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IOWA CITY - A University of Iowa graduate who quit his job four years ago to chase an idea of harnessing digital technology for rural pharmacies has sold his startup in what one investor called an '8-figure acquisition.”
Ohio-based Cardinal Health Inc., which bills itself as a $103 billion health care services company, acquired Roby Miller's Telepharm in July, according to Courtney Tobin, a Cardinal spokeswoman. She said the company was not required to disclose the acquisition price.
Telepharm officials didn't return calls.
'Cardinal Health will continue to expand the reach of telepharmacy services into additional states,” Tobin said in an email. 'We're only at the tip of the iceberg in terms of what is possible with telepharmacy and health care technology in general.”
The acquisition comes after Telepharm in 2014 closed a $2.5 million venture capital fundraising campaign led by Iowa Board of Regents President and agribusiness pioneer Bruce Rastetter; Adam Ingersoll, founder and principal with Compass Education Group; and philanthropist John Pappajohn, who has given away more than $100 million, including to major projects at the UI.
'Start-ups with a single founder who has never run a business before, moving into a market that doesn't exist yet, with a difficult regulatory environment … odds of survival are close to zero,” Ingersoll recently wrote on social media. 'Roby not only survived, but in just four years, he built a thriving business that was acquired last month in an 8-figure acquisition by Cardinal Health.”
Telepharm also has previously received backing from Built By Iowa, an equity fund created by Miller, Ingersoll and business executive Ravi Patel, and San Francisco-based Rock Health, a seed fund that supports digital health entrepreneurs.
As it continued to grow, Telepharm partnered with UI Health Care on research aimed at providing technology to rural pharmacists enabling the virtual verification of medicine. Rastetter listed his Telepharm investment as a potential conflict of interest with the Board of Regents because of the UI connection.
'When he told us about this, it just made sense,” Rastetter said, according to a 2014 Telepharm blog post written by Miller. 'This is a wonderful opportunity to invest in Iowa and rural America, and I couldn't be more pleased to be a part of it.”
Telepharm's technology enables patients to connect with any pharmacist from any location over a secure proprietary online platform.
Quitting his job at the Pearson education company, Miller started the venture after his family - which owned six rural pharmacies - had to close one of them because of rising costs and low patient population.
In his blog, Miller calls Telepharm an 'economic game-changer for the pharmacy industry” in that it allows pharmacists in a central location to serve patients at off-site pharmacies, doctor's offices, care facilities or even patient homes.
Last year, Telepharm acquired Custom Data Inc., which does business as Telepharmacy Concepts, and introduced Michael Busch as chairman of its board. Busch, according to a Telepharm news release, founded Medicine Shoppe International, which sold to Cardinal Health in 1995 for $360 million.
'It's a great business model,” Busch said of Telepharm in the release. 'The technology solution that Roby was able to develop is exactly what the industry needs.”
Asked about Busch's role in the acquisition and history with Cardinal, spokeswoman Tobin said he was on the Telepharm board 'prior to the acquisition.”
The Gazette reported last year that Telepharm operates more than 120 pharmacies in nine states. Gov. Terry Branstad in April signed a bill expected to ease the path for more telepharmacies by allowing their operation and establishing the Iowa Board of Pharmacy as the regulating agency.
Telepharm has estimated that 46 Iowa pharmacies closed from 2010 to 2012, impacting 220,000 people.