GoodRx Holdings, Inc. (GDRX) Earnings Call Transcript & Summary

Great. Hello, everyone. Thanks for joining us at the 39th Annual JPMorgan Healthcare Conference. My name is Doug Anmuth. I cover the Internet sector at JPMorgan. So it's my first health care conference, but I'm happy to sneak in and host GoodRx, which recently went public in -- last September. So GoodRx is building the top consumer-focused digital health care platform in the U.S., helping Americans get the health care they need at a price they can afford. GoodRx connects consumers with affordable and convenient prescriptions and medical care, including telehealth, mail order prescriptions, doctor visits and lab tests. GoodRx has helped Americans save more than $25 billion since 2011, and it's the #1 most downloaded medical app in the last 3 years. The company had almost 5 million monthly active consumers as of 3Q, and we estimate more than $540 million in total revenue in 2020. So with us today from GoodRx are Co-Founder and Co-CEO, Doug Hirsch; and CFO, Karsten Voermann. Doug has spent his career in the consumer technology space. He was one of the first 30 employees at Yahoo, where he built early online communities like Geocities and Yahoo! Groups. He also ran Yahoo! Entertainment. He went on to join Facebook as VP of Product and later founded DailyStrength, a social network focused on health and wellness, before cofounding GoodRx in 2011. Karsten has been GoodRx's CFO since March of 2020. He previously served as CFO of Mercer Advisors and also with Ibotta. He has more than 20 years of financial experience with public and private companies. So Doug and Karsten will run through their presentation for about 20 to 25 minutes or so, and then we'll do Q&A. [Operator Instructions] And I will quickly turn it over to Whitney Notaro, GoodRx's VP of IR, for a brief disclaimer.

Thank you, Doug, and thank you all for joining our presentation tonight. Before we begin, I would like to remind you that management's remarks in this presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our Form 10-Q for the 3 months ended September 30, 2020, and our other filings with the SEC. Any forward-looking statements made in this presentation represent our views only as of today, and we undertake no obligations to update them. For additional information, please refer back to this disclaimer slide in our presentation materials. I'll now turn it over to Doug.

Thank you, Whitney, and thank you, Doug. A great name, by the way. So yes, we're team GoodRx, and we're here to give you a tour of what we're up to. I'm Doug Hirsch. Also with me today is Karsten Voermann, our CFO. I just wanted to briefly highlight that we're just 2 of an incredible team of folks here who are focused on really trying to improve health care in America. We have a deep bench of both technology executives as well as health care -- seasoned health care executives that make up the incredible people that work here at GoodRx. So before I got -- go too deep into our business, I thought I'd start with just an introductory video to educate folks who may not be super familiar with GoodRx and what we do. Disclaimer, this was shot pre-COVID and pre-beard, so you'll see a slightly different version of me. But maybe we can roll that video, and then we'll dive in. [Presentation]

So that's GoodRx in a nutshell. The birth of GoodRx was really a personal experience that I had way back in 2010 when despite being employed with perfectly fine insurance, I went to a pharmacy and presented my prescription to the woman in the white coat behind the register, and she said it'd be $500. And that just blew me away. Again, I had insurance, I thought I was all good to go, and I was shocked. And so I chose to take that prescription back. I walked to the other chain pharmacy across the street where they said it'd be $250. And I then, curious, took it to a third pharmacy where they said $450. And when I left, they chased me in the parking lot and said, "I know I said $450, but maybe we can work out a deal. I want you to get the meds that you need." And for me, it's just like blew my mind, right, that this inefficiency and this kind of mess was central to the U.S. health care system, and it was just frustrating everyone. And so I took it back to my friend, Trevor, and we dove in. We basically said that there needs to be a better way for us to figure out this problem, and that really was the genesis of GoodRx. And in many ways, it's what drives us today, which is just trying to empower and educate Americans and give them the tools so that they can get the health care they deserve. That experience I had back in 2010, next slide, please, was not unique to me, right? The reality is, is that 20% to 30% of prescriptions in the U.S. are not filled. That means that there's a physical pharmacy that pays lots of rent with fancy pharmacists who get lots of salary. And they put the pill in the bottle and it's left there at the counter because someone shows up and they don't want to pay $200, $300. They can't afford $200, $300. And that's just wildly inefficient, right? More importantly, just to see a doctor in this country is so painful, right? There's an average wait time of 24 days and often longer just for a new patient to see a doctor in this country. So think about all those needs that just go unmet or those problems that just get pushed under the rug because people just simply aren't able to get the access they need. And all these problems lead to incredible cost. Not just to the consumer, of course, where someone dies every 4 minutes with these problems, but also $300 billion in cost to our system every year when people are simply unable to access the care that they deserve. Next slide. We all have to say America's #1, but when it comes to health care quality, we are definitely not #1. In fact, we're #11, I believe. You can click next, and you'll see exactly where we rank in the health care rankings, which I believe is #11 out of all the OECD countries. And yet we spend twice as much as all these other countries. And that just seems embarrassing, right, that we're in the situation where we're spending more, we're getting less, and we're even driving people to bankruptcy. 66% of all personal bankruptcies are linked to medical costs. Next slide, please. Meanwhile, if you take a step back to when I started, I'm old enough to have been at Yahoo!, as Doug highlighted before, makes me feel really old, actually. But if you take a step back to then and now, you see all these industries, these inefficient markets that have been disrupted by incredible consumer-focused, tech-enabled solutions, right? So I mean, in 2021, would you actually just call up United Airlines and take whatever price they gave you for that flight you need to take -- destination? If you were going to get a taxi, would you just put your hand up these days? There are so many efficiencies that have been gained across all these industries as we've embraced technology, presented a better consumer experience using technology. And yet, for all the revolution that's had across all these different industries, next slide, please, where's health care? Health care is a $4 trillion industry. It dwarfs all these other industries by far. And yet, it remains, as big as it is, totally inefficient. And that is the gap that GoodRx seeks to fill. Next slide, please. GoodRx helps Americans get the health care they need at a price they can afford. I cannot emphasize enough. This is what I wake up and do every day. I've been doing it for a decade, I will keep doing it. We need to help Americans get the health care they need at the price they can afford. Next slide. The way we do it is we build the leading digital platform for consumer health care. In an area where there's no trust and there's all opacity and nobody has the answers, there's all these fancy words that scare people away, we're embracing consumers and we're giving them the tools and knowledge and education that they need so they can get that health care. Next slide, please. We started with prescriptions. And look, we had the fortune of choosing the right market to go after to try and build this disrupting market, right? It's a $524 billion market with over 5 billion prescriptions prescribed every year. But remember, there's other unique things about prescriptions that make it especially easy to disrupt. Remember, you pay with cash or credit card at a retail environment, right? You do it often, every 30 days, maybe every 90 days, to get a new prescription. And consumer choice is a viable option, meaning you may switch pharmacy A to pharmacy B without being worried that you're going to get a different product, necessarily. The quality options are there. You just want to simply get a fair price and you want to be able to be empowered, to make -- the knowledge and the choices that you can around the cost of your care. Next slide. Moving from there, there's so much more that we can do. Again, in a $4 trillion market, we believe our TAM is actually $800 billion or more, right, where you take not only the prescription drug marketplace, which we've made so much progress in over the last 10 years. But also manufacturer solutions, which we'll talk a little bit more about today, where we're actually connecting manufacturers directly to consumers and really trying to disrupt what I'd argue is an old-fashioned way of manufacturers trying to talk to both physicians and consumers about the way they can consume brand drugs. And then telehealth, which we all know, certainly in the world of COVID and all that, is here, but how is it here, right? It's not necessarily going to take over the whole world, but it's going to play an important role in the future of American health care, and GoodRx is perfectly poised to address that market. Next slide, please. The challenge with health care pricing, and one of the things I'm most proud of over the decade that we've been doing this, is it's incredibly complicated. Every day, over 200 billion data price points are adjusted by GoodRx. And there are all sorts of things, things you might not actually think about at first glance. Everything from a pharmacy savings program, where they're discounting certain prices; usual and customary prices, which are just cash prices a pharmacy will accept; Medicare co-pays; pharmaceutical manufacturer programs; patient assistance programs, all of these different PBMs that we're familiar with who offer wildly different contracts and wildly different prices for even down to the individual bottle that a consumer's pills come out of. All this incredibly complex information gets put into the GoodRx machine, and we output something incredibly simple, which is just a basic price that a consumer can understand. Next slide, please. And this is really what it looks like, right? GoodRX is so simple and easy to use, right? We were founded on the premise of just without a consumer having to remember passwords or sign up or anything, you could literally come in, type in the first few letters of a drug, see what the drugs will cost in pharmacies near you, and then actually receive that price by presenting a coupon. We actually invented [ that word ] in this space, so just like you do in all these other industries. When you use GoodRx, you save over 70% on average. And most importantly, we improve your health. We improve adherence, right? When people who come to GoodRx actually can fill their meds, actually have the empowerment to take that first step to book that doctor appointment or do whatever it takes to, again, be able to find an affordable solution to their care. And the best part of -- one of the things I love most about GoodRx is not only do we help consumers, but we help everybody else around the consumer, all those other businesses and industry stakeholders that drive and that provide these services to consumers. Next slide, please. Our platform delivers value to everyone. Let's start at the top. $25 billion in savings to consumers. That, I'm just so proud of, and I'm so happy that we've been able to drive that value back to consumers. And NPS score with physicians, physicians that early on embraced GoodRx. And today, the vast majority of American physicians certainly have patients who've used GoodRx and often promote GoodRx to their patients, right? And 86 NPS is off the charts in terms of physicians want consumers to get the care, and they want to be able to find an affordable solution to the drugs that they prescribe, and we fill that gap. Over 70,000 pharmacies. Pretty much the vast majority of the pharmacies in America accept GoodRx. And not only when they accept GoodRx, they obviously make money using GoodRx, but they push more front and back of store revenue, right? So consumer comes in, and obviously, they get their prescriptions, but they also get their groceries or they get their supplies and toiletries and whatever else they might need. PBMs. GoodRx is so proud of the relationship with over 12 PBMs of all shapes and sizes. Those relationships have been fruitful and have just gotten deeper. And we are very proud of the relationships we've had with PBMs for a long time with these long-term, solid partnerships, where we both view each other as clients, right? We're happy to have them because they enable us to lower prices for consumers. And for them, we're a revenue source, right? We help them actually just realize some profit. And most importantly, manufacturers, as we just talked about, right, where we're able to connect consumers directly to manufacturers, consumers and physicians. We've launched over 30 partnerships in the third quarter with targeted advertising, and we expect to do even so much more to really just close that gap between manufacturers who tries to desperately to find consumers who are going through specific issues and really connect them directly between -- have that patient-manufacturer relationship be closer. Next slide, please. Oftentimes, some people hear about GoodRx, they just assume it's, oh, those are for uninsured folks. Those are for people over there. It's not me. I don't need that. I have insurance. But the reality is, is 74% of the people that use GoodRx have insurance. Those people that are coming to us are saying, "I know I have insurance, but I'm still not able to afford my prescriptions. I'm still unable to afford my care." So as you can see, we really represent America, right? All types of Americans, regardless of your insurance status, are finding that there are better ways, and there's just, frankly, a better way for a consumer to understand and then ultimately purchase the health care that they need. And again, we have an NPS with consumers of 90. I mean, that's way, way higher than brands that you're probably familiar with and you think most Americans love. And that's because we're providing answers. We're providing solutions. We're an enabler. We say yes when so much of health care to a consumer really just says no. And I'm so proud of that, and that is -- that is part of what makes us so special, and that's part of our competitive moat, which is we just -- we have this brand that is loved by everyone. Next slide. Karsten, do you want to take it from here?

Sure thing. Thanks, Doug, and thanks to everyone who joined our presentation as well. We love talking about GoodRx, and we're grateful for the opportunity to speak with you. Over the next few slides, I'll speak in a little more detail about our offerings, starting on this slide, Page 18. And then we'll also talk about how we monetize them before I return the conversation back to Doug. So on Slide 18, this is an array of what our different offerings are. Today, about 90% of our revenue comes from our prescriptions offering and our prescriptions offering is the one that allows consumers to save on medications. We then went on to create our subscriptions offering, which provides even greater consumer savings, and it also creates more LTV and recurring revenue for us. Then we have our manufacturer solutions offering. Our manufacturer solutions offering allows drug manufacturers to engage meaningfully with consumers in a way that allows them to present their co-pay assistance programs and deductible assistance programs that are very, very valuable to our users and, in fact, to all Americans. And then finally, we have our telehealth and GoodRx Cares offerings. And those are important because they represent second entry points into the GoodRx platform, along with our pharmacy business and our pharmaceutical offering and because they allow the consumers to get the care they need at a price they can afford. So let me dive into those in a little more detail, starting on Page 19. On 19, we show how a prescriptions transaction example actually works. The way we monetize is through the PBM partnerships that Doug articulated a moment ago. So we take a bit of the take rate off GMV, and that take rate effectively is sourced from the PBM's margins. They share a portion of their margins with us in return for us driving lots of incremental volume to them and incremental revenue that's associated with that incremental volume. So going from left to right, I'll talk through each of the bars. If you imagine a given prescription costs $100, that could be the full retail price in the left bar. As Doug said, our savings rate averages over 70%. So a GoodRx discount takes that $70 off. And then you have a drug that -- or a medication that a consumer might be paying $30 for with GoodRx at a pharmacy. In connection with that $30 GMV, the third column, GoodRx will take its take rate, which is 14% to 15%, which is the little yellow box. The PBM will get its little gray box, which is its remaining share of its margin. And then after we've taken those amounts off, the pharmacy and the manufacturer get paid as they would in any other pharmacy-related transaction. So again, our source of revenue in our prescriptions business comes from getting a lot of consumers great savings and then being able to drive that consumer volume to our many PBM partners, over a dozen, in fact. Moving on to Slide 19 -- or to Slide 20, excuse me. Our subscriptions business, like -- our subscriptions business, like our prescriptions business, is the first of our other revenue offerings. So subscriptions, our manufacturer solutions offering and our telehealth and GoodRx Care form other revenue. And to put some perspective around other revenue, while our core prescriptions offering has historically grown very rapidly, in the 40s and 50%; other revenue, these offerings, have grown even faster. They formed about 2% to 3% of revenue in 2018. They formed about 5% to 6% in 2019. And currently, in the most recent periods, they're over 11% of revenue. So quite a steep trajectory. We particularly love our subscription offering as well, as the first one of these other revenue offerings I'll talk about, because subscriptions allow us to deliver even more savings to consumers, but they also allow us to have about 2x the contribution compared to our core prescriptions offering, and they generate highly recurring revenue. Our prescriptions offering has a repeat transaction rate of over 80%, which is great, but our subscriptions offering, of course, is completely recurring. I'll move on to 21 to talk a little bit about our manufacturer solutions business. Our manufacturer solutions offering is one of my favorites as a CFO because the economics around it are so attractive, but also because it really helps us -- allows us to help consumers in a differentiated way, even from our prescriptions offering. So this is also the highest-growth and the highest-margin line of business we have, and it represents a huge $30 billion TAM that we've barely penetrated into, even though we're perfectly situated to attack it. It provides consumers with access to incredibly expensive, in some cases, branded medications. And it also provides us with an additional way to monetize these branded drugs besides our prescriptions and subscription offerings. So we have approximately 15 million visitors to our platform every month. And approximately 20% of those 15 million visitors, so over 3 million visitors a month, come to our platform looking for information on how to save money and gain access to branded medications. And the branded medication manufacturers' businesses depend effectively on allowing consumers to get on to their medication programs. And given how expensive they are, branded drug manufacturers have created co-pay assistance and deductible assistance programs that enable consumers to get over the hump of not having the money to buy their first prescriptions before their deductible might be met, as an example. And it's very important for them to market these programs. You may have seen ads for things as varied as HUMIRA and BIKTARVY on the news in the evening. But clearly, when they're advertised on the news, that's completely untargeted, number one; and number two, it doesn't allow for the manufacturer to truly engage with the consumer, and that's where GoodRx comes in. GoodRx has a differentiated way to do that, given we have 15 million visitors, and again, 20% or 3 million plus, who are actually looking for the specific pharmaceutical a manufacturer might be trying to advertise the co-pay assistance programs for. So it gives us incredible targeting. It also gives us incredible relevance because these are consumers, many oftentimes, with a prescription in hand. They have the prescription, they have their diagnosis. They're just looking how to make it all work together. And that's where we come in. We present them with the relevant information from manufacturers in a variety of ways, from care portals through to -- in association with searches for a given manufacturer's medication. And by doing that, we have the relevant content presented to the relevant consumer and allow that one-to-one engagement by drug manufacturers with our users in a way that's so valuable for both parties. And along with having all the visitors, since we already have our platform built as well, and since that platform has ample advertising inventory, there isn't real cost other than sales cost associated with continuing to grow this business even faster than it already is growing today. Okay. So we've talked about most of the main business lines. What remains on Slide 22 is our telehealth and our GoodRx Care offerings. I'd mentioned in the cover slide that showed all our different offerings that these are so important because they offer an incremental entry point to the GoodRx platform. So you can either come in through prescriptions and then you might become a subscription user or you might take advantage of our manufacturer solutions offerings; or alternatively, through telehealth and through GoodRx Care, you can come in through that avenue. You can get a diagnosis. And then you can actually -- if you're diagnosed, which most are, is associated with the prescription, leverage our prescriptions offering and save money when it comes time to actually get the prescription. And you can even use our mail orders offerings to have it delivered to you if you so choose. It's an exciting area for us because it allows us to differentially bring people in who might not otherwise come to the platform, and we're very pleased with the attach rates we're getting between these offerings and our other offerings, like subscriptions and prescriptions, respectively. In particular, it's important because some consumers come to us looking to save money on their medication, but their prescription may have run out and then they need a new end. And we've created this incredibly fast, incredibly easy way to get that new prescription that they need and then become a GoodRx user in our prescriptions offering or in our subscriptions offering. So how does all this come together? Let me talk about that a little bit on Slide 23. So 23 basically shows how the different elements of our business reinforce one another. It all starts, as Doug said, by having the most trusted brand. The 90% -- or the 90 NPS with consumers, the 86 NPS with docs and health care providers broadly are critical because that trusted brand is what brings people to GoodRx, and once they're here, cause them to expand their use of our services. What that -- what bring them here means is that it helps us grow our scale further and further. And scale is important. We're by far the largest relative market share player in our space. Our market share is a multiple of times bigger than our nearest competitor's is. And the reason that's so important is because that helps to drive our ability to extract the best pricing for our users and means that our savings rate is going to be better on average than anybody else's. And those strong consumer savings in turn, which increased from around 59% a couple of years ago to well over 70% today, those strong consumer savings expand our unit economics and expand our resources so that we, in turn, can continue to invest in our platform and in our product. And we've done that both organically and inorganically on the product side. So for example, our subscriptions offering and our manufacturer solutions offering, totally organic. Our telehealth offering was originally catalyzed through an investment and an acquisition of a company called HeyDoctor, which was an amazing acquisition for us and allowed us to rapidly expand in ways that would have taken longer had we done it organically. And those kind of product expansions are what makes our platform the leading one. And again, having a leading platform, providing what consumers want, reinforces the trusted brand. So it's in that sense that I say all the elements of our business together work with one another to reinforce and make each other stronger. Okay. I'll take a second on Slide 24 just to talk about what some of our KPIs and metrics look like before I turn back to Doug. We're the #1 most downloaded medical app in the U.S. and have been for the last 3 years. As Doug said, we're all incredibly proud of the $25 billion that we saved consumers so far. We also have 15-plus million visitors to our platforms every month, as I articulated, and work with over 70,000 pharmacies across the United States. That's pretty much every pharmacy. We also work with pretty much every health care provider. The prescriptions that we have helped people save money on represent prescriptions written by over 2 million health care providers in the U.S. Again, our business is also highly recurring, and not just in our subscriptions offering, but more broadly. 80% of our prescription transactions are recurring ones. All of those elements working together have brought us to a point of great scale, $510 million in LTM revenue. And that's LTM revenue that's still growing fast, 47% year-over-year. And that's LTM revenue that's growing fast at high margin, 95% gross margin, 38% adjusted EBITDA margin. We believe these attributes make us absolutely unique in sort of the technology space or the technology and health care intersection, and we're extremely proud of the results we've achieved so far. With that, I'll turn back to Doug.

Thank you, Karsten. Next slide, please. So I think it doesn't -- I think we all know that, certainly over the last decade, and especially over the last year, we realize that there are many, many ways that we can improve the American health care system. And honestly, our quest at this company is we believe that there is a better way. There's a better way for Americans to be informed and educated about their health care choices, that we can use technology to create a more efficient marketplace that benefits all constituency. And that is what drives us, right? Transparency and trust are core to our platform. We want every American to know long before they consume a product or service what it's going to cost and be able to make plans and strategize around how to find affordable health care. We will always be consumer-first. I think that's what we demonstrated in the revolution we brought to this industry, was that we came to this from how can we best help the patient? And that has been the guiding force to all of our product innovations and all the things that we work on. These macro trends, as we look across, again, both COVID and beyond, drive the need for our solutions, right? Every American in 2021 is going to have to interact with the health care system to get a COVID vaccine. And that's a great opportunity for us to engage with them and show them that there are better ways and new solutions and new ways for them to stay healthy. Our first-mover advantage, again, we've been doing this for over a decade; and our partnership strategy by working with just incredible partners across the ecosystem, create a competitive moat that I could not be more proud of, and I feel is deeply strong and super valuable to us. Every transaction reinforces our value proposition. We know what's being dispensed at any pharmacy because we have all the information and we -- all the reinforcement from the consumers and providers and pharmacies and PBM partners that we have. So we understand the lay of the landscape, and we understand how to provide value to consumers, and we can continue to drive more value. And that combination of scale, high growth and profitability, again, is what drives us and what lead -- continues to extend our lead in the space. We really do believe that we can be the leading digital health care platform in the United States. It is what fires me up. It's what drives us every day. I'm surrounded by over 400 people here who are super motivated to just basically come up with a way for all Americans to get the care they need at a price they can afford, and that is what drives us. And I appreciate you guys listening to us and taking the time to hear about what we're trying to do. So maybe at this point, we'll hand it back to Doug and we can do a little for Q&A.

Great. Thank you, Doug and Karsten, great overview. Appreciate the presentation. So I have some questions for you and then we'll [ mix in ] some from the audience as well. Maybe first, just if we could kind of look back over the last year, a year that was broadly defined by COVID, generally speaking, how was GoodRx impacted? And then what does normalization mean for GoodRx in 2021?

Sure. I'll take this. And Karsten, of course, you're always welcome to jump in. And thank you, Doug. Obviously, in 2020, around March 2020, everything shut down. I think everyone knows that. No matter where you were. And a part of that is physicians' offices shut down, consumers [ stopped ] going to their house. They were trying to be safe, they were trying to make sure that they stayed healthy. And so that forced many consumers to postpone or cancel elective appointments. And we definitely -- I think everyone, to some extent, was impacted, pretty much every business in this country, by consumers simply were not out there shopping. They were not engaging in the health care system. We -- we haven't guided toward 2021, and I'm not the guy for guidance, but what I can tell you is more and more doctors are reopening. They're coming up with protocols and ways for consumers to be engaged. And I think a lot more people are getting those elective doctor appointments that they otherwise weren't. There's also room for telemedicine in here, and we obviously saw a huge spike in telemedicine way back at the beginning of the pandemic, which continues to -- some areas continue to be quite strong in telemedicine. But we believe that the world's reopening and that more and more patients are going to get back out to see those doctors and get back to sort of normal behavior. And I think most of the industry data tends to align that way. I don't know, Karsten, if you have anything to add.

No, I think that was thorough, Doug. Thank you, though.

Okay.

And Doug, you mentioned the vaccine and kind of the opportunity there that GoodRx has, obviously, just as basically everybody is trying to find a vaccine, find a location. What will be GoodRx's role here over these next several months in helping consumers?

We don't talk about it all that much in investor conferences, but we have incredible content that we publish on an ongoing basis about everything. Remember, we have unique data sets and large data sets that look at how consumers consume health care in this country. And we have just an incredible team, we call it GoodRx Research, that basically is constantly publishing content about how consumers can find affordable solutions and what the current understanding is of all sorts of conditions and issues. We are the leaders in providing information about the vaccine, everything from finding testing centers to side effects of the current vaccines, to hopefully, information about where a consumer can actually get the vaccine when it's their turn. We have incredible relationships across the ecosystem to help people get the vaccine. Just as a point of reference, we've had an ongoing program with some of the largest pharmacy chains in America to help them find flu vaccines. So you can imagine us playing a very similar role when it comes to COVID in terms of helping consumers -- and affordability won't be an issue because the vaccines are free, but getting access and finding appointments and understand which one to take and side effects are things that we're very active in participating in. And then once they're there and engaged on the vaccine, remember, people are going to be standing in doctor's offices. They're going to be standing in pharmacies. They're going to be ready to engage, and we're there for them to -- all that backlog of things that they've been wanting to talk about with the medical system for the last year, we're there to engage, help them find a better way. Especially if they may have lost their job or transferred insurance, like we are right there to guide people out of this pandemic. And that's our goal. Our goal is to be at your side and to give you the information you need. And we never -- I mean, I could not be more excited, amidst the awfulness of this pandemic, to have that position to guide consumers to a better way.

Okay. That's helpful. Let's talk about sales and marketing a little bit. It's an important part of your cost structure. The brand is, of course, very strong. You also talked about very strong NPS score as well. Just how did COVID impact your ad strategy over the last year? And how do you think about that playing out going forward?

Sure. Maybe I can handle that one, Doug. COVID has had some impact, particularly the original instance of COVID, as I'll call it, in the second quarter. I think what differentiated that version of COVID from today's is in that first version of COVID, from our perspective, a big change was that a lot of health care providers effectively discontinued or reduced their services from where they were pre-COVID. Then they reopened again, and through today, most health care providers are still available doing surgeries. I've talked to a large number of them, and it's also replicated in the data as well, the reality that this time around, things are much more open. And the reason that's so important is because folks getting new diagnoses is a big driver of new prescriptions and, of course, our business as well. So I think COVID looks different this time around, and it's in that light that I think it's best to address this question. So when we look at our advertising spend broadly, we tend to be pretty opportunistic and focus on a couple of different things. One of them is making sure it pays back in the right time frame. And one of them is making sure that we're generating the right kind of value from it in terms of lifetime value of the users we're acquiring and keeping. So during COVID, we've been extra proactive, I'd say. We've done things like, in the initial COVID, we sent less collateral to doctors' offices. This time around, that change hasn't really happened because they've stayed open. But what COVID's really done is it provided us a big opportunity to be really relevant to a lot of consumers as they focus more on health care. And it's provided a big opportunity for us to leverage our most important source of growth, which is unpaid, effectively, growth. And that comes both from word-of-mouth and referrals from consumers, but it's also coming from health care providers themselves. We do, as Doug said, a great job supporting health care providers, and they reciprocate by doing a great job supporting us. You'll find our collaterals in almost every doc's or health care providers' offices. And those collaterals are pulled by them, not pushed by us. They want good outcomes for their patients and they want to use GoodRx and recommend GoodRx in order to do that. On the unpaid side, too, we also focus very heavily on developing the best content. And that's both narrow, like content around pharmaceutical products and medications broadly, interaction, side effects, et cetera, we have extremely deep content there; and around health care more broadly. And because the content is so good and it gets cited so frequently and even referenced in policy at the federal level, it means that our content ranks very high, and GoodRx ranks very high, in search as well. So along with benefiting from all of these different unpaid sources, many of you have probably also seen Doug on TV and potentially in streaming media, too. We focus on those avenues as well. Even though unpaid is our single largest and most important source of growth, we leverage those other sources of growth, too. And we do so very aggressively but very responsibly. So we're focused on making sure we continue to generate the right kind of paybacks, as I said, and also continue to generate the right kind of margin going forward. When we talk about looking at our spending patterns, during our 3Q earnings call last fall, we also talked about the fact that we're making some incremental investments, both in marketing and products in 4Q and beyond. And the reason we said that is because, number one, a lot of folks are really thinking through their health care decisions right now, both because it's end of the year and folks are getting into new plan years and open enrollment. And again, as Doug said, most of our users have insurance. So it's very, very important that we interact with them at the time they're thinking about decision-making. And of course, first quarter is important, too, because it's when folks are entering into their plan year. So making the investments now, are investments that we expect to have pay off in continued growth at a rapid and attractive trajectory going forward as well, just as we've proven out in the past.

Okay. That's great. Okay. I know we've got about 3 to 4 minutes left. I do want to talk about, mail order has been more in focus just over the last year, naturally. And then also a little bit more recently with the launch of Amazon's pharmacy as well. Just curious, Doug, what's your view of why mail order is still only about 5% to 6% of the current market? And how do you think that will trend going forward? And does Amazon have the ability to change that?

Sure. I think this is a challenging space for people to fully understand because you would assume that, just like I get my books, I get my everything else sent to the mail to me these days, that naturally, health care should make that evolution. But there are a whole host of reasons why that's really hard, right? I want to just remind people of a few things that the average person does when they use the pharmacy. Number one is, as we just talked about, it's very hard for me to see a doctor, right, 24 to 56 days or whatever it is to see -- for a new patient to see a doctor. Well, very often, a visit to the pharmacy is like a mini doctor visit, right? And so for many Americans, like they actually enjoy going to the pharmacy because there's a chance to say, "Well, I know I picked up my prescription, but can you also take a look at this?" Or, "How do I feel the side effect to this? I've been feeling dizzy." And this is a very valuable experience for consumers that can be hard to replicate via mail. Second of all, usually, when you go pick up a prescription, you're not just getting a prescription. You're picking up a bunch of other stuff that, oh, I didn't realize I needed new shampoo and a new toothpaste and all that kind of stuff while you're there. Lastly, it's also very hard to transfer, right? Like most people I know, I can tell you my wife is a great example. The pill bottle's empty, she goes, "Oh, shoot, I'm out of my medicine." Well, to switch to mail is going to be like a 5-day exercise, even with Prime or any of those things, because you have to have a new prescription written, it has to get on the pharmacy, it has to get transferred. There's a whole variety of reasons. But it can take 5 days to 2 weeks. And remember that the PBMs also have exclusive mail contracts generally. So they can cause a lot of friction in this space. Just as one example, the Amazon Prime product, which we can talk about, doesn't actually allow you to get 90-day fills. And a huge number of people actually want 90-day fills in their prescriptions. They cannot get it through Amazon because PBMs restrict them from that. So I would like to see more mail prescriptions. And I see Amazon trying. They've been trying since 2000 when they bought Drugstore.com. They tried again when they bought PillPack. But I think that we're a long way today away from the vast majority of prescriptions moving to a mail experience from retail. I think don't underestimate the other values that consumers get out of going to a pharmacy and the enjoyment actually they get at that retail environment. I think it's much harder to disrupt than people thought at first glance. Again, we will be there to support it. We list not only -- we're partners with Amazon, you can actually use a GoodRx discount at PillPack. And we will support that. We even have a mail-order solution of our own. But we don't expect a wholesale revolution in this space any time soon. Yes. I can talk more about the rest of the Amazon program or whatever you think, Doug...

Let me -- so we've got about 20 seconds. So maybe it's a quick answer, but I would love to just hear you, what the kind of road map looks like for telehealth here, which is a fast-growing area for you.

Yes. I mean, I'm really excited about telehealth. And not in the way that I think most people -- I think a lot of people thought, oh my God, pandemic, telehealth, goodbye. No one will ever see a doctor in person again. And obviously, that's not the case. We saw a huge spike and now we've seen this sort of settling down. Most of my primary care physician friends are like, "Yes, I'm doing some telemedicine now, but I'm also doing -- a lot of people are like, thank God, doctor, I can see you again. I enjoy that doctor hands-on patient experience." Right? So I don't -- I think there are great categories for telehealth, and I think we're seeing some. I think when it comes to sort of what I call the blocking and tackling of health care, the I need to get a refill or I want to do this thing that's a low-risk thing. Dermatology, that's one great area. I love mental health, I think, both for prescribing and also for therapy, those are great categories. But I think we have to be very thoughtful and selective about where we apply telehealth and where it's going to take over the world. And GoodRx is going to be there to lead that. We have incredible telehealth services and more to come.

Okay. Great. All right. We are -- just in the interest of time, we're going to leave it there. But thank you, Doug and Karsten and Whitney. And there's a lot more to talk about. We look forward to continuing the conversation soon. Thank you. Thanks, everyone, for joining. Bye.

Thank you, guys.

Thank you.