Move Fast, Break Things, and Solve Problems | Ezriel Green, Founder/CEO at EzriRx

Speech to text:

Mike: Ezriel, for those who haven't come across you online, introduce yourself and tell our listeners what we're talking about today.

Ezriel Green: I'm Ezriel Green. I'm the founder and CEO of EzriRx.com. We're a technology company for pharmacies and we do a multitude of things, but primarily we're in the business of saving pharmacies time and money. In the general world, you have AI, cryptocurrency, and so many new technologies that have been making life better behind the scenes for people, and yet when you go back to the pharma industry, the business of pharmacy is still booming but not in the really simplistic ways of doing things. So we are in that space of trying to make life for pharmacies much easier by saving them time and money.

Mike: When I look at your marketing or when I see your company pop up, one thing that comes to mind more is the product. I'm seeing capsules and things like that. Is that a good thing for me to think of you that way? Or is that too small and your company would rather be thought of as broader and the product is part of that? Is that taboo on my part?

Ezriel Green: So you're asking a pretty good question. It's actually not taboo. We started with the capsule concept. The general core of the business was that there are many wholesalers scattered all across the U.S. These are secondary wholesalers that sell pills, capsules, and tabs. There are 25 pharmacies. The traditional marketing methods of these drug wholesalers were that they would sit and call on pharmacies all day. They would send them emails and try to get the business from them. Now we tried to create a simple process where pharmacies could come online, search for over 70,000 different products, find the best deal from these 30 different wholesalers, and purchase them for the cheapest and best price possible. That was the initial thing we did. Once we started developing this process, we started noticing that there are so many simple things that could happen behind the scenes which would make life a lot easier for pharmacies. Things like filling out customer applications. Purchasing from 30 different wholesalers means that you have to spend time filling out 30 individual applications. We thought, "Wait, there's e-signature out there. Let's just make it super simple." Then came the next step: when pharmacies have to pay for purchases, if they're buying from 30 different drug wholesalers, they have to sign 30 different checks every month. They have to get 30 different invoices. They have to get 300 different packing slips. And we thought, "Wait, these days you have Amazon where you can pay for a whole bunch of different orders super simplistically. So why can't we bring that technology back here?" Then we went one step further. We know that when you call a wholesaler, you could try to get a better price. We thought, "Wait, eBay's best offer feature has the ability to make an offer on a product and get a better price. Why can't we bring the same thing here?" So we started with this initial idea of capsules and how to get the best price for pills to the pharmacy. Then we just took that idea and pushed it further to try to give pharmacies the easiest way of shopping and saving them an enormous amount of time.

Mike: When I think of Amazon still and you listen to Bezos talking about his vision and so on. The average consumer buys from them because of good product choice. Yeah. Why wouldn't I go to Amazon? The more elite consumer and maybe someone who runs a business knows that they're spending kinds of time with the one-button order. And should it go from left to right or right to left? And when you do this, should it be two buttons or one button? That kind of thing. So they're a really good computer company that sells products, but the average person kind of sees products coming out of there and doesn't realize the immense thought that goes behind why you're really on there versus somebody else.

Ezriel Green: That's actually a very interesting point. There's a lot of user experience and user interface thought that goes into every step and process when building a web company. And you're 100 percent correct. Most people don't realize that Amazon spent an enormous amount of time A/B and split testing. Every button, every color, every single little word that they place on a site—how it's going to convert—and they test it amongst millions of users every single day. And sometimes you could be in California and you see a new feature pop up, and that same feature's not going to be in New York simply because they're testing it with a certain user base and then they roll it out to everyone in the country. We did the same thing. We basically started off with a pretty basic design, a pretty basic function, and then we started testing. We said, "Okay, if we switch this header and change it this way, is it going to make life easier for pharmacies? And is it going to make the process easier for pharmacies to search and buy?" One very simple thing that we did is that when you're searching for products, you have the ability to search for NDC. You have the ability to form those strength pack size. Most pharmacies are used to putting in LIDO 3544, comma, whatever it is. We basically had it so that if you put in LIDO, every single possible strength just comes up right away for you. And then it starts learning what this pharmacy is searching for frequently and how to make those results come up faster for them so that we can cache those results and therefore not have to rerun every single search function again and again. So the searching ability is super simple with us versus other platforms that exist out there.

Mike: I picture your stuff and mine on a miniature scale. It kind of makes me think sometimes I want to tell the listener, "I want to market my podcast as the length is always going to be roughly the same. I'm not coming out with a five-minute one and an hour one. The sound is always going to be good with no echo. I'm going to get to the point of the show within a minute. I cut out stories that don't go anywhere. I don't start off the podcast asking somebody where they went to grade school on up through pharmacy school." That kind of thing. I kind of want to sometimes shout that out but I realize that what I think is cool on my side, why I know I may be picking up some listeners, maybe wouldn't go over too well on people. They don't even really think about the things and maybe don't even care but it's maybe raising—they might see my show over somebody else and just have that feeling of something is there but I can't really tell them it's there. And your stuff too. Sometimes the consumer may not even know why they want to go to EzriRx or some other program. You just have to trust that what you're doing is fruitful for the subconscious.

Ezriel Green: There's this great book by Professor Adam Grant who's a psychologist for businesses. And he has this book called "Think Again." "Think Again" basically says that you constantly have to take everything that you know for certain, the facts that you know for certain, and rethink them. You have to be a scientist in that matter. And not only do we tell it to ourselves, we hope the pharmacies do the exact same thing as well. While yes, we built it and then we went back and we went back and we went back and reiterated and made it better and better. Our goal is to have the same thing done for pharmacies. We also try to tell them, "You know your business. You know that you currently have your GCR spend that you have to stay within." What we try to do is take that model and essentially say, "Wait, that model only exists in the Rx industry. It doesn't exist anywhere else. You don't have Amazon telling you that you have to buy from one source and we're going to dictate what spend you could do outside of Amazon." There's a free market over there that happens. And you're not capped with how much someone's going to charge for a product and how much you're going to get paid for the product. You can buy it for a dollar, sell it for one if you like, or sell it for ten if you like. The architecture is the only place where that happens. So that mindset of how we innovate, we try to pass on to the pharmacies: "Hey guys, we understand that you're going through one of the most tumultuous times in the industry where you're getting hit with negative reimbursements, you're getting hit with the DIR fees, you have the DIR fee apocalypse, you have so many issues that are happening to you. Now is the time where you gotta do two things. You gotta rethink the same way we constantly rethink, try to bring that back into your business. Rethink everything that's happening in your business. And second, start doubling down not on your losses, start doubling down on your winnings." Just going back to the Amazon analogy is that Amazon has the returns business, for example. And we all know that they're super easy with the returns business and they'll just take it back. But you never see Amazon focusing on it. What they'll do is that all they do is they take all the returns, they'll put it onto a pallet and they'll sell it by weight. Why? Because Amazon is not focused on that. Amazon is focused on their winnings and they go back and they start doubling down as though we're making money. That's AWS, that's on the prime memberships, that's on the stuff that actually makes them money and that's where they focus. And that's something which we try to have like those two thoughts: "We're going to try to innovate as best as we can. And we're essentially going to try to do the same thing and have you do the same thing." Also, try to find those nuggets that are earning you money and see how that could turn into more profit for you.

Mike: Our listeners have heard me complain about this but I take somebody like McDonald's, who've been around forever, billions and billions served. I don't discredit them for making new products and doing different things. I went into a McDonald's, this is years ago, and I went and I stood at the counter for 20 seconds. No one said hello. I waited another 20 seconds. Nobody says hello. I'm just there to get a damn cup of coffee. And my head is thinking of all these new drive-through things and the push button, all this kind of stuff and all their marketing and all that. In the meantime, not being served their bread and butter. I'm going up and I want a fast food cup of coffee and it's not coming my way. So I think some companies, as you're saying, they make something and they go on to the next thing. It may even not be a moneymaker but they got the entrepreneurial spirit and they want to challenge and all that kind of stuff. In the meantime, their bread and butter is suffering for the next company that comes along and says we're focusing just on that.

Ezriel Green: There's actually one other very interesting thing. I actually heard Jeff Bezos speaking about this. He said that he set a KPI in his business unit that customer support has to be answered within a minute or something like that. So they had a 60-second bar for how quickly customer support messages have to be answered. And he said that suddenly he started hearing feedback from outside saying, "Wait, customer service is lagging. And it's taking longer and customers are on hold for seven minutes." He brought it back to his weekly meeting and said, "Hey guys, we're getting complaints on the customer support side that people aren't answering their phones for seven, eight minutes. But our reporting is telling us that it's working fine. What is happening here?" And what he did is that he sat in the board meeting, picked up a phone, and said, "I'm calling the main Amazon phone number." And he realized that it was actually eight minutes of him waiting online and he was like, "Wait, there's a disconnect here."

Mike: Yeah.

Ezriel Green: What we did was correct in the first place, and we set even a KPI for it, but we never went down to double-check that KPI and see if what we did was correct in the first place. He went back, reset the entire process, and got it back down to under 60 seconds of answer time. But that's a way of thinking. The same thing in our business too is that I think that every pharmacy has to do this: you have to sit down once every 30 days and you have to basically go through different business strategies or structures. You have to take a look at your own business and instead of working in the business, you start working on the business. Think about, "Okay, I'm going to take an investor's view of this business and I'm going to start taking a look at how many new scripts should I be processing? How many refills did I take care of today? How do I do better? Where's my profit coming from? Where are my losses coming from?" One basic example of how a pharmacy could simply innovate that's not related to EzriRx at all is to stop taking a look at profit per patient. Take a look at profit per family. And if you see that the entire family is losing you money, you should just basically tell them to go to a chain. Tell them to go to a larger chain. On the other hand, if you feel like one of your patients is losing you money, look at the family and perhaps there's someone else in the family that's actually being fairly profitable and then keep that patient. A lot of pharmacies are not doing that. They're basically just taking a look at their list of customers. They're not doing the 80-20 rule and basically saying, "Okay, most of my money is coming from 20%. How can I take a look at my 80 percent and see what's happening and what I'm doing wrong? Let's take a look at that and see how we can innovate on it."

Mike: I have a cottage 30 miles away and there's an ice cream shop on the way. It might be a health food store. I think it's ice cream. So on the way up there, I see all these people standing in line and in my head I'm calculating, "Okay, it's so hot out. I know what time of day it is." And I see these people in line. Well, that's self-limiting. I'm not going to go stand in line. I'm going to drive on by but then the owner. The next day he's saying, "Oh, it was perfect. We got everybody their ice cream in time. The line only waited this long. We had this many sales," and so on. But are they taking into account the people that went right by because they weren't being waited on quickly enough or at least in their mind they weren't going to be? And I don't think you pick up on some of that stuff until you really see it. Do your homework on that to see if the KPIs are really indicating what reality is because it's easy to lose track of reality as you mentioned there about Amazon.

Ezriel Green: That's a really valid point. When it comes to pharmacy, the customers outside of the business versus in the business or the people that are waiting in line, I recently traveled to a different country and I was trying to buy a train ticket to go from Kyoto to Tokyo. One of the things that I noticed was that the line was just endless. It was just endless in order to speak to a customer service representative. And suddenly this person, one of the women who was working behind the counter, came out and started going over to every person and saying, "Hey. What do you actually need? Do you need a new ticket?" Just to translate that to pharmacy, it's "Do you need a refill? Are you looking for just simple advice?" She started delegating super quickly, "Okay, you're going to wait for this person to help you. You're going to wait for this person to help you. Here's something simple I could just pull from the shelf and give to you. And here's something simple that I could do." Before she did that, everyone in the line was seriously frustrated and I saw people dipping out of the line and saying, "I'm going to look for an alternative and see what I can do better." This one intuitive person came out and basically said, "Wait, this line is way too long. People are getting frustrated. How can I make things a lot faster and a lot simpler?" Just to make that analogy go back to the EzriRx system. Something which we did is that we started noticing that the time it takes for a pharmacy to sign up to EzriRx and put in their NPI, their DEA, their PIC, their primary address, the phone number, their tax ID, and the expiration dates for their licenses was taking us literally 8 minutes or 9 minutes for someone to do. We started asking ourselves, "How do we quicken the pace of every one of these steps?" Through technology, we got it down to under 2 minutes. All a pharmacy has to do in order to sign up to EzriRx is enter their NCPDP number and their zip code and we'll already have all the information pre-filled. It takes under two minutes to sign up. Then we innovated even further and we started saying, "Okay, what's the next bottleneck that a pharmacy has to deal with?" We noticed that there are 30 plus drug wholesalers listed on the site and they have to fill out 30 different applications. We asked, "How do we simplify this process?" We started doing two different things. The first thing we did is that we took the same information they used for the signup process and filled out those applications already with the information we had. Then we addressed each wholesaler's unique questionnaire. We asked all the possible questions that any wholesaler could have and pre-filled all that information onto the applications. All the pharmacies had to do was scribble the signature and send it off to the wholesaler. We iterated on the process, identifying business bottlenecks and simplifying the steps to make it easier for the pharmacies and users. Now, it's 60 seconds from when a pharmacy comes on the site until they have their licenses uploaded. They can fill out the first application and place an order usually within 30 minutes.

Mike: And the thing is you don't know what's going to grab the customer. It's a subconscious mix. You got me thinking now of I shouldn't really be on this fast-food topic, but when I'm sitting at McDonald's, this is years ago, I don't do it as much anymore, but at McDonald's, I'm thinking I kind of want an apple pie or an ice cream. But I look at the line and there are 10 people in line. I thought why don't they do what the grocery stores do of either 10 items or less? What it would be is a dessert line. So you go up and you're in the dessert line and there's a special person there for desserts because they'd sell a lot more because I don't have to go through that full line again. Your point about making things easy. There's this company that has this service and I'm interested in the service but to use the service I have to leave my email and get a price quote. It's like no, I mean I signed up for enough SAS programs and handheld things. And I want to see something. If you have 10 to 20 of this it's this price and 20 to 30 and it's like why would you have to quote me? Especially if you're a computer company, why do you have to quote me something live? I know why of course. It's all the things I don't want to do. I don't want the phone calls. I don't want them being nice to me and following up and all that stuff. I just don't want it. The easier the better.

Ezriel Green: You're literally pointing in the exact direction of what the premise of EzriRx was initially. I literally walked into a pharmacy in 2016 and I saw this massive stack of papers on the counter. And I asked the pharmacist, "What is this massive stack of papers that you have?" He picks one up and says, "This is a flyer for products." I looked at him and said, "What?" I was like, the wholesalers are faxing you stuff? I was blown away. And I said, "This makes no sense. Is there no simple way for you to search for the drugs online?" He basically tells me, "Not that I know of." Turns out that there were systems and solutions out there for you to do a very quick price comparison. I said, "What is this big pack you have?" He said, "Well, these are the invoices from every wholesaler." I said, "Wait, every wholesaler is invoicing you for every purchase you make? This is going to take you forever. You want to get a better price, so you went into the secondary market. Now all you did is you just cost yourself more time, so you're losing out on that again. This has to stop." That's where we built in the online payments. You can literally come online onto EzriRx. You can add a credit card, add your bank account through ACH, and every wholesaler will allocate a line of credit to you on the site itself. So while you're purchasing, it moves from green to yellow to red. It will take care of the payments for you automatically. Six months after I did that, I walked back into the pharmacy and saw that the pile was cut in half. I thought, that's where it is. That's the key to how I just made life simpler and how we just made life simpler for so many pharmacies out there. In order to really save them time and money. It's not just the price comparison. It's by saving them the time it takes to do the external processes which are super cumbersome. If you help them do that, then they'll have time to deal with their patients. And literally going to be saving lives just by doing something really stupid on the front end. That's how our wheels work. How to make things better for pharmacies is that we speak to them, hear them, and see. There's a quote from Henry Ford that says, "If I had asked people what they wanted, they would have said a faster horse." When we asked pharmacies initially what they wanted, they said they would love to have better pricing, help with their GCR, and get a better rebate. I thought, "Wait, you're going to try to get a better discount, but who says those numbers make sense? Who says you're not overspending on your generics to get a higher discount on your brands? Who said that the math will necessarily work out if you go from a 6 percent GCR brand discount to 4 percent?" We've been able to prove it time and time again to pharmacies that it just doesn't. It doesn't. You're fighting for a higher brand discount when there's generic deflation. Essentially what's happening is you're overspending on your generics that you're not going to use, which will go to waste, just for the illusion that the extra percentages you're going to get on the back end will make you more money, and that's wrong.

Mike: It's just crazy and you alluded to this Ezriel. Let's just take some rough numbers. Let's say that a pharmacy is 5 million a year. If you went to a car dealership and you had 5 million and you were going to buy let's say 150,000 cars from a dealership and think of going in there. There's a clown in there and they're saying spin the wheel. And if you do this and fill out this many clip cards, we're going to get you a free CD. You would never think about that at those kinds of numbers. That might be a number on a used car lot, one car every five years. But when you're buying a hundred cars a year from somebody in the world, would a company make you play those games? It just seems somebody can rise up above that. And I'm glad you're talking sense.

Ezriel Green: For some reason, when it comes to the pharmacy world, whoever created this was really smart, somehow telling pharmacies that if you sign up to a GCR model and the more you spend on your generics, the higher the discount you're going to get on your brands. And we're going to lock you into a 90/10 contract where you're only allowed to spend 10 percent outside of your contract. Genius and crazy at the same time. And pharmacies unfortunately have to subscribe to this model and it doesn't afford them the freedom of shopping smartly. A lot of what we do is tell these pharmacies that quite frankly the only way to survive in the current market is if you shop secondary. I don't know if there's a single way for a pharmacy to survive these days strictly going with the primary model. It just doesn't work. Sometimes we see pricing that on a primary contract, a certain NDC will cost you 100, and on the secondary market, it's going for 20. You can't tell me that there's any rebate that will make sense for you to buy that from your primary versus the secondary. It makes no sense at all. I don't care what contract you have. It's worth it to break it for that particular drug. Pharmacies are getting killed on the rebates. They really are and it is terrible. Sometimes you can always say businesses need loss leaders. Loss leaders are only when you're doing it with an extremely small percentage. When the largest percentage of your scripts are just being lost on, it makes no sense. It's the only industry where someone is telling you, "Here's the max reimbursement you can get for certain drugs." Since when can I buy something for a dollar and sell it for a hundred? I technically should be able to here. Instead, you have to buy it for a dollar and only get paid 80 cents. We constantly try to tell pharmacies that yes, this industry is beating you up enough. Start looking elsewhere because there are pharmacies that are focusing on the golden nuggets. They are focusing on the items that are making them profit. Just one example is what other prescriptions could a patient use based on the condition they have? How much more can I profit from an individual patient? Get them to do the refill or get them to speak to the doctor and see if they can use another type of medication. I spend 20 minutes a day doing that? Very simple task. The pharmacies that are doing that are profiting a lot more than the other pharmacies. Those are the ones that are thriving and not only surviving. Lots of what we try to tell EzriRx pharmacies is that there is technology out there to let you find those golden nuggets and double down on them. How do you make more money on those? In conjunction with you working on seeing what other scripts this person can get, you tie that into a better cost of goods and now you'll start seeing yourself being profitable over and over. Similar to the Amazon analogy, don't just focus on the returns. Every business will have returns and those are the stuff we just have to spend ten minutes a day on. Mostly go back to the stuff you're super profitable on and double down on those. Double down on those NDCs and try to find more patients for them. Try to find other NDCs that this particular patient can use and see how you can make more money from those.

Mike: Just for the record and my listeners know this well, but I got out of the whole damn rat race about five years ago on the brand names. We just don't care anymore. I've never signed a primary contract. I think they were just getting more popular as ours was running out and so on. Here's the other one I would do, Ezriel. My rep would come in the door and I'd get a big bottle of ibuprofen 800, the heaviest bottle I could find. I'd set it down and shake the counter. I'd say, "Hey, so and so, tell me how much I paid for that." Thinking again about the 100 cars at a car dealership and saying to them, "How much did I pay for that car?" and them not being able to say, "Well, here's what you paid for it." My rep, they start stammering and stuttering, "We don't really know yet because we don't know this and this," and it's just a game I'm glad I'm out of.

Ezriel Green: Yes, we unfortunately know one too many pharmacies that are still stuck in that game. Some of them have to. We fully understand that some pharmacies are serving certain areas and demographics where you don't have the chains that you could just pony off the brands to and fill it elsewhere. Some of them have to take care of their patients and they are stuck with needing to get a decent brand discount to service their customers. But we even show those pharmacies how to get their brands not that cheap but in the long run cheaper than buying more generics just to get that discount. That's where the difference happens when you're using a site like EzriRx to do your purchasing. We'll constantly innovate on the contracts you have and on your current methods of purchasing. Just going back to your contract, there is a long-term care pharmacy we just started working with. We literally showed them how they could save $50,000 a month. After their rebates, after their discounts, after their brands, everything, $50,000 a month. We were like, "That's a pretty decent savings a year that you can put towards something else in your pharmacy." Thankfully they made an instant switch to us and said, "Let's start using EzriRx and let's double down on that." But those conversations are hard to have. The pharmacies that are having them are ultimately winning in the long run.

Mike: Back in the day when the reps would spend more time in the pharmacies from the primaries, they'd be in there for an hour shooting the breeze and things like that. Does that still exist? I've been out of the game for a while now. Does that still exist where somebody doesn't want to hurt the feelings of their sales rep? I know that sounds odd, but back in the day when everything was about even, I was a sucker for the good salesmen who made me feel good and that kind of stuff. But I knew I was talking not a whole lot of money between the two. They were all pretty similar. Nowadays, how much success are the primary reps having with that relationship to make people feel guilty to do something or is it all just numbers?

Ezriel Green: Drug wholesalers we work with told me that when they got into the industry in the 1980s or early nineties, they said it was relationship-based. If the wholesaler didn't have a drug for three days, the pharmacy would wait for it. Just going back to our initial conversation, the market has changed. The market has changed from the consumer market. No consumer is waiting for a drug for three days for it to come back in stock. Similarly, the pharmacies are not waiting either. The conversation reps usually have now is, "Hey, you missed your GCR target. You missed this target and we're going to cut you off." The conversation changed from "Hey, how is your family doing?" to "We're going to have a hard conversation about your buying habits and see how we could fix that." Pharmacies get scared because no one wants to be cut off from a contract they have because they know they need particular drugs that only the primaries have. We can't knock the primary models; they are there to serve the community and the pharmacies that need particular drugs. We're just telling pharmacies that you can't only rely on that contract. You can't rely on that primary model. You need to think smarter, think different, think again.

Mike: Alright, so you walk into this pharmacy and look at their pile of papers. What was it to you? Were you interested in that? Were you part of the world of pharmacy? Why did you even look at this and say, "I can fix this?"

Ezriel Green: So that's actually pretty interesting. I was a tech kid always. I started off in the business world when I was probably 17 or 18 years old, right out of high school. I always loved building websites. I always loved building software where there is a niche that had to be filled, where there was a problem to be solved. When I walked into the pharmacy, it was actually my own neighborhood pharmacist. It was a mom-and-pop pharmacy that was there for my family for years and I had a good relationship with him. I was in the business of building websites and I understood how the technology worked. I asked a simple question and as an entrepreneur, my head started turning and I thought, "What is going on here? How do we make it easier?" I asked really simple, stupid questions. It wasn't because I particularly wanted to go into the pharmacy industry. It just so happened that I was playing in the medical supply field, in the diabetic tester field. I got to know pharmacies, I got to know how the wholesale business worked, and then I walked into a pharmacy and this challenge happened. I thought, "If I were in your shoes, what would I have done differently? How can I innovate in that regard?" It's not the same way that most people get into the industry. They'll usually start off as a rep and then they'll become a manager and then they'll start a company or work in a different field. I came from the entrepreneur's journey of how do I fill a need for a community, especially a community that is there to help people and save lives. That proved itself during COVID. I got my vaccines from a pharmacy, a local pharmacy. When I needed masks, I got them from my pharmacy. I wasn't doing anything different. I started realizing that while everyone was hunkered down at home, the pharmacist was putting on a mask and actually there for the community. I thought, "That's why I chose that industry. That's why I chose working with pharmacists and pharmacies." They were the first responders. People don't give enough credit to them. Instead, all we hear is the steady bombardment of DIR fees and negative reimbursements. That's what keeps me up at night. I'm not here for myself anymore; I'm here for the thousands of pharmacies on EzriRx that are struggling. The message I get is, "Hey man, just letting you know that you just saved my pharmacy $36 on this script, $47 on this drug, and $140 on this item. That's why I'm able to service my patients tomorrow. That's why I'm able to stay open tomorrow. Because you literally made those extra five to ten a month, because you started looking for better pricing and switched that model in your head." Just by us working on those little nuances and bringing a community of pharmacies together. One of the things we did just as a side note is we built something called group deals. Group deals was usually when you go to a wholesaler and try to negotiate, the thing that makes the biggest difference in price is if you take a larger quantity. I thought, "We have 6,000 pharmacies here all buying as a collective. Why not join them all together?" We'll go directly to a wholesaler or drug manufacturer and try to get a better price for it. No matter if one pharmacy takes one, six, nine, or twelve, as long as we're taking together a massive bunch of products, we should be able to move the needle. The first product we did was the lidocaine patches. Lidocaine patches are a product that pharmacies use a lot. We literally got the price cut in half. Pharmacies did not have to commit to a massive quantity. It was the collective of pharmacies that all worked together to get the product. The better pricing for everyone else. When everyone worked together, it helped everyone.

Mike: Getting the nuts and bolts of that out of curiosity. Was that a promise to buy them over a certain time or did they actually put the order in to get that bigger quantity?

Ezriel Green: They all put together in within 72 hours. Everyone committed and committed to six pieces, two pieces, three pieces, nine pieces, eleven pieces. All the pharmacies came together. The wholesalers ultimately want to push more product and they know they could go to the manufacturers and get a much better price if they get the volume. The thing is that no one's willing to get a better price for a pharmacy that just needs two or six or twelve. One other thing we just did for larger pharmacies is that the pharmacies that have multiple locations usually have a single buyer who has to connect to a wholesaler separately and say, "Hey, I'm looking for six pieces for this store and six pieces for this store." We built in allocation features so that one main pharmacy could put in an offer price for multiple locations at once, join the quantity, get a higher volume, and get a better price from the wholesaler. We literally launched this last week and so far, the few chain pharmacies that have been using it have been saving a lot. Instead of them sticking to the single volume that each location has to take, they now have the collective volume. For wholesalers, it makes sense because they were pricing out each individual store separately and shipping it in six different boxes. Now they know it's all going to the same ownership. They would have given a better price because they're taking a larger volume. That helps them too. We built it out for them and it's been working really well so far. To give credit to the wholesalers we work with, there is no disparaging, there is no price difference between the East Coast and West Coast, and there is no price difference between larger pharmacies and smaller pharmacies. The only difference we'll make is if you take a larger quantity from a wholesaler or not.

Mike: With my wholesale talk, I'm referencing more the big three crying tears when they come into your store. My dad used to do that. We'd be at lunch with the wholesalers, one of the big three. We'd be talking to them and we had a good relationship with them. Whenever they started talking about their thin margins, my dad would reach over, grab a napkin, pull his glasses off, and dab his fake tears like he was crying for them. I have no sympathy for those guys. They've got the vertical integration of all the things behind the scenes along with a PSAO that's supposed to be saving us money when in fact I think they just want to make as many sales as they can to keep us in business buying stuff. They don't care about our profit as long as we're still on the corner.

Ezriel Green: It's a very harsh reality. That's all I can say. It's a very harsh reality and that's why we constantly tell pharmacies, "You need to innovate. You have to think outside of the box." There are pharmacies that are thriving. Those pharmacies have moved on from the traditional purchasing they've done and that the industry has been constantly going. What are they doing differently? At the end of the day, something I saw recently is that I'm actually going to pull it out to get the correct numbers of what the lobbying efforts are. Just to put it into perspective, the lobbying spent in 2023: AHIP spent $13.6 million in 2023. CVS Health spent $11.75 million. PCMA spent $15.44 million. Cigna spent $10.42 million. In 2023, CPA spent $1.4 million in comparison. That's a drop in the bucket. They're Goliaths. We have to be the Davids. We just have to figure out that you won the battle, we're going to try to win the war. We're going to try to figure out how we can find profits. There's one thing people always discount: what the independent pharmacy has is the relationship with the patient. They have the ability to know the patient by first name, know what issues they have, offer a local delivery, and be the shoulder to cry on for many patients that the chains can't do. They have the retail location which is X amount of square feet in their area, in their neighborhood. You could try to see what different things you could do out of that location that will essentially be profitable. It's rather unfortunate what's happening with the negative reimbursements. That's why we tell pharmacies to always go back to the golden nuggets.

Mike: When you realized you might take a trip down this road of helping pharmacies with your realization and web programming, was there anybody standing in the way with threats like, "You won't be able to do this because you're not this," or "You're too small for this," and so on? I'm thinking of people who said that maybe your competitors, and the information they were saying was not true. They were trying to scare you away from rising up.

Ezriel Green: That's a very unique question and I actually wasn't planning on speaking about this, but the first year, this is going back to 2016, maybe early 2017, when we had just launched EzriRx. I have to preface this by saying I did get an apology years later. One of the players in the industry came to me, put his hand on my chest, and basically said, "You're trying to fight a fight that you're never going to be able to win. You are just a little guy and you're never going to succeed." I said, "That's the key difference that you don't know. Every time you do that to me, I'm going to try to rise above it. Because if you're doing it to me, you're doing it to thousands of other pharmacies on a day-to-day basis. This is not how the industry in general will succeed. Being the good fighter in scenarios, being the person that's there to champion and help, will be hurtful initially but in the long run, it's going to end up making a big difference in their lives and they're going to champion for you instead." That's really what happened. We had zero pharmacies and zero wholesalers. We started with one wholesaler and one pharmacy, then ten pharmacies, then twenty pharmacies, then three wholesalers, five wholesalers, seven wholesalers. People asked us, "How are you getting these wholesalers? Why are pharmacies coming to you over someone else?" We said, "Because we're here for the individual pharmacist whose pocket is burning. We're here for the wholesaler who says, 'I have the ability to get pharmacies good pricing but they're constantly going back to their primary.' We want to fix that." Hopefully, eventually, we'll work with the primaries and have them join the good fight and hopefully start giving pharmacies the pricing they need, where it makes sense, and switching it. I don't think the primaries are necessarily the bad people. They're being killed by the margins they have to work with and they're also dealing with brands they're purchasing at very little off WAC. They still have to ship controls, OTC, and HBA. They're dealing with generic deflation as well. The biggest enemy here is the PBM. That's something we always have to revert back to. At the end of the day, the ones controlling the narrative are not the manufacturers, which so many consumers out there believe are the bad people in the industry. It's not the manufacturer. It's not the wholesaler. It's the PBM which is controlling and doing nothing for the industry and ultimately making the biggest pool of money that anyone has possibly ever seen.

Mike: One thing we did when we dropped our three major wholesalers was fight like hell to find over-the-counter products because it seemed like the major three, nobody else was in it. I'm thinking that maybe it's a pain in the ass and they're just doing it to keep pharmacies happy. What don't I know about the industry? A bottle of Robitussin or buying a Tylenol, generic or brand name, something like that. What does that do for wholesalers? Am I correct that the big three do it kind of because they have to and nobody else wants to deal with it?

Ezriel Green: That's actually a very good question. The big three buy with consortiums. You have the Walgreens Boots Alliance, which is AmerisourceBergen, Boots, and Walgreens buying together. They've recently divested, but for the longest time, they negotiated with the manufacturer together. McKesson and Walmart buy together. CVS and Cardinal buy together. So they're the ones negotiating directly with the drug manufacturers to get better pricing. The pricing is not happening on each particular word. It's usually done with forecasting of how the usage will be. For a primary to be a primary, they have to have five different categories of product. They have to have brands, generics, OTC, HBA, and controls. They have to have those five categories to be named by the pharmacy gods that they're a major wholesaler.

Mike: I think even legally.

Ezriel Green: To say they're major, they have to always ensure that if there's a pandemic or epidemic or something like that, they can always get the medications needed across the board to the pharmacies and hospitals they have to service.

Mike: That's interesting.

Ezriel Green: Now when it comes to the distribution of it, here's how they distribute. The big three go ahead and put it in totes. They basically fill it up in a little tote and you'll see that your pharmacy is sitting in a little plastic crate they have. They'll get the stuff there. The secondaries have an issue that they can't distribute those products because a shampoo will weigh the box too much. They can't ship it. A sippy cup won't work in a big box when you're shipping it with medications. For the big three, it's simple. They take a big crate, put in a GLP-1, a gabapentin, a shampoo, a Tylenol, and something else, and send it to the customer because it's coming in a van to the local pharmacy. For a secondary wholesaler, it's too hard. The margins are simply not there on those types of items.

Mike: Hard as in mainly too expensive to send that way?

Ezriel Green: Too expensive. It's bulky and too expensive for them. I wouldn't even call OTC the problem. HBA is where the trick becomes. We have full lines of OTCs on the site, but they have the same brand impact. The same issue they have when buying a pharmaceutical brand, when buying a generic brand, when buying an OTC brand, they have the same price constraints. When you're trying to buy Tylenol or Motrin, the manufacturer will upcharge you because they have the name and the ability to upcharge. The major three have the same issue when buying major brands from major drug manufacturers. They're not buying it at 50 percent off WAC and selling it to you at WAC. They have much slimmer margins than people think. The same issue translates from brand Rx to brand OTC.

Mike: I'm picturing a four-pack of Depends or shampoo in big bottles. You can't do that. Of course, Amazon is still trying. They're losing money on a ton of stuff but to raise their market share and all that kind of stuff. They're having the same struggles. I'm sure it's just that they commit to it and do it.

Ezriel Green: That's what I tell pharmacies. Directly buy it on Amazon. There are certain credit cards, like the Amazon credit card, which offers you 5 percent cashback. If you buy it in volume, you can get it cheaper. A lot of times, if you can't find it from your primary, just buy it on Amazon. It works out. You can get it cheaper than what you can get from your primary. Just don't let it affect your GCR. Buy it on Amazon.

Mike: We don't sell medical equipment anymore but we were having that issue where the wholesalers probably didn't want to deal with it themselves. So we were buying a transport chair. The wholesaler had it for 150 bucks. We'd buy it on Amazon for 109 at our price. It would be cheaper than the wholesaler. So we'd get stuff like that. Typically we could practically sell it for less than if we bought it from the wholesaler.

Ezriel Green: That's the process of thinking again. It's finding those little nuggets and doubling down on them. Finding the stuff that should be working but isn't. Trust the process. Don't just trust the process.

Mike: We get some of our OTC generics from this bigger generic house. They're pretty much branded with this company but if we run out, one of our guys has a Walmart account. We'll call up Walmart and get six ointments or something and Walmart will deliver it to us in a couple of hours from the store in town. You gotta do what you gotta do.

Ezriel Green: Yes, you definitely have to do what you gotta do. You have to figure out how to be innovative in times of struggle. The pharmacies that have been using EzriRx have acknowledged the fact that they're like, "Where were you the last five years?" That's the common question we always get. "Why haven't we heard of you before?" We tell them, "Because every time we called you, you just hung up the phone." I get it. I get it. They're like, "We thought you were a wholesaler. We thought you were a drug wholesaler." We're not a wholesaler. We're here to help pharmacies. That's one of the reasons I try to come on these podcasts. I'm not the best podcaster and I have a hard time passing on my thoughts, but so many pharmacies don't know what EzriRx is. They think we're just a regular marketplace or a drug wholesaler or a manufacturer. We are none of that. We're a technology-driven, pharmacy-first marketplace platform that's not just here to save you on your cost of goods. We're here to save you on your time, which will result in significant profit. It's going to take you from surviving to thriving.

Mike: What other things have you already mentioned, some things that didn't work in getting the word out. What kind of things help in getting the word out in terms of whether it's phone, weekend conventions, and the list goes on and on. What things do you guys do? What does work?

Ezriel Green: The thing that has so far been results-driven is when we took a look at the numbers it was proven that pharmacies referring other pharmacies result in the highest amount of purchases. Not necessarily just a signup that doesn't buy. It's the pharmacies that buy and heard from other pharmacies that have been saving. It's very unique in that nature. To get a pharmacy to change their methods and processes is fairly difficult. Pharmacies are hung up on the issues they have and it's very understandable. They have struggles they constantly deal with. They have to deal with inventory reconciliations. They have to ensure they get their checks in time. They have to deal with refills, calling patients, dealing with patients, and sitting on the phone with them. For some reason, word of mouth is helping us more than any conference. It's been really cool to see that the pharmacies that join EzriRx kind of become a family instead of just another user. We have a WhatsApp group and a Telegram group where pharmacies that use us constantly communicate. We answer a lot of good questions. It's not just the pharmacy in the New York area dealing with the pharmacy in California. Lots of stuff that works for a pharmacy in New York will work for a pharmacy in California. Lots of stuff that works for a pharmacy in California won't necessarily work in New York but will work in New Jersey and Texas. The social camaraderie they have between themselves is really great and something that has helped us in our growth.

Mike: How could someone do something better than you at this point? In your wildest dreams, what could put you in a lower position than another company?

Ezriel Green: I usually try to mirror two different people. I try to think of how Elon Musk would think of certain things, that he'll just open-source it. If it's a good thing for the world and it's a good thing for the pharmacy business, I don't care if someone does it better. You're dealing with thousands of pharmacists that have families and kids and want to earn and strive. If someone does it better, then by all means. I'll move on to the second thing. What are we doing wrong? It's very easy for you to be Blackberry and be so hung up on the keyboard that you're not innovating as fast as Apple will build the iPhone, right? You could be Craigslist and not be as innovative as Amazon in really taking that entire process and moving it further. We constantly have to take a hard look at ourselves and say, "What can we do better? What can we make easier for pharmacies? Why is that person beating us at the game?" Hats off to them. What steps do we have to take to make this process easier and better for pharmacies so we can continue winning? It's never about, "Oh, someone's doing it better than us, and therefore we have to lick our wounds." No, we just buckle down, push the pedal to the metal, and say, "Let's figure out what they did." That's what we did in the general industry. We took what Amazon has, what eBay has, what Groupon has, and brought it to the pharmacy world. When someone does something better than us, good for them. We're going to learn what they're doing and do it better. Let's just 10X it, make it that much better, and build a moat around what we have so we could be light years ahead. Unfortunately, when we started, we had a lot more ideas of what we wanted to do but we were held back by the industry constraints. We built our site initially being completely API-based because that's where we thought the industry was. We realized everyone is EDI-based and we had to teach ourselves legacy code to bring it backwards.

Mike: What technology is going to latch on? Obviously, there's a bunch of things that Apple came out with, then Newton and all that, that didn't catch on. One thing I notice is we have Google TV and I know they're all like this probably, but Google now you press a button and you talk into it, "I want to show on such and such." I'm lost when that thing breaks and I don't do a whole lot of voice stuff. I voice type, I do some voice stuff on my phone, but I can just as easily do voice stuff. Put my thumb on a couple of things. When my voice can't press a button and talk into my TV at night, I have to pull up the square diagram and do it with my thumb. The kids can do that fast but I'm lost on that. Just an example of something you don't know what's going to catch on. It might've been one of a hundred ideas but things move on and you have to do it. Some are failures and some catch on, some don't, and so on.

Ezriel Green: There are so many things we did thinking this was going to be a no-brainer. This is what pharmacies are going to use. And it just doesn't work, but that's how business works. You go to any trade show and see thousands of new products. If you're not fast in the innovation space, moving and breaking things, and then the stuff that works, you set up a team, dedicate yourself to it, build it, and grow it. The stuff that doesn't work, move on from that. Forget how painful it was to build and join the team that's working on something that does work until we come up with a new project for you to focus on. Thankfully, I think the biggest hurdle for us is educating pharmacies on the new stuff we come out with because we're so feature-rich that a lot of pharmacies are used to, "Okay, I'm getting the best price, move on."

Mike: My wife always says I'm too cynical, but I think by the nature of the pharmacist, we're the tech Musk. They clap when their rocket explodes because they know they're one step closer. Pharmacists, by nature of our job, and rightfully so, a lot of times we're focused on the negative. As long as something is not negative, as long as it's not an error or somebody didn't write something wrong, it's a success. We have a natural repulsion of negativeness, of failure, where companies like yourself are the opposite of that.

Ezriel Green: I would never blame a pharmacist. Just imagine every morning you wake up and get a smack. That's how you wake up. You can't blame a pharmacist for going through that mindset. We try to do the best job we can to make their life simpler. In the hopes that if there's ever a day they can look back and say, "Here's how much we saved using the system. Here's how much it made our life better. Here's how simple and we're thankful for the person that did that." It's worth it. Something I always tell my team: if you don't hear from a pharmacy, you know you did a good job.

Mike: Golly, Ezriel, that was fun to learn about that stuff. I think you put it best early on when you said from Henry Ford about people wanting faster horses. Thank you for taking the lead on that for the profession in those areas. It's a pleasure talking to you. I look forward to seeing what you guys continue to do.

Ezriel Green: Thank you for inviting me onto the show. It's been a real pleasure. I didn't think the conversation would go into so many interesting places, but it's been such a pleasure. It really has been. Thank you.

Mike: You've been listening to the Business of Pharmacy podcast with me, your host Mike Koelzer. Please subscribe for all future episodes.