Behind the counter at Drugstore.com
By Dawn Kawamoto
Staff Writer, CNET NEWS.COM

Peter Neupert is no stranger to the Net, as one of the main players behind MSNBC online.

But after 11 years with Microsoft in various senior management roles, Neupert decided he was ready to test the waters on his own. The executive left Redmond last July to lead start-up Drugstore.com as president and chief executive.

Stepping behind the counter at Drugstore.com gives Neupert the opportunity not only to be the head of a promising company, but an influential player in a burgeoning industry that he says will be the next big thing.

Drugstore.com, which sells prescription medication, over-the-counter drugs,

and healthcare goods on the Web, is looking to capture some of the $89.1 billion prescription drug market, as well as a piece of the $19 billion over-the-counter medicine business.

After the site is launched tomorrow, Neupert will have to use all his business savvy and flash to guide the fledging company in the rapidly growing market.

Competitors like PlanetRX are also looking to stake a claim in the online pharmaceuticals market, while established retail pharmacies ready plans to launch their own Net stores.

Drugstore.com received seed funding from venture firm Kleiner Perkins Caufield & Byers. Today, the venture firm was joined by online bookseller Amazon.com (also backed by Kleiner Perkins), which announced a "significant" minority investment in the online pharmacy. And, in an unusual move, KPCB partners John Doerr and Brook Byers both sit on Drugstore.com's board.

Neupert recently looked into the industry's future and that of his company in an interview with CNET News.com.

NEWS.COM: What is going to drive people to buy their medication or healthcare products online?
I think the most important thing is convenience. If you can avoid going to the drugstore by making sure that you're going to get the products you want when you want it, with a guaranteed home delivery and from the privacy of your own home, why not?

Healthcare products can be heavier to ship than drugs, so how much money are consumers likely to save using an online service compared to going to the local drugstore?
Although I think people are very focused on price because some of the online commerce people have got them very focused on this, I don't think that'll be the primary reason people will buy these products online. I think the primary reason people will buy these products will be things that are different than price. It's got to be a fair price, and a low price, but I don't think their objective is to try to save a ton of money by buying these products online. I think their objective is to say, 'I want to save 20 minutes. I want to get it delivered to my home. I want to get the products that I want.'

What age group will use this service most? It seems senior citizens are the biggest buyers of prescription drugs, but they aren't a majority online.
I think it'll be broadly distributed, just like I think you see it today in e-commerce. As for seniors, 20 percent of people over 50 are online, and there's 47 million online users. That's over 9 million people to go after. That's a big bar and I'd be happy with that.

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