In less than 10 years, CoverMyMeds went from a pharmacist’s idea to automate prescription drug approvals to Ohio’s first tech startup valued above $1 billion.
In January 2017, San Francisco-based McKesson Corp., one of the three biggest health-care products distributors in the U.S., announced plans to purchase the fast-growing CoverMyMeds for $1.1 billion. The acquisition, on the heels of IBM’s purchase of Explorys and Assurex Health’s purchase of Myriad Genetics, once again proves that startup companies can succeed in Ohio. It also strengthens Ohio’s position as a leading location for investors and entrepreneurs.
CoverMyMeds founders Sam Rajan and Matt Scantland started CoverMyMeds in Twinsburg in 2008 with a simple goal: to streamline the approval process for prescription drugs. They created software to automate and accelerate the process for obtaining prior authorization from health insurers, eliminating faxes, phone calls, long waits and other hassles that often resulted in denials.
The company has nearly doubled in size every year since its software launched in 2010. Today, about 450 employees work at the company’s Columbus headquarters and original Twinsburg office, and the company plans to add 300 new hires in 2017.
The deal with McKesson allows CoverMyMeds to operate as an independent business unit under its existing leadership.
In a blog post following the announcement, company founders Rajan and Scantland reiterated their long-term commitment to expanding in Ohio: “We’re excited for the future and our ability, now more than ever, to help patients get the medication they need to be well and for CoverMyMeds to be the best place to work in Ohio.”
JumpStart Inc., the nonprofit investment group that administers Ohio Third Frontier technology funds for Northeast Ohio, invested $500,000 in CoverMyMeds in 2010 and provided guidance and industry introductions to help the startup continue its scale-up growth trajectory.
“This is a great signal the investments of the Ohio Third Frontier have supported companies that have the potential to grow to be quite large and can be meaningful on the national scene,” said Ray Leach, CEO of JumpStart.