Q3 Earnings Show Digital Healthcare Market Expanding

As digital tools and technology become an integral part of healthcare, two key players — GoodRx and Oscar Health — are making strides in the industry. Both companies have demonstrated solid financial performance while focusing on enhancing digital engagement and improving accessibility to healthcare services. Despite facing challenges, each is carving its niche by prioritizing consumer-centric innovations to assist patient interactions with their healthcare systems.

GoodRx by the Numbers

Third-quarter financial results for GoodRx saw an 8% increase in revenue, to $195.3 million, driven by a 4% rise in prescription transactions revenue and sparked by a 7% increase in monthly active consumers. Subscription revenue declined 8%, to $21.3 million, due to the sunset of the Kroger Savings Club partnership formed in 2018. Kroger Savings Club contributed $2.1 million of subscription revenue in the third quarter 2023 and zero for this year’s third quarter.

Pharma manufacturer solutions revenue grew 77%, to $28.1 million, due to the previous year’s restructuring and strong organic growth, including gains from point-of-sale discount programs. The company posted net income of $4 million, reversing a loss of $38.5 million last year.

“In a world where there is increasing attention on medicine affordability and access, we believe the strategic high ground belongs to brands and companies that benefit patients and remove friction from a complicated healthcare ecosystem,” interim CEO Scott Wagner said.

“At GoodRx, that’s our North Star, and we believe it’s enabled us to gain share in our category and strengthen our value proposition throughout 2024. We continue to build momentum on our programs with brand manufacturers and anticipate about 20% year-over-year top-line growth in our pharma manufacturer solutions offering for Q4 2024, and 20%-plus for full year 2025. And while the retail pharmacy environment is experiencing short-term choppiness, we believe we continue to provide invaluable support to our partners by driving traffic and helping them meet their merchandising goals.”

Wagner underscored the company’s commitment to improving affordability and access in a challenging healthcare environment. The digital healthcare platform continues to expand its offerings, particularly through partnerships with pharmaceutical manufacturers and point-of-sale cash discount programs, which are gaining traction. Despite facing challenges in the retail pharmacy sector, including store closures by major chains like CVS, Walgreens, and Rite Aid, Wagner is optimistic about its future.

“We’re seeing strong momentum around our point-of-sale cash programs and believe the impact of these programs will only get bigger in the future,” Wagner added.

“Our offering to brands are now threefold. First, we help brands surface their co-pay cards and patient assistance programs to high intent patients. Second, we create clear and affordable cash prices for brand medication that often isn’t covered by insurance. And third, we now offer eCommerce capabilities that allow brands to integrate their direct-to-consumer experiences into our platform.”

Oscar Health: Expanding Market Reach

Oscar Health’s third-quarter results were mixed, as revenue rose 68% to $2.4 billion, and the company’s total membership also grew 68%, to 1.65 million, driven by demand for its individual and small group health plans.

While the company’s medical loss ratio (MLR) rose to 84.6%, due to higher medical costs tied to Special Enrollment Period (SEP) memberships and an uptick in COVID-related claims, company officials remain confident in its growth trajectory as Oscar Health’s digital-first model continues to drive membership gains, CEO Mark Bertolini noted.

Oscar Health is on track to achieve net income profitability in 2024 and has expanded its addressable market to about 11 million lives, up by 700,000 year over year, he added. Company officials, however, expect continued pressure on its MLR due to SEP membership dynamics, while dealing with competitive pricing pressures in the market.

“We’ve had more SEP additions than anticipated, which increased our top-line revenue guidance,” Bertolini explained. “The performance of SEP members has been on track with expectations, and utilization has been slightly favorable. The story is more about having more members than expected, which is reflected in both top-line and bottom-line performance.

“Oscar reported positive third-quarter results with strong revenue growth and improved financial performance. Our technology continues to enhance our growth and positions us to efficiently scale the business.”