When he got there, the elevator to the basement pharmacy was broken, and 40 people were in line ahead of him, he said. After waiting for an hour, the pharmacist told him they were out of stock. His phone had died, so he couldn’t ask his doctor to send the prescription elsewhere.
“It was so miserable,” said Kinariwala, 36, who left the drugstore that day without antibiotics. “I’m a pinball in the middle of this thing.”
Shortly after this experience, Kinariwala, who has a background in finance, introduced Capsule, an app-based service that delivers same-day medicine throughout New York City’s five boroughs. Since it started in 2016, Capsule has grown to 260 employees, most of whom work at the company’s headquarters in Manhattan.
The company works with 31 pharmacists who verify prescriptions and field customer phone calls, on such issues as concerns about a lost birth control pill or frequent urination. Though Capsule is set up to be mobile-first, it has a storefront pharmacy in the Chelsea section of Manhattan, which stocks 5,100 different medications and uses technology to track inventory. It receives deliveries from wholesale suppliers several times a day.
Drugstore chains have been considered an aesthetic scourge on the city for decades. In a 1999 New York Times article about Duane Reade’s takeover of the city, New Yorkers called the pharmacy’s expansion a “plague” and “insane.” Duane Reade has 126 stores in Manhattan alone, including locations owned by Walgreens, which purchased Duane Reade in 2010 and has started to spread its own tentacles. Walgreens has 88 locations across the city, including its Rite-Aid-owned stores. CVS has 150.
But if delivery services like Capsule continue to expand, Kinariwala said chain pharmacies in New York might succumb to technology in a similar way that Barnes & Noble and Borders were pushed aside by Amazon or the taxi industry has been challenged by Uber and Lyft.
“I think you’ll see, in every industry, people that don’t serve the consumer don’t deserve to exist,” Kinariwala said. “New York is all about faster, better, stronger.”
Linda Green, professor of health care management at the Columbia Business School, is skeptical of that claim. “I think it’s not obvious that a stand-alone pharmacy prescription service is going to make big inroads, particularly in a metropolitan area where you have a Duane Reade on every other street corner,” she said. “The idea of delivering prescriptions is actually old. It’s not clear to me what problem they’re solving here.”
Capsule is not the first pharmacy to offer delivery and app services. C.O. Bigelow, a family-owned pharmacy in the West Village that dates to 1838, has a delivery driver, a messenger and an app. Unsurprisingly, Ian Ginsberg, the owner, isn’t impressed by Capsule. “They’re not doing anything we haven’t done for 100 years,” he said. “All they’ve done is taken the human element out of it. They’re trying to scale as fast as possible.”
Deliveries, he suggested, can also be dangerous. “Patients don’t have a face-to-face opportunity with the pharmacist, so there could be subpar education regarding the medication,” said Arash Dabestani, senior director of pharmacy at New York University Langone Health. Walgreens declined to comment but noted that it also delivers same-day in the city for a fee. And it takes two weeks for the first package from PillPack, a national pharmacy and Amazon subsidiary, to arrive.
“PillPack is a mail-order pharmacy,” Kinariwala said. “It’s a totally different thing. I think of the competition as people who continue to tolerate a bad pharmacy experience.”
PillPack did not respond to a request for comment.
Even though several independent pharmacies in New York offer deliveries, they might not have the means to do so outside their own neighborhoods. C.O. Bigelow charges $13 to deliver beyond its surrounding area, which is from the Battery to Chelsea. Another pharmacy, Apotheco, with two locations in Midtown, delivers within a 50-mile radius, but patients outside Manhattan have to call early in the morning to secure a same-day arrival.
Paul Hudson, chief investment officer at Glade Brook Capital, which has invested in the company, along with Thrive Capital, the venture capital firm founded by Josh Kushner, Jared Kushner’s brother, said New York was “a great market for Capsule because it is such a dense city.”
“There’s a lot of dual-income households,” Hudson added, “and the pharmacy experience in New York really hasn’t been modernized as far as infrastructure and tech in a long time.”
Dr. Seth Finkelstein, an obstetrician-gynecologist in Manhattan who has become frustrated with traditional pharmacies, has been suggesting Capsule to his patients. “Every time a patient calls me telling me a prescription can’t be filled, or I have to call insurance for preauthorization, that’s my time or my staff’s time, and that’s money and time diverted to taking care of other people,” he said. “The pharmacy should be taking care of this.”
Capsule’s “insurance specialists,” who help doctors with preauthorizations, are better at dealing with insurance companies than the pharmacists at chain stores, Finkelstein said. (But he added that the process is not perfect: Sometimes confused Capsule specialists call his office for guidance.)
Merlin Chowkwanyun, a professor at Columbia, was drawn to the service after losing his cool waiting in a CVS line for 30 minutes. He found, however, that the deliveries often arrived late. And one time, Capsule dropped off the wrong generic brand of a migraine medication he had requested.
For some people, it’s still much easier to run into one of the hundreds of chain drugstores across the city than to wait two hours or more for a delivery. “If I wake up with a sty in my eye, I can walk two blocks and pick up a prescription,” said Green, the health care management professor. “This is all about convenience, and there’s already a lot of other ways in which these things have become convenient.”
But in the age of Seamless and Amazon Prime Now, Kinariwala seems up to the challenge. He said he wants to see Capsule become the “flip of Duane Reade” within five years. “It’s everywhere, and everyone knows about it and uses it,” he said. “But everyone loves it.”