‘The overall digital health category is in the very, very early innings’: Capsule CEO

Capsule Founder & CEO Eric Kinariwala joined Yahoo Finance Live to break down his thoughts on the evolving digital health category and how Capsule is partnering with companies to meed the needs of the modern consumer.

Video Transcript

- Eric Kinariwala is the founder and CEO of Capsule. And when we talk about all of these different COVID-19 issues, Eric, by the way, it's good to see you again, as you've been on with us before.

ERIC KINARIWALA: Thanks for having me.

- When we talk about how we've all gotten used to the digital economy, the digital medical economy, which is what you-- the space you're in, is where the future seems to lie, right?

ERIC KINARIWALA: The future of-- the future of health care is seamless. It's connected. And this is an absolutely essential point, a turning point for the health care industry. We think about it as a do or die moment. The pandemic has completely shifted the way consumers engage with their health care. It's gone from something that's analog and archaic to something that is very increasingly becoming digital and mobile first.

Capsule was started-- you know, I started Capsule six years ago with the mission to build a pharmacy that works for everyone. And what that means is for sure for the 70% of American adults that go to the pharmacy at least once a month but really to help and support doctors, hospitals, insurance companies, and drug makers to take care of the people they need to take care of.

And what we've done over the last six years is we are the-- Capsule is the pioneer in creating the digital pharmacy category. And we remain the leader. And we're the leader in the category for two basic reasons. One is that we have built the very best consumer experience. We've made it extraordinarily simple for people to get and manage their medications. They can actually stay healthy and live their lives in the way they want to.

And the second is that we've spent tens of millions of dollars investing in building out a very, very robust technology platform that enables us to offer deeply personalized experiences for those consumers in conjunction with all of our partners. And so what you're seeing us do, and you'll see more of us do, is partner across the health care industry using that technology platform, the API we've built.

ANJALEE KHEMLANI: Eric, I see that-- this is Anjalee here. I see that you're talking about partnerships. And I know you recently did one with Ginger for mental health. That seems to be a little bit different strategy than what we've seen with any company that's looking into the pharmacy space. And of course, there's that pressure from Amazon. So let's talk about that. Why go this route at a time where you're facing that increasing pressure from the almost just anticipation from Amazon Pharmacy?

ERIC KINARIWALA: You're right. Capsule is absolutely different from anybody else out there and any other company. And what we're doing and what we've done and what we'll continue to do is, one, innovate on behalf of the consumer and make sure that we are consistently delivering the best consumer experience. Two, make sure that we harness the power of our technology platform to deliver better health care outcomes.

And three is to create that simple, single, holistic place where the consumer can access all of the things that she needs in her health care journey, whether that's mental health, whether that's telemedicine, whether that's over-the-counter products. Because the pharmacy is the most frequent interaction point in the entire health care system, Capsule's working across the ecosystem to bring all of these different parties together.

And what you're seeing with Amazon is Amazon is trying to go it alone and to try to build that entire stack themselves. Our belief, our mission has always been to win together across the health care system, to find and partner with people that are best-in-class at what they do. Because we think health care is too complicated and too big to go it alone. And that it takes the entire system of working together and innovating on behalf of the consumer to really drive the change that both the consumer needs and that the system needs to deliver better health care outcomes.

SEANA SMITH: Eric, that's interesting then. So it sounds like, even though this space is getting a little bit more crowded, you still see it as just in the beginning stages. So a big name like Amazon getting into this space and, from what it sounds like you're saying, it almost sounds like there's a potential there in order just to grow this industry rather than viewing a big competitor like Amazon as a threat.

ERIC KINARIWALA: The overall digital health category is in the very, very early innings. And even specific to pharmacy, you know, 2% of prescriptions are obtained and managed digitally. That is a very, very low percentage. And I think as we look over 10 years, we see that number increasing by 10 or 20-fold. I think what's really important is that the traditional conventional health care industry, doctors, hospitals, insurance companies, this is an essential moment, both because of the pandemic but also because Amazon is coming.

And Amazon is coming for everyone's lunch. And what Capsule's strategy has been and what we are very successfully doing is partnering across that health care ecosystem to help everybody else be more successful to meet the needs of the modern consumer.

ANJALEE KHEMLANI: So then how do you anticipate growing profitably? And do you see yourself on the public market then as a result when, with all of this going on in the mix and the crowdedness of it all, with, you know, sorry, competitors like GoodRx also out there already sort of in the space and feeling the same pressure?

ERIC KINARIWALA: The pharmacy industry is $400 billion. And Capsule is growing exponentially. We are continuing to grow our business in New York very, very rapidly. We are alive in half a dozen markets across the US, with more to come. And I think very well Capsule could be an excellent and fantastic public company. But for now, we are laser focused on delivering better consumer experiences and partnering across the health care system to build that one-stop shop for everybody to access all the things they need to take care of themselves and the people they love.