0:00

I think the long -term view, and we raised 44

0:02

million bucks, we're solving for that big of a problem. The long -term view is around setting

0:08

yourself up to a sustainable arrival to profitability

0:11

that lets you solve a significant enough problem

0:15

that affects people's healthcare more so than

0:18

it does their lifestyle. And if you can do that

0:20

well, you'll get private pairs paying attention

0:23

to you. You'll get, of course, patients paying attention to you because you're going to help

0:26

them live better. And then, of course, employers.

0:28

you know, and the path to scale for any digital

0:31

healthcare company, which is through B2B, will

0:33

also start paying attention. Hi, everyone. I'm

0:35

really excited to talk to Kareem today. I've

0:38

known Kareem for two years. I'm always impressed

0:41

by his diligent and inquisitive nature. We have

0:45

had countless discussions about healthcare. I'm

0:47

happy that I get the opportunity to share some

0:50

of them with you today. Kareem is the ex -CEO

0:54

and co -founder of MedNow. where he took MedNow

0:58

public at 150 million market cap after raising

1:01

$44 million. Thanks so much for joining me, Kareem.

1:05

Excited for this? To get started, let's dwell

1:09

a little bit into your childhood. There are things

1:11

we learned from our childhood which help us,

1:13

and there are things we have to at times unlearn

1:15

from our childhood. Just talk to me a bit about

1:18

your childhood and if you could answer the questions

1:21

I posed in that framework as well. Well, I had

1:25

a fairly I guess a child that had a lot of change

1:31

in it. I was born in Europe, and then we moved

1:36

to the Middle East, the Emirates specifically.

1:40

And I pretty much grew up there, at least until

1:44

I was about 15 before coming to Canada. And then

1:50

while I was in the Emirates, for whatever reason,

1:52

my folks They're both academics so they were

1:56

very attentive to the education that myself and

2:00

my twin sister in this case were getting. So

2:04

almost every two years we were changing schools.

2:07

So one of the notables probably about my childhood is that I never really kept a very consistent

2:11

friend throughout it. It did eventually happen

2:16

when I went to... public schooling system for

2:19

a couple years and the friends I made in that

2:22

school are people that I still know today. I

2:26

don't know anybody from my other schools that

2:29

were, you know, just, you know, the nature of

2:32

being an Emirates is if you wanted to learn English you have to go to a private school. So there's

2:35

not the same concept of a private school as you

2:37

would in North America. But yeah, anybody who

2:40

I would have went to school with in these in

2:43

that environment I I've totally lost contact

2:45

with so I don't know what that says about me

2:48

or what it means in terms of the context of education

2:51

But probably the one thing that was unique and

2:55

different between private and public was that

2:57

public schools were All boys or all girls just

3:01

by the nature of the country. And so there was

3:03

definitely a lot more of a camaraderie Aspect

3:06

to it. It was this idea that you know Boys will

3:09

be boys and things that you'd never really experience

3:12

as much in the co -ed environment that the private

3:14

schools, they're provided. And the other part

3:18

of it is I've always loved to put things together. I've always been, and it's probably what inspired

3:23

me to be an engineer. So Lego and technique and

3:26

all that stuff. Also, I did a fair bit of selling

3:32

things. So I would find random things around

3:35

the house. set them up somewhere and try to sell

3:38

them. I had my little mini garage sales, which

3:42

eventually actually played into some of my entrepreneurial

3:46

itch, if you will. I've always fancied the idea

3:50

of selling something for a markup. And so even

3:55

going through university, I had a side business

3:57

on eBay. that was of the same context, just the

4:01

idea of making a product really appealing, buying

4:04

it at a great price and then selling it at a

4:07

fantastic markup, which is a lot what you get

4:10

to do in pharmacy. So, you know, kind of a full

4:12

circle moment for me for where I landed. Do you

4:16

think entrepreneurship is innate or can it be

4:18

taught? I think there's a certain aspect of it

4:22

that's innate. And then when I say innate, it's

4:25

more in terms of where you What experiences you

4:29

had growing up such your question around childhood?

4:32

I mean again my folks were academics, so they

4:35

weren't of the entrepreneurial nature but my

4:39

grandparents were mostly in trade and so I think

4:44

some aspect of that carried over into them and

4:48

Maybe that's what I picked up in terms of the

4:51

encouraging somebody to go and again You know

4:54

entrepreneurship a big part of is around selling and having the comfort to sell things. So in

5:01

many ways, I think that I definitely picked up

5:04

from just encouragement. Yeah, that's something

5:06

you should do. I think if my folks were a little

5:09

bit more inclined to be pure academics, sort

5:13

of the traditional view of academics where just

5:17

go to school, get good grades, and that's all

5:19

you worry about. I probably would have landed

5:21

somewhere different. So that's the only aspect

5:23

of it that's innate. But the rest of it, I think, is taught in experiences, whether it's in your

5:28

home or in your friends or eventually in your

5:30

career and your work experience. We had very

5:34

similar childhoods. I was in my 17th home by

5:37

the time I graduated high school. Yeah, it was

5:42

a lot of moving around. My parents were academics

5:44

and we moved from India when I was 16. It taught

5:47

me. how to be adaptable. It taught me to be very

5:50

comfortable with change, but it did have me missing

5:55

a sense of home and a sense of grounding. Do

5:59

you find that as well? And if so, how did you find your sense of home and grounding? Yeah,

6:04

it's funny that the symmetry in our life is quite

6:09

shocking. I never knew that about you. Yeah,

6:12

I mean, I would say the grounding has become

6:16

was probably an issue when I was making the move

6:20

to Canada getting to know people here and having

6:24

friends that were in a lot of cases just also

6:26

immigrants like myself and so when I finally

6:30

made it to university I probably that's when

6:34

I was starting to feel a bit more stability in my group of friends and so forth but then you

6:39

know shortly after university I was off doing

6:41

my MBA and Kingston, Ontario, and then upon returning

6:45

from there, I was on my way back to, I was on

6:47

my way back east heading to France in this case, and I worked there for a little bit. So, yeah,

6:52

then back to Canada, but not to Toronto, to Alberta.

6:54

So there's, you know, there's always this movement in my life throughout. And so it's not only until

6:59

very recently, when I got married, and now I

7:02

have two beautiful girls, you know, five and

7:04

three, that that sense of being grounded, I actually

7:07

find it in them. And then sort of the idea of

7:12

the purpose of being a father, if you will, to

7:15

really get that sense of security, that that's

7:19

a constant. That's very difficult to change,

7:23

you know, God forbid anything would happen, but, you know, they're always gonna be there as long

7:27

as you're there. And I think that's probably

7:29

one of the ways that I really maintain that sort

7:33

of sense of groundedness. And then, you know, others, I think I'm generally spiritual, so taking

7:38

the time to be grateful for what you have and

7:42

just being content with what you got. That also creates a sense of stability and grounding that

7:47

I find quite helpful. Let's move forward in time

7:52

to starting MedNow. Talk to me about how that

7:54

idea came to you and how did you get the team

7:57

together and how did you launch the company?

8:01

So that's a very big question. I'll start with the idea and how it came to me. So after spending

8:07

some time doing home healthcare, which was specifically

8:11

around the sale of medical devices to support

8:13

patients that have a sleep disorder called sleep

8:16

apnea, and more importantly, home oxygen, which

8:20

is the therapy of oxygen supplement to patients

8:26

that normally have a condition called chronic

8:30

obstructive pulmonary disorder, COPD, and what

8:34

really The challenge there was about bringing

8:37

these medical devices or these essentially flammable

8:42

gases that are compressed in cylinders to people's

8:44

homes, in this case all over Canada, where I

8:48

work in that business so that they can continue

8:50

to live as long as they can and maintain their

8:52

activities of daily living as well as they can.

8:56

What I was able to do after that was to join

8:59

McKesson in a strategy role. So McKesson is one

9:02

of the largest wholesalers and distributors of

9:04

pharmaceuticals in the world. I came in to primarily

9:08

support all that is retail banner programs, so

9:12

what McKesson puts out to retail pharmacies in

9:15

terms of a support program that has to do with

9:18

marketing, more principally buying the generics

9:21

that they use, marketing, and all the things

9:25

that relate to operating a pharmacy profitably.

9:28

So that was one focus of mine. The other focus

9:31

was specialty pharmacy, which is expensive drugs

9:35

that require a high -touch model of care, usually

9:38

requiring an intervention of a nurse or a case

9:40

manager and delivery to home. So there was a

9:43

certain parallel from being in the home oxygen

9:46

business to being in specialty. And then finally,

9:49

I was also quite involved in M &A activities.

9:52

Around the time McKesson bought Remedies RX,

9:55

there was the shoppers divestment of their assets

9:58

when Loblaws bought them. So I was involved in

10:01

leading some of these deals into the way they

10:04

were sold, either to members, in the case of

10:06

shoppers, members of McKesson's banner, or into

10:10

the acquisition of Remedies RX, in which case

10:13

that was the moment McKesson... officially entered

10:16

being a retail pharmacy operator and competing

10:20

with their own customers of wholesale, who at

10:23

that point were always uniquely the only consumer

10:26

of their wholesale services. So that was the

10:31

exposure I had to the community pharmacy model.

10:35

And throughout I just realized, even through

10:37

the Banner programs, there was never really much

10:40

technology. Everything was still very much in

10:43

analog mode. the pharmacist and the patient would

10:47

only be able to communicate when they're together

10:49

in the pharmacy, the pharmacist on one side of

10:52

the counter and the patient on the other. And

10:54

it's when I was really inspired to think, well, there should be a way to to kind of advance this

10:58

to the mode of Amazon e -commerce, Uber dinners

11:03

and taxis and all the things that we started

11:05

taking for granted in terms of how everything is available through our phone. And even at the

11:11

time, I pitched McKesson on a an app so they

11:13

can have a long -term relationship with their

11:16

patients, or specifically that their band members

11:18

can have a relationship with their patients once they've left the pharmacy. And in the typical

11:24

large -corp notion, they liked the idea, but

11:28

they weren't willing to risk being the ones to

11:31

create it. So I decided I wanted to create it.

11:34

And that's the inspiration for MedNow. MedNow

11:36

itself didn't happen until a few years later,

11:38

two or three years later. But it was definitely

11:40

the bug and the seed that was put in my mind

11:43

at the time to recognize the opportunity there.

11:47

And what was the business model you had in mind

11:50

when developing this connection between pharmacists

11:52

and patients? So for me, it was around transforming

11:57

the pharmacy experience from being an in -person

12:00

only available on -premise and primarily in a

12:04

synchronous mode to being entirely virtual, permitting

12:10

asynchronous communication. and a real concept

12:15

of customer management in the sense of I want

12:19

to be able to see this customer throughout their

12:21

life cycle. Not just at the moment where they

12:23

pick up their drug and I'm as a pharmacist, I'm

12:26

dispensing, but from the moment they have a concern.

12:29

So MedNow had a telemedicine. function where

12:32

they would intake patients and process them to

12:36

whatever, you know, whatever the issue they might have. A pharmacy prescription would be issued.

12:41

If the patient chooses, they can fill that right

12:43

at MedNow and then there'll be sort of a full

12:47

cycle where patient gets a prescription, goes

12:50

to our pharmacies. and then gets delivered to

12:53

them the same day for free. And then beyond that,

12:56

there was the follow up that was done via text

12:59

or video calls, which is something that most

13:01

pharmacies at the time did not have the facility

13:04

to do. And even beyond in terms of refilling

13:07

or having to see your doctor again. So there's

13:09

really just sort of a life cycle extension to

13:12

any of the customers that was totally different

13:14

than the transactional mode that patients had

13:17

experienced in retail pharmacy. That was really

13:21

the collective of the MedNow supply chain extension,

13:26

if you will, I think about it as a supply chain, where it didn't terminate in the pharmacy interaction

13:33

where here's your white bag, read the instructions,

13:37

and call me if you need anything. So we really

13:39

wanted to create pharmacy as a healthcare hub.

13:43

And I think we succeeded in that, and MedNow continues today with very much the same vision,

13:47

this idea of it being more of a hub for That's

13:51

a very accessible hub compared to, say, your family doctor or your walk -in clinic to help

13:55

people navigate through what is a very complicated

13:58

journey, which is getting you health care and

14:01

a publicly funded health care system like Canada.

14:04

And how did you find your founding team? So it

14:09

was through my consulting practice that I was

14:13

essentially looking for clients. So after leaving

14:15

McKesson, I decided to go on my own and consult

14:19

in digital health. primarily around helping startups

14:22

that were targeting specialty -like medicine

14:25

or specialty -like technologies. So as an example,

14:28

I supported a company called Winterlight Labs that had developed a way to determine your cognitive

14:34

impairment from no more than 30 seconds of speech

14:37

using a neural network that was trained based

14:41

on other patients that were scored on their cognitive

14:44

impairment. It was a very natural use of AI in

14:49

this case to just train it to determine the cognitive

14:52

impairment. Because alternative was a 30 minute

14:55

sit down with a nurse where he or she would have

14:58

to test you on things like would you know what

15:00

day it is, can you read the clock, and so forth.

15:04

So my consulting practice was heavily focused

15:07

on digital health. And in my journey to find

15:10

clients, I reached out to the president of retail

15:13

pharmacy manor at McKesson and he said well you

15:17

should talk to this guy and so that was the first

15:21

time I met with Ali Rehani and his partner Philip

15:25

Campisano and you know the three of us created

15:29

at the time MedNow as an extension first to Ali

15:35

and Philip's aggregator of pharmacies and then

15:38

eventually as a standalone body where I took

15:42

over as CEO. So it was a very interesting and

15:45

organic growth because they also haven't been

15:48

owners in pharmacy and entrepreneurs of pharmacy

15:51

could see the same opportunity that I saw while

15:54

I was at McKesson, which is there needs to be

15:56

a digital aspect to pharmacy. It's kind of a

15:59

dark age just to continue to do the same thing as we were. Your undergrad was in applied sciences.

16:07

Why did you pick applied sciences and if you

16:09

had to do it all over again, would you pick something

16:11

else? That's a great question. I picked engineering

16:15

because I was very good at all things to do with

16:19

computer programming and I like to build things.

16:21

So I kind of put those two things together and I thought engineering was the way to go. I have

16:26

no regrets around taking engineering as a degree

16:28

because it definitely taught me how to be very

16:31

analytical, how to take a very large problem

16:34

and split it down to small pieces and help solve

16:37

each of them separately and bring them back into a sort of a mega solution that helps move forward.

16:42

What I probably really missed through my engineering

16:45

degree was all the time that I was trying to

16:47

figure out how EMI waves were traveling over

16:50

long power lines or you know, because computer

16:53

engineering is essentially electrical engineering

16:55

with an element of do you know how to program

16:58

microchips and you know how to program code.

17:01

That was essentially what was added on. So things

17:03

like software architecture and software engineering. There's certainly the software engineering aspect

17:08

I really enjoyed. and some aspects of programming

17:11

chips and so forth but the electrical engineering

17:14

aspect which was a sort of a primer and a principal

17:16

part of becoming an engineer was interesting

17:18

but I've never had to use that information ever

17:20

again so for those reasons I would have wanted

17:23

to use that time instead to be focusing on learning

17:25

business and entrepreneurship and startups and

17:28

getting really exposed to the world of getting

17:31

a company going and seeing it succeed or fail

17:34

and being able to do that early on So maybe if

17:38

there was a degree that was an engineer, B .Com,

17:40

blended together, I would probably want to take

17:42

that. The alternative would have been to take

17:45

a law degree, because I think I appreciate what

17:48

law can do when it's used innovatively. In the

17:53

sense of, you know, IP law is an example of law

17:56

that kind of focuses on how to sort of channel

17:59

creativity in a way where the creators get their

18:02

rights protected and, you know, can profit off

18:05

of these. you know, the genius that their ideas

18:07

are. So something like that would have also been

18:10

probably quite interesting, because it also would

18:13

have quite likely exposed me to entrepreneurship

18:15

a little bit earlier. And did you build the product

18:18

yourself or did you hire a team? We hired a team.

18:22

So by the time I was running the development

18:26

at MedNow, I had been out of programming for

18:30

10 years or so. And not that I didn't know how

18:34

to code still. But I wanted to focus my energy

18:37

more on creating what was the MVP, including

18:43

being able to expose it to market in a certain

18:45

fashion, being able to set up the infrastructure

18:49

and the transformation of what is an on -premise

18:52

pharmacy to being a virtual pharmacy, which meant

18:55

it becomes a dark pharmacy, as in no customers

18:57

really should be walking in to get their services

19:00

on one side. And on the other side, being able

19:04

to do what I call the connectivity of a pharmacy

19:09

network, right? So our pharmacies in Toronto,

19:13

in Vancouver, in Calgary, in Halifax, Winnipeg,

19:18

Montreal, will always see Rashad as the same

19:21

person, Rashad Osmani as the same person, which

19:24

is very unlike the traditional pharmacy. When

19:28

you go to a shopper's, even if you go to the

19:31

one across the street, they won't know you. to

19:34

be the same person. So they'll have to ask you

19:37

to re -register your insurance, your address, and all of the pertinent information for them

19:40

to be able to service you. And so if they can't

19:43

even figure out who you are or the fact that

19:45

you've already visited other shoppers, how could

19:47

they possibly be able to maintain that sort of life cycle view of your malady, whatever it is

19:53

you're going through, so that they can... really

19:57

manage you properly, regardless of where you are in the country. So if you're somebody who's

20:01

traveling on business, you happen to reside in

20:03

Toronto, but you have a lot of businesses in Vancouver as an example, that person would have

20:07

found in MedNow an ultimate solution because

20:10

there was no reason why they would have to re

20:13

-educate the Vancouver pharmacy on what happened

20:15

in Toronto or vice versa. So that sort of infrastructure

20:18

play in and focusing on how to get these things

20:20

to talk. And then also the accessibility of the

20:23

pharmacy being that it had to be easy enough

20:26

to call because most people call pharmacies.

20:29

The idea of texting pharmacies, as much as it

20:31

is very convenient, was not in a standard buying

20:35

habit for a pharmacy customer. They normally

20:38

would just call the pharmacy. So again, in the

20:41

same way, I had to kind of familiarize myself with what is a way to set up a call center that's

20:47

entirely virtual, that can have fall overs. So

20:51

when Toronto closes, Vancouver picks up and You

20:55

know that sort of thing or Halifax is the first

20:57

one up because they can catch customers at six in the morning in Toronto time so these are the

21:01

facilities that virtual pharmacy can give That

21:06

a retail pharmacy can't and and finally central

21:10

filling which is a principal aspect of Being

21:13

able to do a virtual only pharmacy, which is everything is delivered So logistics was always

21:18

going to be something that had to be figured

21:20

out. How do I get that? drug which if I were

21:23

to go to the pharmacy will take 15 minutes or 20 minutes to fill and be handed to me in some

21:28

acute cases like say you want an antibiotic or

21:31

something of the kind that required same day

21:35

administration basically that couldn't be that

21:40

okay you got me the prescription for an antibiotic

21:42

I'll get it to you tomorrow so the same day delivery

21:45

was a was another real logistical challenge that

21:47

I have to solve for that's why when you think

21:50

about the logistics the infrastructure, joining

21:53

pharmacies together, and all things to do with

21:56

what is a user journey that will be attractive

21:58

to a customer and marketing that user journey.

22:01

That took over most of my capacity, which necessitated

22:05

that I would have hired the development team

22:07

and even a lead to the development team so that

22:09

they can focus on making the technology work

22:13

while I kind of do all the other things that

22:15

I just listed. It sounds like you could have

22:18

done this a couple of different ways. It sounds

22:21

like what you did was a direct to consumer play,

22:23

but also a B2B play. What you could have also

22:27

done potentially, and I'm just thinking of this,

22:30

is have warehouses in a distributed fashion across

22:33

the country, but have a centralized pharmacist

22:36

or maybe three or four pharmacists to provide

22:39

the B2C. service of order creation and then fulfillment

22:44

and distribution and shipping can happen in these

22:47

decentralized warehouses. Did you think about

22:50

the two models? And then if you decided to go

22:53

on the D2C plus the B2B play, did you launch

22:57

with one pharmacy or how did you grow MedNow?

23:01

Essentially, how did you scale? Great question.

23:05

And I tell you, if I was able to do the latter,

23:09

the idea of having a small pharmacy team that

23:11

was centralized and did all the service while

23:13

the logistics were being handled in a distributed

23:16

fashion, that would have saved us a lot of grief.

23:20

The reality is in Canada, health care, as you

23:22

of course know, is provincially mandated and

23:25

funded. So that forces every health care body

23:31

which of course, as you know, to comply with

23:33

this provincial regulations. And so we wouldn't

23:38

really be able to or couldn't have a situation

23:41

where we didn't keep replicating the pharmacy teams across every province, despite it being

23:48

true that Toronto, Vancouver were probably the busiest pharmacies when we got started, but we

23:52

would have still needed to get a crew going in Halifax, another in Calgary, another in Montreal,

23:57

because that was the nature of... you know, the

24:00

provincial management of our healthcare system. You know, one of the things that we were able

24:05

to, however, do is in cases where there was a,

24:09

call it an intra -province treaty where, say,

24:12

Ontario can handle some Nova Scotia aspect of

24:17

practice of pharmacy. I'm not a pharmacist myself,

24:19

so of course, I don't want to speak to that in

24:22

any kind of detail, but the idea really is being

24:24

able to support Ontario to Nova Scotia or until

24:28

we got going, BC to Manitoba and to Alberta and

24:34

so there was just sort of the prairies and maritimes

24:38

sort of ways to get around the need to replicate

24:41

that but it was never going to be something that you could do at scale because then there was

24:46

a need to demonstrate why you're servicing in

24:49

this case a Halifax patient out of Ontario on

24:51

a regular basis. So the replication was unavoidable.

24:56

However you know things like standard of care

25:00

that was discussed across all pharmacies, what

25:03

can we do to really improve on a diabetic's care

25:06

or improve on a hypertension patient's care and

25:10

so forth. Those were definitely opportunities

25:13

that we capitalized on because we were having

25:16

so many different great minds in pharmacy. We

25:19

have probably the best pharmacy crews in Canada

25:24

because they had to make as we did the adjustment

25:27

to the pharmacy and the way pharmacy was conducted

25:29

from in -person on -premise to being virtual

25:32

and cloud. You know that transformation was also

25:35

necessary for the pharmacist and the pharmacy

25:38

staff for them now to take orders virtually and

25:41

be able to speak to sometimes some of their patients

25:43

never see them and only talk to them on the phone

25:45

or by texting them. And so you know when you

25:50

kind of put it all together that was the reason

25:53

why the advantage of central filling per province

25:58

was still giving a lot of advantages around practice

26:03

improvement, if you will. And like, let's see

26:06

how we can make this a virtual experience that's

26:09

even better than the in -person experience. From

26:13

what I've seen, there's pharmacies doing this

26:16

for specific indications like hair loss. or Botox

26:21

or ED or things like that. And it seems like

26:25

they're targeting high margin medications and

26:29

not, you know, the moxibustion antibiotics because

26:32

there's not much money to be made there. Yeah.

26:35

But you took a different route. You were trying

26:38

to service every patient, it sounds like. Was

26:43

that a decision? How did that decision come to

26:47

be? And where Because you're almost opening pharmacies,

26:52

but you're also then bringing them customers.

26:55

What was your relationship like with the pharmacies?

26:58

Were they contractors or was it a profit share

27:00

agreement? Tell me a bit more about how you decided

27:04

how to grow this from the financial capacity.

27:09

So I'll address the last question first. And

27:12

just because it's a very short answer, we owned and operated all of our pharmacies. So we didn't

27:18

want to get into a situation where we were creating

27:20

these partner pharmacies Some companies at the

27:23

time were trying to do the same thing but when

27:25

it's up happening is again because of the nature

27:27

of the regulation that that is around pharmacy,

27:31

there'll be things like, okay, well, who is liable

27:33

and responsible for that patient's care? Is it

27:36

you who has got the sort of interaction and relationship,

27:40

or is it the pharmacy that actually holds the

27:42

patient profile on their pharmacy management system? And it always is gonna be the pharmacy

27:46

that has delivered the care and the owner of

27:50

the profile. And so that pharmacy now has to

27:52

be sure that it has... everything it needs like

27:55

it knows everything it needs to know around that

27:57

patient or off that patient to avoid things like

28:00

a contraindication, dispensement or anything

28:03

that would would potentially harm that patient

28:06

because they just didn't have a direct connection

28:08

to them. So we very quickly rejected that model

28:11

and said we're gonna raise the money. I raised

28:14

44 million bucks for MedNow through private and

28:16

public rounds to be able to own build and operate

28:21

all pharmacies on our own and really do everything

28:24

in terms of a supply chain from the moment of

28:27

intake via our app or website or what have you

28:30

in terms of the prescription or the medical order

28:35

all the way to its fulfillment delivery and follow

28:38

-up. So that was key for us to really be able

28:41

to be the controllers of a full customer experience.

28:45

It was a very expensive way to do things. I think

28:50

there were definitely, there's always going to be an argument for advantages and disadvantages

28:53

to approaching it that way. Probably the only

28:57

thing I would say MedNow could have done differently

29:00

is become more regional power centers ahead of

29:05

going after the national deployment, which would

29:09

have been really, at the time, necessary because

29:13

we started really thinking about the B2B market.

29:17

So the B2B market, we started thinking about national employers who are looking to add us

29:22

on as a preferred pharmacy. They'd much rather

29:25

have a pharmacy that can service all of their

29:28

employees, regardless of where they are in Canada, than one that can only say, I can only do Ontario,

29:33

I can only do BC for now. And so, you know, you

29:36

kind of create an obligation, or at least a self

29:39

-selecting mechanism where only employers that

29:41

were just in Ontario or just in BC would sign

29:45

up to your preferred pharmacy network service.

29:49

So, you know, in retrospect, you know, sort of

29:52

hindsight 2020, as they say, our B2B market didn't

29:57

grow as quickly as we were expecting. There was,

30:01

you know, I'm kind of digressing here a little

30:04

bit, but I'll just take a minute because I think you did talk about DTC versus B2B, but. When

30:08

you think about who makes the decisions inside

30:10

of an employer around workplace health or workplace

30:15

wellness for the employees, a lot of the time

30:18

it just lands into either HR or CFO office or

30:24

the financial office because or finance office

30:27

because they're the ones paying for the service

30:29

and they're the ones actually paying for all of the drugs through the provision of these private

30:33

payer benefits. And so they are after mostly

30:38

Getting a better rate than dough rate, which

30:41

is give me something that's better on the markup

30:43

Which is usually a percentage basis that each

30:45

pharmacy charges based on who they have a relationship

30:49

with it with a payer and the dispensing fee which

30:52

is a fixed dollar amount that will change from

30:56

pharmacy to pharmacy and it's meant to to pay

30:59

for the effort of dispensements, you know above

31:03

and beyond the markup, which is where the Profit

31:06

is for a for a pharmacy and so kind of putting

31:09

it all together we We we had to convince HR and

31:16

finance that this is a great deal before convincing

31:19

them that this is actually really really good for your employees because If we can manage your

31:23

chronic disease is better if we can get to them

31:27

to be more proactive with their health care All

31:30

of that is going to lead to things like lower

31:32

disability whether it's long -term disability

31:34

or short -term disability, it'll lead to better

31:38

productivity because people are showing up to

31:40

work well and healthy. And so they're going to

31:44

probably be more productive. And then just in

31:46

general, absenteeism is one of the other measures

31:51

of productivity in the workplace. if somebody

31:54

doesn't have to leave their office to go see

31:57

a doctor and then after seeing the doctor go to the pharmacy and if that matter is requiring

32:02

them to if they have a specific drug that's not

32:04

generally available at every pharmacy they might

32:06

have to try drive a little bit longer to get

32:09

to it all of that was sorted because we were

32:11

able to do everything virtually and so you know

32:14

and we kind of were able to attack productivity

32:16

absenteeism and managing disability or at least

32:21

working on setting up a framework that would

32:24

normally affect all these things positively, you know, that is a very different thought process

32:29

than how much money am I going to save on my

32:32

benefits budget. And so eventually, and another

32:37

why that's significant is private payers already

32:40

know that drug expenditure is the most significant

32:44

line on their expense list. Drugs are the most

32:47

expensive thing that our insurer pays for. And

32:51

a lot of times it's not insured by the insurer.

32:54

it's normally paid for by the employers. So in

32:56

a lot of ways, it's not really their problem. But what they also try to do is restrict these

33:02

markups right at the point of adjudication of

33:05

the claims. They'll say, well, if you're a Sun Life member and you come to a pharmacy, regardless

33:09

of that pharmacy, we will never pay more than

33:11

this markup. We will never pay more than the dispensing fee. And so normally what happens

33:16

at the pharmacy level at that point is that the

33:18

pharmacist or the dispensing pharmacy would ask

33:20

for the difference from the patient. to pay out

33:22

of pocket and so you know in a lot of ways the

33:27

problem of cost was already isolated to a payer

33:30

to employer relationship and there wasn't much

33:34

more that we needed to do on it we were really

33:37

pushing for the fact that a virtual pharmacy is better for a patient especially when you add

33:41

things like telemedicine nutrition and supplements and all other things that met now did at the

33:45

time it does some of it today but you know at

33:48

the time in the 2020, 2021, and 2022 period,

33:52

it was a very broad service offering that had

33:55

to get scaled back a bit, just for multiple business

33:59

reasons. What would you change about Canadian

34:03

healthcare or pharmacy regulation? Well, this

34:08

is the kind of questions you get in trouble for. What would I change? I say insist on patient

34:13

choice. We're so big on patient choice. We insist

34:17

on it in every way. if it's a choice of, a lot

34:21

of times it's a choice of pharmacy. That's something

34:24

I didn't know well because I was very close to

34:26

it. And it's one of the things that we consistently

34:30

were striving and ensuring is present on our

34:33

platform. Even though we had our own telemedicine

34:37

provision on the app, we wanted to make sure

34:40

everybody understands that they don't need to go to MedNow for the prescription because that

34:45

would create a conflict of interest between the

34:47

two parties. So in the same way, patient choice

34:52

should be to allow somebody to have a different

34:56

say in which doctor they see and how they interact

34:59

with that doctor and whether they should pay

35:01

them or not. All these are choices that the patient

35:04

should have. And this idea that, well, let's

35:09

just address the pink elephant in the room. If we say, well, private pay is going to cause a

35:16

brain drain. from the public side of the healthcare

35:18

system to the private side of the healthcare system, I think that's not necessarily the consumer's

35:24

problem as much as it is the regulator's problem.

35:27

They need to put in place the measures that allow

35:31

free individuals, doctors such as yourself, to

35:36

decide where and how they want to operate and

35:41

how they integrate into the healthcare system,

35:44

the Canadian healthcare system. again, regardless

35:47

of the mechanism of how that gets managed, the

35:50

patient should have that choice. And, you know,

35:54

it's like there's one, two sides to every business

35:57

problem. There's a demand side and there's a supply side. So the demand side could be to be

36:02

a bit more free. You create a supply problem

36:05

for sure. But then that's a problem that can

36:07

also be solved, you know, whether it's in allowing

36:10

foreign doctors to be more easily entered into

36:12

the system. being more efficient with budget

36:15

on health care provincially and federally that

36:19

you can allow the supply to, in fact, increase.

36:22

Because it's not always a question of whether or not you're allowing a doctor to come in maybe

36:29

quicker than you would have prior. It's also

36:32

whether you should be able to pay that doctor.

36:35

And if you can't solve for that, which I find

36:38

hard to fathom, I'm not an expert in how that

36:42

budget would normally get split, then maybe the

36:46

private element and allowing somebody to, well,

36:48

if you can't cover that from tax revenue that's

36:52

been collected, maybe allow me as a customer

36:55

to pay for it because then I can all substitute

36:57

the loss of salary that this doctor today is

37:03

not going to be able to have because you can't afford them because your budget doesn't permit

37:06

it. And so I think patient choice give patients

37:11

the choice, both in the provider and in the fashion

37:16

that you pay that provider, whether it's with

37:18

your health card that's issued by Canada or your

37:22

province or using your wallet. I think that that

37:26

choice will eventually be difficult at the very

37:29

beginning, but as it settles and the chips settle,

37:33

you'll get a different environment where, you

37:36

know, like anything, markets are inefficient

37:38

at first. they tend towards efficiency. So we

37:42

will get to an efficiency, but it has to become

37:44

inefficient first before it becomes efficient.

37:48

You think health care should be federal? I think

37:53

from a point of right access to health care,

37:57

yes, I think it should be, especially given how

37:59

small our population is relative to others around

38:02

the world. I mean, we have another complexity

38:06

in our healthcare system, which is just the broadness

38:10

of our geographic area. I mean, if you were to

38:13

keep it provincial or even worse municipal, you

38:17

might be in a position where in the same way

38:20

that actually is already the case. Certain municipalities

38:23

today, I'll give you an example that I'm very

38:25

close to. There's a little town called Georgina

38:29

that's just north of Newmarket that has approximately

38:32

45 ,000 people living in it. On the other side

38:35

of Lake Simcoe is Orillia. which has almost about

38:39

the same level of population. Orillia has a hospital,

38:44

Georgina does not. So somebody in Georgina who

38:47

is requiring urgent care needs to travel to at

38:50

least 45 minutes down to Newmarket to get to

38:54

South Lake Regional. or over to Uxbridge to Oak

38:57

Valley Health, which is another 45 minutes. And,

39:00

you know, and what it's happening is Georgina splits the West, the people that live in Keswick

39:05

and around it go down to Newmarket and the people

39:07

that live on the East side go down to Uxbridge

39:11

and Oak Valley Health. So, you know, and that's

39:13

already in a federally managed health care system.

39:16

So I imagine if if the division of budget was

39:20

to become at, in terms of the collection of the

39:24

tax and the and the dispensing of it completely,

39:27

even at the level of municipal, it would completely

39:30

fail, because it's already failing in being democratic

39:33

and equivalent in the possibility of care for

39:38

every Canadian. It's not equivalent today. If

39:41

you were given $10 million to launch a startup

39:44

with the potential to be a unicorn today, what

39:48

would you do? It would be a supply chain. optimization

39:54

play that uses AI to shorten waiting times, connect

40:00

providers better in the healthcare space, and

40:04

make the patient experience one that's much more

40:09

coherent and cohesive with very prominent navigation

40:13

and advocacy elements that are supported using

40:17

that AI engine, where Decision support, which

40:21

is something that today AI is not allowed to

40:23

really do in terms of medical opinions, but any

40:27

decision support is better than no decision support.

40:31

I have some doctor friends that would always

40:33

tell me, like, it's not that I don't want to

40:36

see every patient. I want to see the patient

40:39

once I know what I need to know that could have

40:41

been collected by a nurse or by some other mechanism.

40:44

aka maybe a very very intelligent chatbot that

40:47

is AI powered and then I'm focusing on the aspects

40:51

that relate to what I know in my training and

40:54

my obligation to ensure this patient is getting

40:57

the best care possible also taking a lot less

41:00

time to arrive to the same conclusion therefore

41:02

allowing me to see more patients you know again

41:05

so by increasing that efficiency in the market I'd want to be able to these doctors said I did

41:10

want to have that as as an outcome versus what

41:14

it is today, which is triage is not significantly

41:18

advanced compared to 20 years ago or 30 years

41:22

ago. And so everybody is being, everybody's a

41:25

nail and all you got is a hammer that needs to

41:29

change. So that would be, I don't even think

41:31

10 million would take you very far these days,

41:34

especially if you bring in the element of AI and finding talent that can help you put it together.

41:38

But that would be my first inclination. My second

41:41

inclination would be much more simpler than that,

41:44

which is think about the source issue, which is we're not able to bring doctors into the system

41:49

because of budget constraints. How can you solve

41:51

for that? What is Canada really known for? And

41:55

the plain, simple reality is around energy. And

41:58

that being a commodity that's quite valuable

42:00

and it's in a resource -rich country like Canada,

42:04

it's something that we have that others don't. So it would be... 10 million bucks going towards

42:08

building a business that would optimize the supply

42:11

chain to allow Canada to be a better exporter

42:13

of energy. So something completely out of left

42:15

field, nothing to do with health care, but it's

42:18

about creating the revenue that this country

42:21

needs to bring up its infrastructure, to bring

42:24

up its health care, to do all of the things that

42:26

we wish our government could do today, but can't

42:29

because the only way they can do it is to increase

42:32

taxes, which they've already done, as you saw,

42:34

of course, with the capital gains tax. I think

42:37

it's really around thinking, again, it's a demand

42:40

and supply. Your demand is exceeding what you

42:42

have in terms of budget, which is the supply.

42:46

Find a way to increase the supply without alienating

42:48

your entrepreneurs and business people by raising taxes, especially on business. So that would

42:53

be probably where I'd go, actually. I think healthcare

42:56

is much more political than it needs to be in

42:59

Canada. I think there's way too many hands in

43:01

the pot. I don't think... there is a clear leader

43:06

who really can move the needle on anything so

43:09

it ends up being this never -ending negotiation

43:12

that's very time -consuming and more importantly

43:15

very money -consuming and so we we just not likely

43:20

I don't think we'll see a conclusion on that but energy and revenue to more revenue to government

43:25

I'd say that's probably got more legs The one

43:28

problem I see is healthcare delivery and healthcare

43:32

payment is decoupled in Canada. So you have Ministry

43:35

of Health, which essentially pays for all healthcare.

43:38

But then you have the hospitals fighting the

43:40

physicians, fighting the nursing homes, fighting

43:42

the retirement homes, fighting the community

43:44

centers. And when I say fighting, they are fighting

43:47

for the same pot of money. Exactly. You get these

43:50

different organizations as incentives are just

43:52

to maximize the money they get from the Ministry

43:55

of Health. And the Ministry of Health often just

43:58

gives the money to whoever has the loudest voice.

44:00

So there is providing good, efficient care is

44:04

nowhere in that equation. Optics are everything.

44:09

So one thought would be is the ministry should

44:12

be the pay rider. They should pay, but they should

44:15

also operate the facilities directly, not through

44:19

these middle men, for lack of a better word.

44:23

And what happens in this model is you get infinite

44:27

organizations fighting for that part of money. So you have a lot of primary care advocacy groups,

44:33

patient advocacy groups, because it's just one

44:36

centralized part of money. I think a much more

44:39

efficient model is the pay by the model, which

44:42

is what quesa permanente is, to an extent, in

44:46

which the person paying for health care provides

44:49

it. And then they can also skirt accountability,

44:52

because the Ministry of Health skirts accountability

44:54

constantly, because they're not the ones delivering

44:58

healthcare, and they can say, per capita, we spend enough. And it's not my problem, healthcare

45:02

isn't delivered, but it's the problem of all

45:05

these local decentralized organizations, which

45:09

makes accountability much harder because it's

45:12

distributed. There's no one vectoring. It's multiple

45:15

necks and multiple heads. Yeah. So do you think

45:18

that's by design or do you think that's just

45:21

kind of, it just happened because that's how the dominoes fell? And does that need to be,

45:26

because no one seems to be talking about that, the structure of healthcare delivery and payment.

45:34

I think it's, you know, the basis of value -based

45:38

healthcare, right? The pay -vider, Whoever is

45:42

paying for the care should also be the one who

45:46

cares the most, excuse the pun, about the outcomes

45:49

of that care, right? So I think that's kind of

45:52

the essential note around pay viders. It's I'm

45:55

creating value -based healthcare. I will only

45:58

put dollars into a healthcare system, or in this

46:01

case, let's bring it right down to the patient

46:03

level. I will only invest in this particular

46:05

patient. What I believe would produce the outcomes

46:09

that are positive and improve their life and

46:14

all of the very specific calories and other health

46:19

economics metrics that are out there and very

46:21

well studied and I myself actually took went

46:25

out of my way to understand health economics and and outcomes research just to really figure

46:30

out a little quick certificate at the University

46:33

of Washington. And what that gave me is it allowed

46:36

me actually over the span of two years to understand

46:39

how the U .S. solves for that. And so there's,

46:43

you know, what you're saying makes a lot of sense. The one thing that you need to have in Canada

46:48

to permit that model to work is to create, again,

46:52

a free market when it comes to healthcare. So

46:55

when you... Let's see how that's working out

46:57

in the US. Of course, because it's entirely a

47:01

free market there, the rich get great healthcare,

47:03

the poor don't. There's not enough of a, call

47:07

it a bottom. There's not really that safety net

47:10

that should be there to hold up all of those

47:13

people that have votes, but they're not strong

47:16

votes. They're not votes that can cause something

47:19

like the Affordable Care Act to really stand

47:23

up and create insurance that can allow every

47:26

citizen of the USA to have almost equal access

47:29

to at least urgent care, palliative care, any

47:33

of the things that we know how to solve for today.

47:37

We're not talking about people that are getting

47:40

premature organ replacements or knees and hips

47:46

and all of the fixings and really over treating

47:49

themselves because they have the money to do

47:51

so, which does exist in the US. Or we're not

47:55

talking about the other side of the spectrum where people, when COVID came, most people that

48:00

died of COVID were black and poor. That thing

48:04

has to, that had to change, but it didn't because

48:07

there, the federal concept of healthcare doesn't

48:10

exist anywhere near the strength that federal

48:12

care exists here in Canada. So if you switch back to the Canadian side, and you think about

48:18

what is a pay via model that would be instated

48:22

by federal government, you know, you can't help

48:25

but think about, of course, something that's already happening like national pharma care.

48:29

And, you know, the most recent discussion around,

48:32

say, diabetics, which is which is again a sizable,

48:35

it's actually the one, it is the most spent on

48:40

or the most expensive element of medication.

48:43

And if you look at any kind of record of what gets the most money, diabetes and diabetes drugs

48:48

are the ones that do. And so the idea of saying,

48:52

okay, National Pharmacare is now gonna make that

48:54

completely available with your health card, regardless

48:58

of where you are, but it only focused on the

49:01

drugs. It didn't think about, okay, what will

49:04

happen now as it relates to this person's life

49:08

cell modifications, their food, their exercise,

49:11

how are we going to manage to catch diabetic

49:13

feet in time, the socks, the eyes, all of the

49:17

things that a diabetic has to deal with. It's

49:21

impossible to manage that from a budget point

49:25

of view, which is... One of the things that happened

49:28

at McKesson quite often, and I had one of the

49:32

greatest bosses there, he used to be the senior

49:36

vice president of strategy there, his name is Ravi Deshpande, and he used to say this, which

49:41

I think still holds true today, it's really easy

49:44

to cut back on the prices of generics and the

49:48

general cost of drugs, because it's a clear line

49:51

item. You can't really measure time spent by

49:54

a doctor to outcomes, like from a value -based

49:57

point of view, it's much harder to do that. For

50:00

drugs, yep, too much money, we're gonna cut it

50:02

back, we're gonna cut it back, and national pharma care is gonna cause even more cutting back. However,

50:07

it still doesn't replace the fact that when a

50:09

pharmacy decides to say, then there are digital

50:12

pharmacies out there that now just do diabetes, when they need to go out of their way to say,

50:16

I'm going to hire diabetes education certified

50:19

diabetes educators, which is a designation that

50:22

a pharmacist can pursue. I'll have all of the

50:26

devices. I'll have a way for it to navigate through

50:29

all that. All that can really exist in private

50:31

enterprise. For it to exist at a public pay vital

50:35

mode, which it should ideally, that's sort of

50:39

idealistically where we should land. would require

50:41

very extensive controls put in place by the government

50:45

to permit the view of healthcare to be much more

50:49

than the cost of a drug, the cost of a doctor's

50:53

fee for an interaction with a patient. But again,

50:57

measuring the outcomes and having a view to what

51:00

is the value of that interaction or that medication,

51:04

that is very difficult to do without a much more

51:07

significant take on data, being able to really

51:10

track outcomes in a much more efficient way than we do today, which I would suggest is almost

51:15

nonexistent. There isn't very good outcomes tracking

51:18

today in Canada. I realize we're out of time.

51:23

Do you have time for one question? Yeah, absolutely.

51:26

Please. So you've raised 44 million dollars.

51:29

I think a lot of founders listening will have

51:32

lots of questions there. What is a piece of advice

51:36

you have for founders who are trying to raise

51:38

for a healthcare startup? Do things that matter.

51:43

Don't spend too much time on the fireworks. There's

51:47

a lot of things you could do with pyrotechnics

51:50

and, oh, we're going to go change the world and

51:52

do this and do that. But it's a lot of the discussion

51:55

we just had today. The problem with healthcare

51:57

is fairly simple. It's just very disconnected.

52:01

There's the total lack of navigation. people

52:04

are lost, they don't know where to go next. These

52:07

are real problems that are well documented and

52:10

you should start solving those problems before

52:12

you start thinking about all of the other lifestyle

52:16

stuff that we discussed earlier in the call, which are great because they make money. No one

52:23

is gonna live a lot, you know, well sure you

52:26

might live a better life if you get to your vagar sooner But at the same time it's not gonna necessarily

52:31

be a healthier life because you've forgotten

52:34

about all the other reasons why you might be suffering from ED in this moment, right? So I

52:39

think it's really having that holistic view of

52:41

a patient and that's what med now set out to do It's from the get -go holistic care was in

52:45

our investor pitch deck, right? So we wanted

52:49

to make sure people understood we dig, take a

52:51

generalist view of the world, which is one of

52:54

the more expensive ways to solve a problem, because

52:57

then you're trying to make room for all of the

52:59

permutations of that problem, right? Specialists,

53:03

you know, the likes of Felix, you know, when they started in lifestyle and then they're progressing

53:07

themselves to other therapeutic areas, that's

53:09

another really good approach. And I'm really glad to see them get into things like pressure,

53:14

blood pressure and cholesterol and all these

53:17

other important diseases. But The reality is

53:20

business likes money, investors like money, so they're going to focus on things that are high

53:23

margin first. Do you bring, do you nationalize

53:28

even the innovation in healthcare? I think there's

53:30

some attempts to do that with things like Mars and the Discovery District, to try and encourage

53:35

a specific kind of innovation. But at the end

53:38

of the day, I think the long -term view, and

53:41

you know, we raised 44 million bucks because we're solving for that big of a problem, but

53:44

the long -term view is around setting yourself

53:48

up to a sustainable arrival to profitability

53:50

that lets you solve a significant enough problem

53:54

that affects people's health care more so than

53:57

it does their lifestyle and if you can do that

53:59

well you'll get private pairs paying attention

54:02

to you you'll get of course patients paying attention

54:04

to you because you're going to help them live better and then of course employers and you know,

54:08

and the path to scale for any digital healthcare

54:11

company, which is through B2B, will also start

54:13

paying attention. But it's a long road and you

54:16

need to be ready for it. Stay focused and just

54:19

stay on task because it's very easy to burn up

54:22

our runway if you get distracted by too many

54:25

shiny balls. And, you know, we've all been there,

54:28

if you will. So that would be it. And, you know,

54:31

I wish them all the best of luck. We could use all the help we can for Canadian healthcare.

54:34

There's so much to repair and fix. Well, thanks

54:37

so much, Kareem. This has been amazing. Thanks,