Pain relievers
Genrus United is working on building large buying group
A Bible Hill-based buying group that offers relief from high drug prices is growing so fast its top execs are trying to slow things down while they raise more capital.
ABible Hill-based buying group that offers relief from high drug prices is growing so fast its top execs are trying to slow things down while they raise more capital to fuel the expansion. “We’ve raised $400,000 to start and we’re looking to raise another $1 million,” said Paul Graham, president and cofounder of Genrus United, in an interview.
The one-year-old company founded by insurance and pharmaceutical industry execs and a lawyer is taking a page from Costco’s playbook to create a membership-based buying group to negotiate lower drug prices.
“If you come together and leverage your weight, you can get a better deal,” said Graham.
In the past decade, the number of Canadians without employer health insurance plans has soared.
According to the latest figures available from Statistics Canada, roughly one in five Canadian teens and adults was without health insurance to cover part or all of their medications in 2016. That’s 5.9 million people across the country. Atlantic Canadians are doing a tiny bit better.
In this region, the comparable figure is roughly one in six – but that’s still almost 353,000 people in Atlantic Canada without that health insurance.
When these people walk into a pharmacy, they are charged more for their medications because of the lack of a big industry player to negotiate lower prices for them, says Graham.
His company is trying to fix that.
“We started up a solution, private enterprise delivering what public leadership should have and what the insurance and drug industries don’t want people to know about: That generic prescriptions, about half the drugs that all Canadians need and want, are cheap commodities and should only cost a few bucks each,” said Genrus United chairman Hugh Paton. “No need for insurance. No need for high prices.”
Officials at both Medavie Blue Cross (Atlantic Canada) and the Canadian Life and Health Insurance Association declined to comment on the startup when contacted.
Many prospective members are expected to be people who currently find the cost of their medications to be beyond their ability to pay.
According to Graham, one new member is a man in his 60s who was prescribed 17 medications for diabetes and heart disease but wasn’t taking any of them because they were too expensive. By joining Genrus United, he was able to get at least some of those drugs.
And that’s the pitch the buying group is making to pharmacists: Let us offer lower prices and you’ll get new customers who currently can’t afford their medicine.
But first, Genrus United needs to raise more equity capital.
“If someone is interested in investing $1 million, come and talk to me and you’ll get a share of the company,” said Graham. “It’ll be $2 per share and 25 per cent of the company for the million. But that’s a dance, a negotiation.”
The top exec of the federally incorporated, privatelyheld company says there are already several people who have expressed interest in investing in Genrus United when it launches its second round of financing.
Among the things the company plans to do with that money is expand into other health-care areas, including the dental and optical fields, and beef up its workforce.
“I’ve got six people here part time and I need to hire them full time,” said Graham. “And I need another five more.”