For HealthCare.com's prescription drug savings card, should we emphasize wider pharmacy network coverage or negotiate deeper discounts with a more limited set of pharmacies?

Introduction

The trade-off we're considering for HealthCare.com's prescription drug savings card is whether to emphasize wider pharmacy network coverage or negotiate deeper discounts with a more limited set of pharmacies. This decision is crucial for the product's success and user adoption. I'll analyze this trade-off by examining the product context, identifying key metrics, designing an experiment, and providing a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• Based on the current market landscape, I'm thinking our primary competition might be GoodRx or SingleCare. Could you provide more context on our main competitors and how our current market share compares?

Why it matters: Helps understand our competitive positioning and informs our strategy. Expected answer: We're a smaller player compared to GoodRx, with about 15% market share. Impact on approach: Would influence whether we prioritize rapid growth or focus on specific niches.

• Considering our business model, I assume we generate revenue through pharmacy partnerships. Is this correct, and are there any other significant revenue streams we should consider?

Why it matters: Clarifies how different strategies might impact our bottom line. Expected answer: Primarily pharmacy partnerships, with some additional revenue from data insights. Impact on approach: Would help balance user value with business sustainability in our decision.

• Regarding user behavior, I'm curious about our current user retention rates. Do we see users consistently using our card, or is usage more sporadic?

Why it matters: Indicates whether we need to focus more on acquisition or retention. Expected answer: Retention is lower than desired, with many users only using the card once or twice. Impact on approach: Might lean towards deeper discounts if it improves retention.

• From a technical standpoint, how flexible is our current platform in terms of managing different pharmacy networks and discount structures?

Why it matters: Determines the feasibility and timeline of implementing changes. Expected answer: The platform is relatively flexible but would require some development work for major changes. Impact on approach: Could influence the timeline and phasing of our strategy implementation.

• Considering resource allocation, do we have dedicated teams for pharmacy relationship management and negotiations?

Why it matters: Affects our ability to effectively manage different network strategies. Expected answer: We have a small team that could be expanded if needed. Impact on approach: Might impact the feasibility of managing a larger network vs. deeper partnerships.