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Four years ago, Eric Kinariwala woke up with a throbbing headache from a sinus infection. So he did what most New Yorkers do. He called his doctor, got a prescription for a Z-Pak, and walked to the Duane Reade near his apartment on the Lower East Side.
When he got there, the elevator to the basement pharmacy was broken, and 40 people were in line ahead of him, he said. After waiting for an hour, the pharmacist told him they were out of stock. His phone had died, so he couldn’t ask his doctor to send the prescription elsewhere. “It was so miserable,” said Mr. Kinariwala, 36, who left the drugstore that day without antibiotics. “I’m a pinball in the middle of this thing.”
Shortly after this experience, Mr. Kinariwala, who has a background in finance, introduced Capsule, an app-based service that delivers same-day medicine throughout all five boroughs. Since it started in 2016, Capsule has grown to 260 employees, most of whom work at the company’s headquarters in Midtown Manhattan.
The company works with 31 pharmacists who verify prescriptions and field customer phone calls, which range from concerns about a lost birth control pill to frequent urination. Though Capsule is designed to be mobile-first, it has a storefront pharmacy in Chelsea, which stocks 5,100 different medications and uses technology to track inventory. They receive deliveries from wholesale suppliers several times a day.
Drugstore chains have been considered an aesthetic scourge on the city for decades. In a 1999 Times article about Duane Reade’s takeover of the city, New Yorkers called the pharmacy’s expansion a “plague” and “insane.” Duane Reade currently has 126 stores in Manhattan alone, including locations owned by Walgreens, which purchased Duane Reade in 2010 and has started to spread its own tentacles. Walgreens currently has 88 locations across the city, including its Rite-Aid-owned stores. CVS has 150.
But if delivery services like Capsule continue to expand, Mr. Kinariwala said that chain pharmacies in New York might succumb to technology in a similar way that Barnes & Noble and Borders were pushed aside by Amazon or the taxi industry has been challenged by Uber and Lyft.
“I think you’ll see,” Mr. Kinariwala said, “in every industry, people that don’t serve the consumer don’t deserve to exist. New York is all about faster, better, stronger.”
Linda V. Green, a professor of health care management at the Columbia Business School, is skeptical of that claim. “I think it’s not obvious that a stand-alone pharmacy prescription service is going to make big inroads, particularly in a metropolitan area where you have a Duane Reade on every other street corner,” she said. “The idea of delivering prescriptions is actually old. It’s not clear to me what problem they’re solving here.”
Capsule is not the first pharmacy to offer delivery and app services. C.O. Bigelow, a family-owned pharmacy in the West Village that dates to 1838, has a delivery driver, a messenger and an app. Unsurprisingly, Ian Ginsberg, the owner, isn’t impressed by Capsule. “They’re not doing anything we haven’t done for 100 years,” he said. “All they’ve done is taken the human element out of it. They’re trying to scale as fast as possible.”
Deliveries, he suggested, can also be dangerous. “Patients don’t have a face-to-face opportunity with the pharmacist so there could be subpar education regarding the medication,” said Arash Dabestani, the senior director of pharmacy at N.Y.U. Langone Health.
Walgreens declined to comment but noted that they also deliver same-day in the city for a fee. And it takes two weeks for the first package from PillPack, a national pharmacy and subsidiary of Amazon, to arrive. “PillPack is a mail order pharmacy. It’s a totally different thing,” Mr. Kinariwala said. “I think of the competition as people who continue to tolerate a bad pharmacy experience.” PillPack did not respond to a request for comment.
Even though several independent pharmacies in New York offer deliveries, they might not have the means to do so outside of their own neighborhoods. C.O. Bigelow charges $13 to deliver beyond its surrounding area, which is from the Battery to Chelsea. Another pharmacy, Apotheco, with two locations in Midtown, delivers within a 50-mile radius, but patients outside Manhattan have to call early in the morning to secure a same-day arrival.
“I would say everyone has been quite slow in delivering,” said Mr. Dabestani, of N.Y.U. He does not think delivery is an appropriate option for those on serious medications who need to be counseled in person. “The model should be patient-specific,” he said.
“New York is a great market for Capsule because it is such a dense city,” said Paul Hudson, the chief investment officer at Glade Brook Capital, which has invested in the company, along with Thrive Capital, the venture capital firm founded by Josh Kushner, Jared Kushner’s brother. “There’s a lot of dual-income households,” Mr. Hudson added, “and the pharmacy experience in New York really hasn’t been modernized as far as infrastructure and tech in a long time.”
Dr. Seth Finkelstein, an obstetrician-gynecologist in Manhattan who has become frustrated with traditional pharmacies, has been suggesting Capsule to his patients. “Every time a patient calls me telling me a prescription can’t be filled, or I have to call insurance for preauthorization, that’s my time or my staff’s time, and that’s money and time diverted to taking care of other people,” he said. “The pharmacy should be taking care of this.”
Capsule’s “insurance specialists,” who help doctors with preauthorizations, are better at dealing with insurance companies than the pharmacists at chain stores, Dr. Finkelstein said. (Although he added that the process is not perfect; sometimes confused Capsule specialists call his office for guidance.)
Merlin Chowkwanyun, a professor at Columbia, was drawn to the service after losing his cool waiting in a CVS line for 30 minutes.
He found, however, that the deliveries often arrived late. And one time, Capsule dropped off the wrong generic brand of a migraine medication he had requested.
For some people, it’s still much easier to run into one of the hundreds of chain drugstores across the city than to wait two hours or more for a delivery. “If I wake up with a sty in my eye, I can walk two blocks and pick up a prescription,” said Ms. Green, the health care management professor. “This is all about convenience, and there’s already a lot of other ways in which these things have become convenient.”
But in the age of Seamless and Amazon Prime Now, Mr. Kinariwala seems up to the challenge. He said that he wants to see Capsule become the “flip of Duane Reade” within five years. “It’s everywhere and everyone knows about it and uses it,” he said. “But everyone loves it.”