And You Thought Biotech Was Risky
This article was originally published in Start Up
Executive Summary
Given the enormous proposed market caps on drugstore.com's and PlanetRx's IPOs, you could be forgiven for inferring that the Internet pharmacies are as close to a real business as anything to come out of Silicon Valley's dream factory. But you'd be wrong. Risks abound. And one big problem is access to reimbursed patients. Drugstore.com's costly deal with Rite Aid shows just how much the Internet pharmacy was willing to pay, both in terms of dilution and strategic flexibility, to get a solid connection with patients who have drug benefits.