GoodRx, a company best known for its price transparency tools, snapped up RxSaver, a startup that gives users discounts on prescription medicines for a cool $50 million, Bloomberg first reported.

"You know, the RxSaver acquisition allows us to extend our reach and prescription transactions by adding a small consumer base and a brand that's known and resonates with a subset of consumers. The company has a talented team and knows the prescription transaction space well. We think they'll be highly complementary to GoodRx," Karsten Voermann, GoodRx's chief financial officer, said during the earnings call.

RxSaver has some similar functions to GoodRx. Users are able to search for prescription drugs and compare prices at local pharmacies. The site also offers free coupons to bring to a pharmacy. According to the company's webpage, the savings can be up to 85% off.

Prior to the sale, Vericast Corp owned RxSaver, and sold after a drop-in business, according to Bloomberg.

Yesterday the company held its Q1 earnings call, and reported first-quarter revenue growth of 20% year-over-year, to $160.4 million, slightly missing its expectations. The company did beat its EPS by $0.02 and reported growing its subscription service by 96% year-over-year.

GoodRx, a company that went public in 2020, is seeing some major competition this week from Amazon. On Tuesday the retail giant announced that its Amazon Pharmacy and Amazon Prime services are offering users new tools to compare the price of their medications. Users can view Amazon prices against local pharmacies. Users are also able to check their co-pay prices before ordering the medication.

Since this announcement, GoodRx's stock has taken a tumble, going from a high of more than $34 per share Monday, May 10, to a low of $26.95 the morning of Friday, May 14. As of noon on the 14th the price has evened out at around $30 per share. However, GoodRx leadership said brushed off concerns about Amazon's pharmacy business.

"Based on third-party data, they have not been successful. Mail-order prescriptions only make up about 5% of fill count in the U.S. Even through COVID, mail has remained a small piece of overall volume and is now actually starting to decrease as COVID eases. Third-party data indicates that Amazon Pharmacy is not gaining momentum and that their volume remains incredibly small," Voermann said. 

As for the new Amazon price comparison tool, GoodRx again said it was not concerned.

"Based on our review of Amazon sort of price comparison tools, we believe it's another attempt at lead generation for mail," Voermann said during the earnings call. "And in this time, since November, from what we've seen in third-party survey data and heard from industry participants, we've observed almost no usage of PrimeRx at retail. ... It also has not impacted our views of our prospects."

WHY IT MATTERS

The race for digital pharmacy customers is on. The prescription drug market is worth roughly $500 billion, leaving a lot of money on the table for potential vendors.

According to a report from Decision Resource Group, the use of digital pharmacies increased by 17% over the last year. The report also indicated that younger people, ages 18 to 34 are the most likely to use these tools.

While Amazon and GoodRx have emerged as market leaders, they are far from the only digital pharmacies on the market.

In April, digital pharmacy Capsule became a unicorn after it raked in an additional $300 million in funding. Last year, Genius Rx launched a new digital pharmacy that uses artificial intelligence to enable patient engagement.

THE LARGER TREND

This isn't GoodRx's first acquisition this year. In April, the company announced the purchase of consumer education health video company HealthiNation. Another notable M&A in the company's history is the acquisition of HeyDoctor, which led to the creation of its virtual care platform GoodRx Care, powered by HeyDoctor. 

GoodRx was founded in 2011, but went public in 2020. In 2020 it launched its telemedicine service price comparison tool,  as well as its lab testing price comparison service and an expansion of its telehealth offerings for subscribers.

Amazon came into the picture as competition in 2018, when it purchased digital pharmacy-startup PillPack for nearly $1 billion. Like GoodRx, the consumer retail giant also moved into telehealth. In March the company announced the expansion of its Amazon Care app-based telehealth services to its employees and other companies across the U.S.