PlanetRx

» see planetrx.com as it lived, on the wayback machine

~ the goodbye ~

PlanetRx solved a problem I have never had. In Turkey the pharmacy is downstairs, or around the corner, and the one thing it has never been is far away. A website that mails you your prescription is answering a question about distance that American suburbs ask and Ankara does not, which is why this whole category of company looked strange from here even when it was being described as inevitable.

The company was assembled in the late nineties in South San Francisco and brought in William Razzouk as chief executive in september 1998, a man whose main credential was thirteen years at Federal Express. That hire describes the business better than any of the marketing did. The pharmacy part was regulated and slow and genuinely difficult, but the part being sold to investors was a shipping operation with a prescription attached to it.

It went public in october 1999, during the window when going public was itself the plan, and the shares traded around twenty-five dollars in the days afterward. Within a year it had cut its workforce roughly in half and moved the entire company to Memphis. That was not a retreat so much as an admission. Memphis is where the FedEx hub is, and overnight delivery was the only piece of the promise that had ever reliably worked.

~ the chronicle ~

~ the decline ~

The problem with selling drugs on the web in 1999 was that nobody had asked for it. A prescription is not an impulse purchase, and the pharmacy is not a place people are trying to avoid going. Insurance made it worse in the specific way American insurance makes everything worse: the plan decides where a prescription gets filled, and a startup website was rarely on the approved list, so the customer PlanetRx had just spent money acquiring often could not use it.

So it burned enormous amounts of cash buying people who already had a perfectly good pharmacy two minutes from their front door. In january 2001 the stock closed under a dollar for long enough that Nasdaq began delisting it, and the company did not fight the delisting, which is the corporate equivalent of not returning the call.

~ the day it died ~

On 12 february 2001 it announced that it would stop accepting new prescriptions immediately. Refills were handled until 26 february. The online store closed on 12 march, with somewhere between 160 and 170 employees still on the books and more layoffs coming at the distribution center nobody needed anymore.

Customers were pointed at Drugstore.com in Bellevue, the direct rival that had survived, and the referral was voluntary in the narrow sense that health records only moved if the patient asked for them to move. What was supposed to remain was a specialty pharmacy business, the expensive long-term medications that genuinely do get delivered. The board approved a liquidation of the assets instead, the Memphis distribution center included.

~ the long tail ~

Drugstore.com ran until 2016, when Walgreens bought it and switched it off, so the winner of that fight bought itself fifteen extra years and then got the same ending. The underlying idea was not wrong either. Mail-order pharmacy is entirely ordinary in the United States now, and it is run by the insurers and the drugstore chains, which is to say by the incumbents PlanetRx existed to route around.

That is the usual shape of these. The startup was early and the incumbent was slow, and the incumbent still won, because the thing being sold was never really the website. It was the licensing and the relationship with whoever actually pays the bill, and a company holding a good domain name and a FedEx contract had neither.

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