We’ve re-invented eRx in Russia

Outpatient medicine in Russia was ~85% state-owned clinics and ~15% private sector.
Outpatient treatments were covered by compulsory health insurance, and Outpatient Rx medications were covered for limited diagnoses and a limited set of medications. Pharmacy market - 15% were insured medications, 85% retail (out of pocket) medications.

Rx prescriptions are regulated by law and must be issued on paper blanks, but, in real life, just only 3-5% of all medications were prescribed on the blanks (except state-insured medications, which were on the blanks).
There was a country-wide common practice of the acceptance of any piece of paper with the name of medication or INN by pharmacies as a legal prescription. Moreover, there was no problem buying antibiotics or other Rx without a prescription at all (excluding the list of restricted and forbidden-to-sell medications).

I created several go-to-market strategies and financial models. After thorough analysis and discussions, we decided to take a state-oriented approach—it seemed reasonable given the majority of state-owned clinics.
Our decision was not only based on our own experiences, but also on insights gained from previous projects. We learned that the traditional 'build-sale-support' approach is not the path to solving the problems we aim to address.

We needed a different model with more control and a broad range of monetization. State-Business Partnership (SBP) was successful in other sectors like construction and road works but not IT due to different reasons, including corruption, fear of IP as a capital investment, lack of knowledge, and resistance to any innovation. We decided to take a risk because we felt that was the way to implement it in the way we wanted it and under our control.
We figured out several monetization options. The first one was a subscription-based model, where pharmacies paid a monthly flat rate or by transaction.

In July 2018, I've managed to convince the Head of IT of Belgorod Region to do a PoC and try to implement our business model.
We built MVP in the next 8 months and entered the PoC project with 1 clinic and 4 pharmacies in April-May of 2019.

After 3 months of PoC, we’ve seen good traction in the prescriptions issued and app downloads. Belorod region authorities saw a lot of opportunities for patients and healthcare system, they approved further steps and initiated a tender, which one we won in September.

Our team has managed to connect 100 pharmacies and 60 clinics in one month in the Belgorod region and has taught 300 practitioners and pharmacists.
We've launched several PR and promo campaigns to draw attention to the platform and mobile app

Nearly 50% of all pharmacies were connected across the region in 3 months. Everything looked perfect from a technical point of view - all systems have been integrated and worked fine. But key indicators - eRx issued, eRx usage in pharmacies, has been less from projected targets. I've started digging - conducted meetings with practitioners, and pharmacists, gathered focus groups with patients, and figured out a list of issues.

SARS-CoV-2 caught the world's attention in three months after rollout. We've tried to adapt and help - built a new service layer and integrated it with Telemed apps and government service Gosuslugi just in one month. Service was used in two regions - in Moscow and Belgorod Districts, all patients were able to get distant doctor's consultations and prescriptions.
Invented and implemented remote approval for existing medication courses.

It was a huge help for the clinics - we learned that 30% of visits in clinics had one goal only - to extend existing prescriptions. Remote renewal helps in any pandemic or epidemic, like flu - decreasing spread by ruling out unnecessary visits. After half a year, we succeeded in persuading the healthcare authorities and we had implemented this service in the Belgorod region.

Despite the extreme volatility - we counted 30 resignations of regional heads of healthcare departments in 2020, we managed to launch PoC in 7 regions. Prepared and approved legislative documents for eRx usage in 9 regions.

Online sales and delivery of Rx medications were prohibited in Russia, despite of enormous rise of online sales of other goods. Authorities had a lot of concerns about medication transportation, safety, and illegal use because of the inability to validate prescriptions.

Our team has offered a solution based on our platform and tested it with a well-known online retailer. The eRx validation service eliminated any risk of unauthorized sale of Rx medications and provided full transaction transparency for all participants and authorities.
We allied with pharmacy chains, professional associations, and on-line retailers (Ozon, Yandex, SojuzPharma, Zdravcity, and others) and prepared all legislative documents for a PoC in several regions.

The partnership with a major player was our key objective from the beginning. Our project with nationwide scale potential required strong financial and GR support. We were looking for enterprises - insurance companies, healthcare IT, pharmaceuticals – countrywide chains, distributors, not excluding investment funds. The 20 potential investors were pitched in 8 months (November 2019 to July 2020). Most of the potential investors came from Sergey’s contacts, I have managed to attract the attention of two corporations who made us offers, in January and in August 2020. We signed a Term Sheet with Atlas Investments, a Vadim Yakunin (Protek Group, #1 Pharma distributor and largest pharmacy chain in RU) controlled company in late August and closed a deal on 24th of December 2020.

One of the potential investors, a state-owned enterprise, approached us with an investment offer in mid-February 2021. It looked like a perfect blend for us – two shareholders, both leaders in important sectors – one in B2B, the other in B2G, should give us the desired strength in GR and finance. It should have been, but it turned out as a bizarre process between corporative lawyers fighting for future gains and mitigating unrealistic risks. After 9 months of negotiations, a ton of meetings, emails, calls, the Term Sheet was approved in an 8-hour-long in person meeting with a group of lawyers and decision makers. Then I spent another 7 months in the similar process - had trying to find balanced terms for all parties about future control and risk mitigations. My focus was too bent on this process, and I began feeling like a lawyer at some point. Meanwhile, two things happened in February-March of 2022 that made a significant impact on both parties and the process:
1) The potential investor changed his negotiation team entirely, and 2) Investments froze after the 24th of February; these two events led to the deal falling apart in May 2022.
Talks with 2 other investors in May-June left us empty-handed.