to reduce the cost of purchasing prescription medications for users and provide home delivery. In the United States, buying prescription drugs online is commonplace, a practice not yet implemented in China. However, domestic business models are more ingenious, leveraging the inherent advantages of Online-to-Offline (O2O) platforms to directly connect prescription drug sales points with end users. After taking a photo or uploading their prescription, users submit a request to purchase prescription medications. Pharmacies then respond by delivering the medication to the user’s door, with pharmacists collecting the physical prescription upon meeting the patient. Although this “indirect approach” is not straightforward, it effectively ensures medication safety for patients while complying with regulatory requirements.

This service model differs from pure B2C online sales of prescription drugs, as all services are completed offline, fully consistent with the process of users purchasing prescription drugs at pharmacies, but with a different purchasing scenario and an enhanced user experience.

The Extension of the Internet Pharmaceutical Service Chain Creates More Possibilities

In addition to offering a price-comparison tool, TinyRx helps users manage prescriptions and understand the pharmacological properties of their medications. Andrew Lockhart, CEO of TinyRx, stated that the company plans to consolidate its network of partner pharmacies in the future, centrally providing them with low-cost procurement channels from upstream suppliers, thereby reducing their inventory costs.

Home delivery of medication is merely the beginning of pharmaceutical services. However, domestic medication delivery products have put the cart before the horse, offering no real service from start to finish. A product may enter the market through a single function or service point, but it cannot stop there. It must extend into a comprehensive product or service chain to sustain its vitality. To draw an analogy from another industry, Xiaomi Technology started with a single smartphone and expanded into a sustainable chain of products and services, ranging from mobile phones to smart home appliances, potentially achieving the closed-loop business ecosystem envisioned by Lei Jun. Pharmaceutical services should follow the same path. Only by expanding into broader services can companies retain users and gain market recognition. Establishing a complete, closed-loop commercial service ecosystem is an essential route for any successful product.

What users need is a comprehensive suite of pharmaceutical services, far beyond simple medication delivery. It is hoped that more products like TinyRx and Yao Bijiao will emerge, leveraging diverse business models to serve users and meet their daily medication needs, thereby fostering a vibrant and competitive landscape in the pharmaceutical sector.

(The article content is provided by the author, Da Xiong.)

“For those interested in learning more about the project, please contact me by adding my WeChat: 18310282126 (ID: Zheng7).”

“Still craving more? If you have a project that needs coverage, please send your materials to: zh.qi@vcbeat.top”