Faculty of Business Studies
Tutor Marked Assignment
BE322: Entrepreneurship and small business management
First Semester 2016 – 2017
ScriptPad: Interesting Idea-But Will Doctors and Pharmacies Sign On?
Bruce R. Barringer, Oklahoma State University
R. Duane Ireland, Texas A&M University
To ScriptPad founder and CEO Shane Taylor, the problem his company solves is personal. Taylor's father, who is fighting both heart disease and cancer, takes 26 different medications to fight his illnesses. Any mix-up or error associated with taking his medications could cause Taylor's father severe health complications or even his life.
Observing this set of circumstances motivated Taylor to start ScriptPad. ScriptPad is a software platform that transforms an Apple iPhone, iPad, or iPod Touch into a digital prescription pad, which stores a patient's medication history and enables a doctor to write a prescription faster and safer than using a traditional prescription pad. Once the doctor enters a prescription and approves it, it is sent electronically to the pharmacy.
Scope of the Problem
Taylor's fears about his father and the possibility of a prescription mix-up aren't unwarranted. Although this may surprise you, evidence suggests that a total of 40 percent of handwritten prescriptions contain some type of medication error, whether it's improper dosage, potential drug interactions with other medications the patient is taking, or simple handwriting errors including handwriting that's hard to read. In most cases the errors are caught, with the only harm being the inconvenience caused by correcting the error. But sometimes the errors aren't caught, and real damage occurs. In fact, according to Script Pad’s Web site, 7,000 deaths occur each year in the United States as the result of prescription writing mistakes.
How ScriptPad Works
ScriptPad is an app that resides on the Apple iPhone, iPad, and iPad Touch and will soon be available for Android-platform devices. To write a prescription, a doctor clicks on the ScriptPad icon and pulls up a list of his or her patients. Once the correct patient is selected, the doctor searches for a drug based on a catalog of all prescription medications. The desired medication is selected, and the available dosages for that medication are shown. The doctor then selects the desired dosage, decides how often the medication should be taken-say one pill twice per day-and then determines how large of a bottle of the medicine to prescribe-say enough pills for two weeks. This is all done by moving from screen to screen on the iPhone or similar device, in the same sequence that a doctor would mentally think through when writing a handwritten prescription. A display is shown where the doctor confirms that the prescription is correct. Then a list of pharmacies appears, along with the cost of the medication at each pharmacy. After conferring with the patient, a pharmacy and the specific drug are chosen and the prescription is electronically sent.
In a true win-win scenario, this approach has advantages for the doctor, the patient, and the pharmacy. For the doctor and the patient, it dramatically lessens the possibility of a medication error.
The app is "smart" in that it knows the patient's medical history and alerts the doctor if a prescription is attempted that has known negative interactions with a medication the patient is currently taking or the patient's medical profile. It also eliminates a mistake being made through a simple handwriting error. For the pharmacy, the ScriptPad app only shows the dosages of a medication that are available. When writing a handwritten prescription, if a doctor prescribes a dosage that isn't available, the pharmacy will have to call the doctor to get the right dosage. This process is called "call back." Pharmacies like to avoid call backs because it consumes staff time and frustrates patients, who are often at the pharmacy waiting for their prescription to be filled and can be told that they'll have to come back the next day because the pharmacy needs to verify the dosage with the doctor. The doctor is often unavailable when the pharmacy makes the first call, so it can take several hours or even until the next day before the doctor calls back and the correct dosage is set.
Business Model and Positioning ScriptPad will make money in two ways. First, a free version of the app will be available. In addition, a premium subscription-based service will be available for $49 per month. The timing is good for a doctor that selects the premium service. There are federal financial incentives available to doctors for switching to medical recording technologies, which will more than offset the cost of the service. The second way the company will make money is via pharmacies. A transaction fee will be charged to pharmacies for each ScriptPad initiated prescription that it fills.
In regard to competitive positioning, ScriptPad believes it has found a sweet spot in the market. There are companies that provide comprehensive electronic medical records platforms, which not only provide electronic prescription capabilities but help a doctor's office improve its entire record keeping system and office workflow. The challenge with these systems is that they're expensive, require considerable training to implement, and no single component of the system is developed to perfection. In comparison, a doctor can start using ScriptPad for the cost of an Apple iPhone, iPad, or iPod Touch, and the interface is intuitive. It doesn't require any special training. ScriptPad is also singularly focused on one function-electronic prescriptions. Taylor and his team believe that this singular focus allows ScriptPad to maintain usability and a cost advantage over its competitors for electronic prescriptions. Script Pad’s target market is smaller physician practice groups with one to five physicians. A single physician can download the ScriptPad app from the Apple app store and start using it without having to convert the entire practice. The Challenge-User Adoption
ScriptPad believes that its major challenge will be user adoption. For Script Pad to be successful, it needs adoption on both the physician and the pharmacy sides. The medical industry is known to be tough to change. Despite the advantages of electronic prescriptions, currently only about 10 percent of prescriptions are handled electronically. Government incentives are helping spur adoption of electronic prescriptions and electronic medical records, as mentioned earlier. In 2009, the U.S. Congress authorized funding to promote electronic health records as part of the economic stimulus package. Still, there are reasons to be optimistic that ScriptPad will be a success. ScriptPad is a company that can literally save lives, which is a claim that not many companies can make. It is also very intuitive, easy to learn, and reduces pharmacy call backs. The crucial question is whether ScriptPad will be able to gain a large enough critical mass of adopters to prove its concept, capture the attention of investors, expand to additional platforms, and grow the business.
Question 1 (35 marks, 300 words)
What environmental trends are working in Script Pad’s favor? If ScriptPad has uncovered a promising business opportunity, what environmental trends have made ScriptPad possible?
Question 2 (35 marks, 300 words)
On what side do you think ScriptPad faces the biggest adoption challenge-the physician side or the pharmacy side? Explain your answer.
Question 3 (30 marks, 200 words)
If you were Script Pad’s founder, and you now have a working prototype of your device, how would you proceed? Are you ready to go to market or are there additional steps that need to be completed before ScriptPad is available for sale?
Sources: ScriptPad homepage, http://scriptedpad.com (accessed January 10, 2011); Shane Taylor, "Making Getting a Prescription Safer: ScriptPad," YouTube (accessed January 10, 2011).
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