- Revenues for Q1 2020 up 46% year over year
- Gross profit of 75% shows viability of business model
- Close to 12,000 independent pharmacies now using online marketplace
Stellar results recently reported by Trxade Group Inc. (NASDAQ: MEDS) are an indication that, increasingly, independent pharmacies, drug distributors and manufacturers are turning to the company’s web-based purchasing platform. At $2.2 million, revenues for Q1 2020 were up 46% year over year, with gross profit coming in at an extraordinary 74.4%. Now that more than 11,900 pharmacies are using the marketplace, Trxade seems set to fulfil its mission of signing most of the nation’s 24,000 independent pharmacies. If so, the company’s combined annual purchasing power of over $92 billion would make Trxade the nation’s premier marketplace for America’s vital pharmaceutical supplies.
Both for patients and pharmacists, the pharmaceutical marketplace that Trxade provides is a welcome adjunct to the healthcare sector. The online platform not only identifies the best available prices for prescription drugs, a constant concern of patients, but helps pharmacists avoid negative reimbursement costs, which reduce their profit margins. The fact that close to half of the nation’s independent pharmacies are already using the Trxade marketplace appears to be proof that the company is offering a superior solution to reduction of margins due to Prescription Benefit Managers (PBMs) via cost containment and better pharmaceutical accessibility.
Once unknown in the healthcare financing landscape, PBMs now dominate the U.S. health sector. Many PBMs have revenues that exceed those of the top pharmaceutical manufacturers. For example, Express Scripts reported revenue of $100 billion in 2017, about twice as much as Pfizer, which is the largest pharmaceutical company in the world. Incredible as it may seem, the distribution of pharmaceuticals is a much more lucrative business than the manufacture of pharmaceuticals. Indeed, distribution margins also exceed those earned by pharmacies at the retail level.
This isn’t the way it was supposed to work. The introduction of PBMs, third-party administrators of prescription drug programs, was intended, among other things, to reduce the purchase costs of drugs by consolidating their buying power. However, instead of driving costs down, PBMs appear to be doing the opposite. Over the past decade, independent pharmacies have experienced declining margins, due mostly to rising fees from these very same PBMs.
Now, however, Trxade is giving pharmacies a real opportunity to actually reduce purchase costs, along with other benefits. The integrated pharmaceutical services company provides its web-based purchasing platform for transactions between independent pharmacies and drug distributors. Known as the Trxade Exchange, the platform provides small pharmacies with access to the wider pharmaceutical distribution network, allowing them to search for and view products from manufacturers, buying groups and wholesalers on a real-time, continuous basis. In addition, through the Trxade E-Hub software, users of the Trxade Exchange become members of a network of associated pharmacies, as well as gain access to warehousing and drug-delivery services.
For more information, visit the company’s website at www.TrxadeGroup.com
NOTE TO INVESTORS: The latest news and updates relating to MEDS are available in the company’s newsroom at http://nnw.fm/MEDS
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