Photon, a startup modernizing prescription infrastructure, has raised $16 million in series A funding to scale its business.
The round was led by Healthier Capital, with participation from Notation, Flare Capital and Evidenced. It will be used to expand the engineering and commercial teams, as well as health system and platform integrations.
Photon's thesis is that the electronic prescribing system is broken. The lack of visibility into price and convenience leads to unnecessary transfers, unanswered phone calls and abandoned fills.
“As a patient, the experience in pharmacies feels very antiquated compared to anything else in our lives,” Otto Sipe, Photon founder and CEO, told Fierce Healthcare in an advanced interview. “You don’t see a price until you physically show up at the pharmacy … and the problem is you can’t really comparison-shop.”
This results in unhappy stakeholders all around, argues Sipe, from patients who have to transfer prescriptions due to stock or pricing issues to pharmacists and providers who have to help patients navigate their benefits or facilitate transferring prescriptions.
Since 2021, Photon has been rebuilding the prescription experience as a full end-to-end platform. It integrates with EHRs, texting patients a link to access their prescriptions digitally. On the Photon marketplace, patients can see pharmacies nearby, their hours, pricing and inventory to make an informed decision. Today, patients most often prefer mail-order pharmacies on Photon.
Not only does Photon claim to reduce admin work, but patients are also more likely to pick a prescription up at the pharmacy if it comes through Photon, according to Sipe. That adherence is better for health outcomes, which providers care about.
Dozens of pharmacy partners across retail and home delivery work with Photon. Even if a pharmacy isn’t a partner, Photon can use agentic AI to collect information for the platform. For health system partners, in-house pharmacy teams benefit from real-time visibility into fill activity, per Sipe. Photon’s platform also supports prior authorization and clinical decision support. Photon routed prescriptions to half of American pharmacies in the past 30 days, Sipe said.
Artificial intelligence helps Photon process complex and fragmented data across pharmacy networks, benefit structures and formularies in real time. But, in Sipe’s view, the underlying data challenges still need to be solved before AI can step in and automate.
“There’s a lot of bullshit AI products,” Sipe said. “I think the record is going to stop on that.”
Interoperability and transparency still have not been solved in healthcare. Without that, AI will still need to ask for human input, such as benefits information. “AI is running into the previous generation of tech problems in healthcare,” Sipe said, using the analogy of trying to add a supercharger on a car when its foundation is rusted.
While Photon has pharmacy partners, it is primarily focused on creating value for clinicians, per Sipe. Photon’s biggest customers are large providers, including several health systems that will soon be announced. Others are also interested, including pharmacy benefit managers and payers. This makes sense to Sipe, given that transparency regulations are forcing the need for a better consumer experience. There is even a use case for pharma, who want more sophisticated insights into prescriptions, Sipe said.
Among Photon's publicly disclosed partners so far are Mark Cuban's Cost Plus Drugs, Amazon Pharmacy and athenamarketplace. Virtual provider Blueberry Pediatrics, also a partner, has found its patients can get their prescriptions 5x faster with Photon and save money on customer support, according to a blog post on Photon's website.
Photon, which primarily competes with Surescripts, has served millions of patients and has raised $32 million to date. The company hopes to expand to specialty pharmacy down the line, Sipe said.