The CEO of $111 million birth control startup Nurx told us how she's charting a new path forward after a scorching New York Times expose
- Health startup Nurx sells birth control and other prescriptions online.
- Last month, a searing New York Times investigation broke apart the company's culture and practices.
- The Times found that Nurx had taken shortcuts to grow more quickly, at the expense of patient care. (Nurx denies that patient safety was ever at risk, and says that examples cited in the Times story didn't make the context clear enough.)
- Varsha Rao, Nurx's new CEO, spoke with Business Insider about how she's charting a path forward for the $111 million startup through expansions and a new leadership team.
- Visit Business Insider's homepage for more stories.
Last month, Varsha Rao started as the CEO of the trendy health-tech startup Nurx, which sells prescription drugs online.
About 10 days later, a searing New York Times exposé dismantled the company's culture and practices.
Nurx's offerings include birth control pills, which are prescribed by doctors and then delivered to your door. Founded by two men and launched in 2014, the startup quickly became a darling of Silicon Valley. It has raised nearly $42 million from investors like Kleiner Perkins and is valued at about $111 million, according to PitchBook.
The Times investigation was based on interviews with former employees, with the company's former medical director telling the newspaper that Nurx's mentality was "Don't ask for permission - ask for forgiveness later." Reporters Tess Riski, Natasha Singer and Katie Thomas found that the company had cut corners in favor of growing quickly, and that patient care suffered in the process.
Silicon Valley's tech companies are notorious for an attitude of "move fast and break things." As new tech companies charge into healthcare, where peoples' health and safety hang in the balance, the limits of that culture could become apparent.
After men's health company Hims relaxed guidelines for generic Viagra prescribed online, concerns were raised among its doctor partners, we reported earlier this year. Microbiome-testing company uBiome was raided by the FBI last month, and sources told Business Insider that the startup had cut corners, including on its science.
Nurx CEO Rao spoke with Business Insider last week by phone about the high-profile Times exposé, which came as a blow to Nurx's reputation, and her strategy for moving past it, which includes expanding into new states and adding additional products to Nurx's offerings. The company also has a team of new hires with deep healthcare backgrounds.
"Every company makes a few missteps along the way in terms of handling growth," Rao said. "The companies that really survive and thrive are the ones that learn from it and keep moving."
Read more: uBiome's founder repeatedly presented herself as years younger than she was, in the latest sign of trouble at the embattled $600 million poop-testing startup
Stumbles at Nurx
Asked about the Times story, Nurx said that it has never sacrificed patient safety for growth. But the startup didn't deny specific facts in the story, instead saying that examples cited by the Times didn't make important context clear enough.
For instance, a birth control policy that Nurx executives reportedly tried to influence in a riskier direction was not changed, as the Times article noted. That was a conversation around offering one pill versus another pill, and was not a business decision, said Jessica Horwitz, who's been Nurx's VP of clinical services since 2017.
The Times also reported that returned medications were held in a "closet full of birth control" and then shipped out to new, different customers. Nurx acknowledged that but said it happened very rarely and the practice ended nearly a year ago, a response that was included in the article.
Those findings came out of Nurx's internal investigation into the matter, Rao said. It was unclear how long the investigation lasted and what its outcome was, and Nurx told Business Insider that it would not provide any additional comment on it. Nurx said that there had not been any inquiries from regulators about the Times story.
A Times spokesperson said in a statement that "we are confident in the accuracy of our reporting, which was based on interviews with eight former Nurx employees about the company's practices."
'This was a response to a company that was growing'
Rao, whose nearly 30-year career in the business world spans industries like e-commerce and mobile, first got involved with Nurx more than three years ago.
At the time, she had been working as Airbnb's head of global operations. Introduced to Nurx by a friend, Rao said she was drawn to its mission of providing affordable and convenient access to meds like birth control.
Rao, who holds an MBA from Harvard Business School, met with Nurx's founders, and later came on as a small investor and then as an angel investor.
Experience scaling big organizations like Airbnb, paired with a year as COO of startup Clover Health, which works in the highly-regulated health insurance market, influenced her deepening involvement with Nurx this year, she told Business Insider. She took over from Hans Gangeskar, a co-founder of Nurx who is on the board.
"I think the board felt it was time to take on a new phase, from a leadership perspective," Rao said. Patient satisfaction and Nurx's high net promoter score, which measures customer relationships, "gave me a ton of confidence that what the company was doing here was something I wanted to be a part of."
Over the last year, Nurx hired experienced leaders from the worlds of regulatory compliance as well as customer experience. They include:
- Dave Fong, a former top pharmacy executive at Safeway and former member of the California State Board of Pharmacy. He started in October as vice president of pharmacy.
- Lina Brenner, formerly a SVP of regulatory affairs and compliance at giant drug distributor McKesson. She's now a legal SVP.
- Chief Operating Officer Jonathan Czaja, formerly of Stitch Fix, who started in September.
- Robert Gash, a onetime Amazon manager who's now Nurx's VP of engineering and research.
As part of a next phase of growth, Nurx also plans product and state expansions
Nurx has another new hire in a crucial role: Dr. Kim Boyd, a Stanford-trained physician who worked at primary-care practice One Medical for many years, including two years as medical director.
Boyd, who Nurx poached from a primary care startup called Galileo, just started as Nurx's new medical director. She oversees a network of medical providers as well as the company's guidelines for doctors. More hires are also in the works at Nurx, including a CFO.
The startup also has expansions in store for the year. Nurx currently sells birth control, emergency contraception, medication to prevent HIV, and HPV screening tests in 25 states and the District of Columbia.
Next up is at-home testing for sexually-transmitted infections like gonorrhea and chlamydia. If patients test positive, Nurx can treat them for certain infections, and will refer them for in-person care for others.
Nurx plans to accept health insurance for those at-home tests, as it does for its other products.
The move is in keeping with Nurx's vision of helping people with sensitive healthcare needs, and was one of the first decisions Rao helped focus the team on, she said. The CDC found last year that there have been steep increases in sexually-transmitted diseases, with 2.3 million diagnosed in 2017, she noted.
Nurx is also building out its own in-house pharmacy. That's a capability that distinguishes the company from some other companies in the health-tech space, though it also works with other partners and will continue to do so.
One particular focus of the Times investigation was how a quick-moving startup was improperly handling medical decisions. While speaking with Business Insider, Rao and Horwitz consistently emphasized that Nurx's medical decision-making is done by medical experts.
Still, Rao said there's a push to treat customers and get them their medications quickly.
"All of this ties into continuing to offer both safe and timely service. We're four to five times faster than folks in the space. We think that's really important," Rao said. "That will continue to be a focus."
"We can offer services within a day and it can take some folks within five to 10 days to respond and get to patients. And we just think that's too long," she added.
- Read more:
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