Since winning several awards for its excellent business plan, the team of Horizon Health Solutions is ready to take it to the next level. Up until this year, the founders – a group of UAMS students – had been using UAMS-based technology to discover money-making opportunities for the school’s pharmacy.
After making the pharmacy hundreds of thousands of dollars, the recent graduates decided to launch the technology as a business outside of academia. Now, the team is offering its unique program to pharmacy owners. Not the Walgreens or CVSs of the country, but the smaller ones, to help them maximize profit margins.
By reaching out to local independent pharmacies, Horizon may have found a niche that’s not actually a niche. The market is huge. Currently, independent pharmacies serve close to a third of the United States. According to an annual review performed by the National Community Pharmacists Association, in 2020, the industry represented 34 percent of all retail pharmacies in the United States and a $67.1 billion marketplace.
Horizon co-founder and CEO Amy Hopper Swan said her mission is to help local pharmacies stay in business by giving them tools to compete against “the big guys,” thereby strengthening patient access to care.
To help these smaller pharmacies thrive, Horizon Health Solutions applies innovative software and database tools that were developed at UAMS. Brett Bailey, the group’s CTO and a pharmacist at the medical school, developed the algorithm that identifies opportunities for increasing profit margins. Bailey is also a data analyst and clinical informaticist with previous experience in community pharmacy — the perfect trifecta for the health solutions group.
The Horizon Health Solutions team is led by Hopper Swan, a recent graduate of the University of Arkansas MBA program; John Sherill, a Ph.D. and post-doctoral fellow at UAMS; Joshuah Walker, recent MBA graduate at the UA; and Solomon Isu, recent UA chemical engineering Ph.D. graduate.
Horizon’s primary product, PriceView, applies its technology to show pharmacies where to maximize the reimbursement they receive from insurance companies. Hopper Swan compares it to the housing market. A person selling a house will go to the MLS and pull comps of comparable houses before setting the sale price.
“Pharmacies don’t have that ability unless they’re the big guys,” she explained. “They have teams dedicated to data analysis. They own insurance companies, so they already know what that market price for a drug is.”
Since independent pharmacies don’t have that pricing information on hand, they often add an arbitrary markup to what they paid for a drug. Then, they bill insurance companies that amount. “They’re leaving money on the table; PriceView helps independent pharmacies get full reimbursement.”
In addition to PriceView, Horizon is developing two other products. One is a drug-cost acquisition predictor. It will help pharmacies understand how seasonal changes in drug prices could help them procure drugs at the right time. The other is a program that looks at the pharmacy’s patient population to understand what generic drugs they should buy to get the best margin from insurance companies.
The road to marketing PriceView has been marked with its own challenges. Early on, the first step was to gain a deep understanding of the industry.
“The U.S. pharmaceutical market, as most people know, is astonishingly complicated. Learning the ins and outs of the industry and tailoring our pitch to a broad audience has been probably one of the most difficult but exciting experiences for us,” Hopper Swan said.
The team spent hours on the phone with pharmacists and created an advisory board for support. The board encompasses experience and expertise in software, big data fundraising and pharmacy ownership.
Now that the group has launched out of academia, its current challenge is to bring in customers and establish Horizon Health Solutions as a sound business. Still pre-revenue, the company is on the path to making sales by the end of the year. Last year, PriceView made UAMS an additional $800,000 in profit. It’s only a matter of time before other pharmacies see the benefits.
The benefit of PriceValue is that it doesn’t require additional manpower. Many pharmacies are run by one or two people who are often stretched too thin. Owners don’t have time to sift through data and make pricing updates as drug prices change every day.
“We’re not introducing an extra layer of work,” the CEO emphasized. PriceView can be integrated into the pharmacy’s current management system. “We want it to be something that is just completely plug-in, and once it’s fully developed, it will be a one-click solution.”
Further down the road, the program will generate a popup that states it has identified a higher price that can be charged and offer a simple “yes” or “no” option for the price increase.
In the competitive pharmaceutical market, the Horizon team realizes it must do something special to stand out. So, it designed a revenue model to accommodate the tight margins pharmacies work with. “When a business operates on margins that range from 3 percent to 5 percent, they’re going to be hesitant to take on additional costs,” Hopper Swan noted. “We operate on a profit-sharing model, meaning we don’t make money until they do.”
For Horizon, the next items on the agenda are to gain more clients, raise seed money and hire a full-time VP of engineering. The idea is to hire someone who will work outside of UAMS to develop the customer interface and experience so that it’s more user-friendly for community pharmacies.
“We are definitely a small but mighty team,” Hopper Swan said. “We’re very passionate about the problem we’re solving for pharmacy owners and patients, especially in rural America and disenfranchised communities. Having a local pharmacy that’s walking distance from where you live is very important to many Americans. Often, communities may not have a physician, but they have a pharmacy, and it may be the only access to health care they have,” Hopper Swan said.
The team continues to passionately focus on supporting small pharmacies while remembering to remain agile to the constant changes of this industry.
“Every day, we learn something new, and we get more and more comfortable with the discomfort of potentially uncovering something that might change our course.”