GoodRx (GDRX) UBS Global Healthcare Conference 2024 summary

Forward-looking guidance and industry dynamics

• Anticipates single-digit percentage growth for 2025, with a wider range due to uncertainty in PBM and pharmacy negotiations.

• Pharma Manufacturer Solutions expected to grow 20% in Q4 and accelerate year over year.

• Margins have improved by 520 basis points year over year, with continued accretion expected.

• Volume in the prescriptions marketplace is up, with monthly active users increasing 7% year over year.

• The outcome of PBM-pharmacy negotiations on reimbursement rates will determine growth within the projected range.

Direct contracting and business model evolution

• Direct contracting now accounts for over 30% of prescription volume, up from 20% at the last Investor Day.

• Eight of the top 10 retailers have some form of direct contract, offering pharmacies higher margins and pricing flexibility.

• Direct contracts allow tailored pricing strategies, supporting pharmacy margin needs and driving volume.

• The shift to direct contracting is driven by retailer demand and may continue to grow, but its future share is uncertain.

• Direct contracting programs are customized by retailer and drug basket, often used to drive seasonal or strategic objectives.

PBM and pharmacy ecosystem trends

• Pharmacies are under increased margin pressure, giving them temporary leverage in negotiations with PBMs.

• PBMs have historically prevailed in reimbursement negotiations, but current dynamics may allow pharmacies to gain ground.

• Most prescription volume flows through large retail chains and grocers, not independents.

• GoodRx acts as a bridge, offering higher margins to pharmacies through direct contracts and brand reimbursements.

• The company’s marketing and technology investments help pharmacies reduce script abandonment and improve operational efficiency.