The patient is not the customer in American healthcare, Ro chief executive Zach Reitano told Invest Like The Best, and GLP-1s are gut-hormone mimicking drugs that regulate appetite and blood sugar and broke that pattern by selling direct.
Cash made prices fall.
Reitano said the US spends about 18% of GDP on healthcare because unit prices and administrative burden keep rising, not because Americans use more hospital care, and he argued the country should in theory spend far more if it got health in return, even 50% to 70% of GDP at the limit. That frames his breakdown of where money goes, with Reitano estimating 30% to 35% to hospital systems, 20% to 25% to doctors offices and 9% to 10% to drugs, while acute survival for cancer, heart attack and stroke beats many peer countries and life expectancy stalls on what he called a fast clock of guns, crashes and overdoses and a slow clock of chronic disease.
A buyer finds Ro through a search for weight or metabolic care, checks insurance through an AI review that Reitano said has served more than 1% of the US population for free, then chooses cash pay or insurance with help from a clinician. The order runs on software Ro built itself, Reitano said, including its own medical record system, lab, pharmacy software and provider network that routes the prescription to mail delivery or local pickup and offers multi-month subscriptions that Reitano said save patients $600 to $1,800 a year. It works because demand is aggregated around cost, quality and convenience, which lets Ro integrate with both Eli Lilly and Novo Nordisk while claiming two to five times the daily signups of rivals, Reitano said.
What changed is disintermediation. Reitano said branded list prices around $1,300 hid net prices of $300 to $400 after middlemen took cuts and rose 6% to 8% yearly until patent expiry, while direct cash offers cut the price to $149 and let makers keep equal or greater gross profit as volume surged. He called pharmacy benefit managers the appendix of the system, a structure software can now replace, though he conceded insurers still matter for debate over what should be covered. Ro itself scaled from about a $250 million run rate four years ago to more than a $3 billion run rate with fewer staff than in 2021, Reitano said.
The hard part is supply and time. Reitano said the system has too many patients who need care and too few clinicians to provide it, and it operates on time horizons that mean little to an individual choosing treatment today. GLP-1s moved in four years from diabetes approval to obesity, heart disease, sleep apnea, liver and kidney disease, Reitano said, with research underway in neurodegeneration, pain, addiction, mental health and cancer prevention, and he estimated 10% to 15% of Americans now take one.
Watch the next drug generations and whether lower cash prices plus higher volume keep makers whole without middlemen, because that is the test of his claim that patient-paid care can bend the rest of the system.
