A new startup born out of Pioneer Square Labs in Seattle wants to help independent workers — including those who don’t have medical insurance — save money at the pharmacy.
Otis is targeting freelance and part-time workers with a digital discount card. The company also acts as a price aggregator, helping people find the lowest cost for medication purchased at pharmacies.
Otis is led by CEO Steve Moses, a former senior product manager at Amazon Pharmacy.
“I realized how much discrepancy there was with pricing, and how it was very difficult for a patient to get a sense of how much medication costs,” Moses said of his time at Amazon Pharmacy, the tech giant’s pharmacy arm born out of its acquisition of PillPack.
Otis members sign up for free and get their card via text message. They show the card to a pharmacist and get discounts up to 90% off the out-of-pocket retail price.
Otis generates revenue by charging pharmacies one set fee for every medication. That sets it apart from traditional players such as pharmacy benefit managers, Moses said.
“We want to give more savings back to the customer by taking less for ourselves and having one simple transaction fee that’s not based on the dollar amount the patient pays,” he said. “We’re not incentivized to drive up that price or to maximize their payment.”
The company is betting that it can use lower fees but make up the difference by attracting more users. Moses called it a “very lean margin model.”
There are similar discount or coupons offered by various digital health companies such as Amazon Pharmacy and GoodRx.
Other newer players are aiming to lower medication costs for consumers, such as Mark Cuban’s Cost Plus Drugs.
Moses said he doesn’t consider companies such as Amazon and Cost Plus as competitors.
“We could potentially service them when they’re cheapest for our customers,” he said.
Moses joined the Pioneer Square Labs startup studio as an entrepreneur-in-residence about a year ago. Prior to that he was vice president of product at a San Francisco startup called Sempre Health that also helps people save money on prescriptions.
Otis is hoping to capitalize on the growing market of freelance “gig workers” and other contractors who pay for medications out-of-pocket.
“They’re massively underserved,” Moses said. “They’re paying way too much because they don’t have access to transparency and discounted prices.”
Otis is partnering with companies that use freelancers such as Airtasker to help attract more customers.
The company is also led by CTO Aaron Bach, former engineering leader at Four Winds Interactive and FIS, along with Luke Nilles, head of growth who previously consulted for Microsoft and founded a growth marketing startup called Wivisor.
Otis raised an undisclosed pre-seed round from Pioneer Square Labs.
