The long and litigious saga of Hippo Technologies may finally be over now that the company is finally launching its service to sell discounted prescription drugs to members just three months after settling a lawsuit with its chief competitor, Blink Health.
Hippo and Blink were locked in a lawsuit for much of last year, with Blink accusing the company of stealing pretty much every aspect of its business. For its part, Hippo’s chief executive and co-founder had sued Blink for wrongful termination under whistleblower protection rules after he allegedly uncovered corporate malfeasance at the discount drug membership service.
Both companies use a mobile app and online tool to help consumers find low prices on medications. In its March 2018 suit against Hippo, Blink wanted up to $250 million and had accused the company, which was founded by former Blink employees, of obtaining trade secrets, sabotaging existing contracts and unfairly competing with Blink’s business.
There’s no doubt that bad blood exists between Blink Health’s co-founders, the brothers Geoffrey and Matthew Chaiken, and Hippo co-founder Eugene Kakaulin.
A former chief financial officer at Blink, Kakaulin filed a suit in 2016 claiming that Blink had fired him in retaliation for alerting the company founders to security violations.
With most of those lawsuits now settled, Hippo is bringing its service to market. The company said that it can save patients up to 97 percent on their prescription drugs at almost any pharmacy in the country.
“People deserve to know how much they will pay for meds and get access to the lowest prices available. This is why we started Hippo,” said Kakaulin, the company’s co-founder, in a statement.
Kakaulin’s co-founder Charles A. Jacoby grew up in the healthcare business watching his father work as a general practitioner and grapple with prescribing patients with drugs that they can afford.
“Markets are only fair and efficient when people are presented with pricing options. Whether people have good insurance, bad insurance or no insurance at all, they should check the Hippo price before going to the pharmacy,” Jacoby said in a statement.
Access to low-cost medicine is a significant part of what’s broken about healthcare in the U.S. today. Blink and Hippo are among a slew of companies trying to provide a fix, including GoodRX, Amazon (through its PillPack acquisition) and RxSave.
Hippo and its competitors operate on a simple premise. They cut out middlemen and guide consumers to use generic drugs, taking a cut of the sales from the drug manufacturers. The process saves customers money and can also generate some revenue for pharmacies that agree to work with the companies.
Pharmacy benefits managers aggregate the purchasing power of buyers through insurance networks to cut the prices that customers have to pay for their medications. But many people argue that the discounts are not significant, and most of the difference in cost just goes to line the pockets of the benefits managers themselves.
What companies like GoodRX, Hippo and Blink do is bring those benefits to anyone who signs up. Hippo gives participating pharmacies a guaranteed rate for drugs in exchange for lower prices. Sometimes the company will make money on the sale of a drug and sometimes it will lose money, but it ideally is profitable by arbitraging costs across a population.
To sign up for Hippo, potential customers can text “Hello” to Hippo (44776) on their phone or visit the company’s website to receive an individual, digital Hippo card.
Users can then compare costs between medications at local pharmacies and see which location is offering the best price. Once in the pharmacy a user just shows the pharmacist their Hippo card and can start saving.