Interview with Barry Patel – 455
In today's interview, Barry Patel describes how he and his business partner developed the first pharmaceutical franchise.
He explains how they built Galt Pharmaceuticals around a distribution model that most pharmaceutical companies avoid and why that gap created a compelling franchise opportunity for physicians, pharmacists, and other healthcare professionals seeking income outside of clinical work.
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Galt's Distribution Model and Why It Works
Most pharmaceutical companies sell through large wholesalers, which adds cost, reduces margins, and creates distance between the manufacturer and the patient. Galt bypasses that layer entirely by distributing exclusively through independent pharmacies. Franchisees work directly with those pharmacies to ensure patients receive their medications — with no wholesaler markup in between.
The products are FDA-approved and currently centered on non-opioid pain management, an area with strong demand and growing regulatory support. Independent pharmacies are a deliberate choice: they are more flexible than chain pharmacies, more responsive to patient needs, and more willing to build ongoing relationships with franchisee representatives. Compliance training is provided to all franchisees to ensure adherence to the regulations governing pharmaceutical sales and distribution.
The Franchise Opportunity for Healthcare Professionals
Galt currently operates 500 territories across the U.S., with 450 still available for activation. Franchisees own their territory, build equity over time, and have the option to sell or transfer the agreement down the line. The model is designed to be run alongside existing clinical work or as a standalone income stream. That is particularly relevant for physicians who are retired, or have left clinical medicine for other reasons.
Candidates with some sales experience and a resilient mindset are best positioned to succeed. A healthcare background provides a strong foundation for building relationships with providers and pharmacies. Pharmacists can also enter as franchise owners. An arrangement Barry highlights as particularly well-suited, given their existing relationships with independent pharmacies.
Identify an unmet problem in healthcare, build a specialty niche, and treat continuous learning as non-negotiable. – Barry Patel
Summary
Barry Patel shares his expertsie as an entrepreneur. He then explains how Galt Pharmaceuticals offers a franchise model that converts healthcare expertise into a scalable business without pivoting into an unrelated industry. The distribution model is lean, the products are FDA-approved, and the territory structure is built for long-term equity.
NOTE: Look below for a transcript of today's episode.
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Links for Today's Episode:
- Galt Pharmaceuticals' Website: Products and Pipeline
- Galt Pharmaceuticals' Franchise: Franchise Information, Territory Map, Process for Becoming A Franchisee
- Highlights from the Nonclinical Career Summits (19 presentations about nonclinical and unconventional options)
- Nonclinical Career Academy
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John Jurica
Today's guest is a pharmacist who started his career working with large pharma companies way back when, but then, if I reviewed his LinkedIn appropriately, he did some consulting, but now he's been an entrepreneur for quite a while, and he's opened at least one new kind of company as a franchise, which was completely different than anything I've ever seen. So with that, Barry Patel, welcome to the PNC podcast.
BarryPatel
Hi John, thanks for having me on. Appreciate it.
John Jurica
So as I said in that little brief intro, I think that you know, you work for pharma and you're a pharmacist, that's your trained PharmD. Technically, you're a doctor, you know, but I know you don't always get the respect that the medical doctors get. Drives from me crazy more than anybody else. But tell us a little bit about your background, just to get things rolling, you know how you know, how did you start out as a pharmacist, and why? And how did you get to where you are today?
BarryPatel
Yeah, I think just in the same way a lot of physicians go to medical school, they want to, they set out because we want to help people, right? And so I went into pharmacy to go set out in the medical profession to help people, and do it as a pharmacist medications and doing what pharmacists were trained to do over decades ago, which is really work in their communities, talk to their patients and be able to guide them on medication that were prescribed by their physician. So I went into pharmacy school, but then always knew that I wanted to go into entrepreneurs one day, and that's because I grew up in a family full of entrepreneurs. As you know, many families do have that, and then they kind of see that growing up, and that's what they want to do. But I, as soon as I got out of pharmacy school, I went to work for a pharmaceutical company, one of the biggest out there at the time, in the early 90s, and that's Merck, still big, and really was a good learning ground for me, not just to learn about how a pharmacist can function in a non clinical setting, which is a very relative to sort of how your channel here works, but just to actually get a bird's eye view of health care when you're in a pharma company, you get to understand, yes, how a drug is made and how it's sold and how it's works within a population household. But also you get to see the healthcare system through the physicians eyes, insurance company and so forth. And so that was a good start for me, before I then stepped into entrepreneurs. And like I said, I started my first company in the 90s, and then from there on, went on to Galt.
John Jurica
All right, so what inspired you to start Galt? And from what I understand, it does several different things, or is it focused on one particular type of business?
BarryPatel
Yeah, so to answer that question, let me just back up as to the previous company I had, because it does kind of relate. The first company was total therapeutic management. TTM, for short, and I co founded that company, really with the premise of presenting information back to healthcare providers, information that was really buried in medical records in more subjective narrative form back in the 90s. As you may remember, it's all paper based charts. EMR just started becoming popular over the last 1015, years. And so you had to extract that information, make it analyzable, and then presented it back to healthcare providers as well as insurance companies and pharma companies that want to understand what are the outcomes for particular disease states. And so building that company that was a much more of a service oriented business. We were getting contracts by large health systems or by insurance companies or by pharma companies, but it was project by project, right? So which were successful in growing the business and then eventually selling it, and I exited from that business. But then the dream was also always to go into a product business. And so Galt, which I formed with my current partner, Wade Smith, he's also a pharmacist. Is a is a pharmaceutical company that owns products, FDA approved products. And when you end up product business, as opposed to a service business, or any of your audience that looks to get into consulting businesses and anything that's service oriented, you're constantly going to keep pitching for the next product or next project, right? Whereas, if you get a product that can then be annuity based income or the recurring revenue model, if you want to say because now you have a product, you've got a system around it to kind of keep growing. That was the vision. So 2016 when I teamed up with Wade, our first product was Doral. It's a product. It's long acting benzodiazepine that's only indicated for insomnia. And that was our first product, because that was the one that we could acquire, bring it on, and then since then, we've launched several other products that fit our different portfolios and therapeutic areas.
John Jurica
Okay, how does that work? You know, because I think of, you know, massive pharmaceutical companies, biopharma companies, whatever they have, all these giant marketing departments and so forth. How does someone that's in a little niche kind of just be able to get the connections with the providers, get the meds out there? Just explain a little bit of that, because I find that fascinating.
BarryPatel
So typical pharma companies that you're used to even in practice. And I said, you know, you were Chief Medical Officer, so you understand the interactions with pharma companies. They have a big bureaucratic system full of marketing professionals, sales professionals, so that's how they get the education and then distribute through supply chain channels, which are typically the independent pharmacies or chain pharmacies and inpatient setting, the inpatient pharmacies. So there's a strong supply chain setup already through wholesalers. So the way Galt does it, and the reason why we're different, and why we why we really founded the company to be different, is because there needed to be change in the industry. So the first thing we do is we go through a limited distribution model. We only distribute our products through independent pharmacies, community independent pharmacies. We bypass the wholesalers. We don't go through the big three, McKesson, Cardinal and ABC, because everywhere you look within healthcare, there are middlemen that are going to take a little bit of the the amount along the way, so more you can eliminate and go directly to the end seller, in this case, the independent pharmacist, then you're going to cut out a little bit of the fat. So that's that's what's different with the Galt pharmaceutical model, is distribution locally through independent partnering with independent pharmacies and then working so that way, they understand what it takes to make sure the patient gets the medication for the least cost. Because insurance is a reality. Every product almost today requires prior authorization, unless it's a, you know, 234, dollar generic, and so the independent pharmacy or the pharmacist needs to be much more intimately involved in making sure that patient knows that and works with the doctor's office to collect notes if needed, and submits all that to the insurance company. And so that's another part of the model that we've created to ensure that that all patients get the medication they're prescribed through that process, and if they can't, if the insurance still doesn't cover it, we have a low cash price of $45 for anybody where the patient pays that, and basically the pharmacy dispenses it for them. So that way they don't, you know, have to go without that. So that's the pharmaceutical piece of it. The other unique thing about Galt, we have a franchisor system too. So Galt pharmaceuticals and then there's a franchisor system called Galt franchise systems. Galt franchise systems is technically our sales force. So instead of hiring an army of Salesforce, we have franchised the sales function, so that way an entrepreneur in a local territory can acquire the exclusive rights to promote our products. Now the key thing is that they get trained on not just the product and everything else, but also the compliance aspect. We're highly regulated industry, so they need to know what they can say, what they can't say, what they can pay for, what they can't pay for, because there's a lot of financial, you know, relationships that cannot occur in these in these discussions, as it relates to anti kickback statutes and so forth. So they're educated on that and monitored for that, but also they don't have to worry about everything else a pharmaceutical company does, the manufacturing, the supply chain, the you know, the it and everything else, the data we provide, all the support for that part of it. So they're basically walking into a business as a franchisee to run it as a sales professional, and doing a revenue share with Galt. So that way that serves as our, our sales force.
John Jurica
You know, as I was starting to think about this, and I just saw what you were doing, I thought, wow, you know, you've got these huge companies, and now you've got this little niche for these particular meds that you have. But the reality is, now that we're talking is when I'm in my office seeing patients, which I don't do anymore, but when I was there's usually the rep is representing one or two drugs at the most, a lot of times, at least, to the provider, the face to face provider, medical provider. So really, one of your reps, whether they're franchisee or not a franchisee, I mean, to the physicians, or maybe to the pharmacy. Pharmacies, you know, it's just another rep coming in with a drug or set of drugs that we think we might want to carry. Is that kind of true? The way I'm looking at it,
BarryPatel
you are. You're looking at it correctly in on the surface, that's That's true. They are. They're another representative for the company that's representing the product, but our owners, our franchisees and their reps are basically trained to really promote the fact that they are a small business. They're a franchisee that's part of a bigger organization. And I think that, you know, endears them to a lot of physician practices that, wow, that's that's another small business owner just like me. They're not going to buy me a huge lunch and take me to dinner like these big pharma companies might do. They're going to be here to provide value, which is education, products, maybe samples, if patients need it, and be there for me to ensure that that patient gets the drug by making sure that the right pharmacy has stopping the drug and all of that. So yes, on the surface, you're right, but I think what we do is go deeper with our relationships with our health health care providers, because that franchisee technically owns those zip codes and territories. So in within Chicago, I know that's where you are. There's seven different territories in the Greater Chicago area. So if I own the South Chicago territory that I I know what's going on in there, and I can choose that I want to work with only 20 to 25 healthcare providers and go deeper with them, as opposed to going across to probably 1000 prescribers that are in that in that territory, they can go to all of them by layering on other reps. But our model is you can't effectively manage 200 healthcare providers for one person and be good at it. We have to go deeper, rather than wide. So that's the difference that you'd probably see if you met with one of our Galt franchisees or their reps.
John Jurica
All right now, you know, who knows? I may have some pharmacists listening to this, you know, it's mostly physicians, but there's always overlap, you know, some other healthcare providers and that. So what's the advantage to the franchisee? You know, I can imagine what it would be, because my wife was a franchisee, and so she kind of knows, and I know, through her, but why would I want to do that as a pharmacy rep or, you know, working for a big company or something?
BarryPatel
Well, so one is that own your own business, building equity in your business, just like your wife did. And number two, obviously, the income potential is going to be up to you, not up to your corporates, leadership and sales targets changing from one year to the next because, oh, well, I exceeded them, and now look, I got a new target. So this is nothing changes with that. It's just however many prescriptions are generated based on your efforts through your sales efforts, then that's going to keep going up based on however many so if you want to layer on more reps within your territory and build it that way, then, then you have the ability to do that. But the other thing is, we put a system around it, every franchise, every good franchise system anyway, and I'm not sure which one your wife is part of would have great support and engagement and education, continuous training, continuous sort of new tools, resources, data, it whatever it might be, and that's going to be because, not because a pharma company won't provide, I mean, of course a pharma company will provide that too, but our success is based on the success of our franchisees. So the more that we're able to do that for them and make them successful, then the more we're going to be successful. So it's innately, that's what we need to do. So the system is very important.
John Jurica
Yeah, definitely. You know, I'm assuming that a lot of the skills that they would need and would apply would be the same skills working for a larger company. But are there some other nuances to it, just that maybe, if, again, and there's a pharmacist or someone else who wants to help invest in something like this, would that you do that makes it a little easier or a little more straightforward to get to that next sale?
BarryPatel
Yeah again, it's what's needed in any entrepreneurial business, is the drive to succeed and be resilient, to get across through any obstacles, because within anything within healthcare is going to come up with, there's going to be challenges and barriers, whether it's, you know, access to a healthcare provider or or even insurance barriers and things like that. So they have to have that resilient mindset, and that's, I think, more of a characteristic than anything else. But other than that, I think having a little bit of sales experience, so even if they're not going to be going out doing the sales but to be able to understand how sales works, and I'm going to be able to better manage a sales person that needs to function in this type of environment that's highly regulated, so I can make sure that they're doing things by the book compliant. So some things so help. It's helpful to have somebody in the healthcare field to know that the do's and don'ts and things like that, if they're at least going to be managing somebody to do that. So pharmacists, you mentioned pharmacists. We do have pharmacists that are franchise owners. They own an independent pharmacy. This is a total separate complementary business, because their sales function is done by a sales rep. They serve as a pharmacy as and they're not the only pharmacy within the territory. There could be others, but they'll get credit for wherever that whichever pharmacy dispenses that product. And so technically, it's the first time a pharmacist can actually make money off a prescription going to their competitor pharmacy. Because they're they've got a salesperson that's in charge of the products. But, yeah, I think it's, it's definitely something that is different and unique. But though those are the key characteristics, is just having a little bit of that that drive
John Jurica
what we talked a little before we turned the recording on. But let's say there was a physician who was retired, or maybe, you know, I've had other physicians who are disabled and they can't practice anymore. Maybe could they partner with a pharmacist if they, you know, wanted to do something like this? Is that even an option for a franchise.
BarryPatel
So again, going to the anti kickback statutes, we steer very clear of health care providers that have any prescribing authority to be involved in the franchise system, just because that's a conflict of interest. Obviously, if it's a provider that has is not licensed and isn't practicing and doesn't have any influence themselves to prescribe and and generate prescriptions themselves, then they'll still go through our process of application and, you know, interview to ensure that, because the most important thing for us is compliance, because now we're handing off a sales function to a third party entity, a franchisee, so when something's never been done before, then there's, you know, extra scrutiny on it. So we're going to be careful with who comes through, but if they meet that criteria, where they they're they're business people, they went to medical school that wasn't their fault, that they can't we don't want to hold it against them, but as long as we're confident that there's no relationship to to be able to drive prescriptions or do their own so partnering up with somebody is easier from that standpoint, because they can't prescribe or they can even own it, but maybe they don't want to go out and do the Sales. But as you know, healthcare providers, physicians, have colleagues and a good network that they can leverage because the respect that they've built over time, and so I think that's that's worthy of consideration, right there.
John Jurica
Okay, so since we're talking about the franchise, can you give us the website where someone would go if they're interested in learning more about that,
BarryPatel
sure Galt, G, A, L, T, and then the word franchise, F, R, a, n, C, H, I, S, E, franchise.com and on that site, they'll have information on where there's an interactive site With all the states and where we have territories available, as well as what the process is to kind of become a franchisee. Again, we're very picky. I hate to say it that way, but on who we let into our system, because we want to make sure they're serious about it. Have a good business plan in place, and yes, they are. There are no compliance risks or anything like that. Once they go through the process, then, you know, there's a lot of tools on that site for them to learn videos and press releases and media and things like that that they can go to and see to learn more about it.
John Jurica
And then, basically they have to do a non disclosure agreement, and then get the whole buried in paperwork that you're going to send. That's all the legalese that's in there, right?
BarryPatel
Yep, your your wife knows very much about the legalese that a Franchise Disclosure Document, franchise agreements and so forth. But yeah, before that process, we have a questionnaire, and then there's a discussion and interview and an NDA and all of the process. And then we encourage a site visit. We're based here in Atlanta, and Atlanta is a great place to come, especially in the winter.
John Jurica
Yeah.
BarryPatel
But anyway, they get to meet the team. They get to see who is actually part of helping to support the franchise system. You know, because they're going to be investing sometimes up to $200,000 is what the franchise fee is. And so that's where the skin in the game comes into play, right? If, if you're just hired as a sales rep with no skin in the game, then you don't have as much intensity to want to say, Okay, well, I could just get another job. Well, in this case, you're all in, you put a significant amount of money, so now I'm going to make this work, and that's why that's there. Now as far as other costs, there's no real other costs like, I think the same thing with your with the with the other franchise opportunities, where you don't need a brick and mortar office, then there aren't really those costs involved. It's really just getting operational with a sales rep and training and things like that.
John Jurica
Is there, are there other employees? Is it a one person show or they, you know, are you said you could actually have other sales people, but, or does it really, is the over, you know, the management of it fairly straightforward to where you don't need a lot of staff and that kind of thing.
BarryPatel
Yeah, it's pretty straightforward. I mean, we have a lot of owner operators, where they own it, and they're the ones out doing the sales, and their sky's the limit for them in terms of how hard they work. But then you have others that are owners, and they like to oversee and manage and not can go out in the field. We ask each even owner, to get certified to learn about the products and know what it takes to be a sales people, if the person, if they, even if they don't go out there and they like to just oversee, manage, hire and then ensure that their business is running smoothly. So either way. But besides that, because galp has a marketing department. We have medical affairs department, you know, we have it. They don't need to really invest in those kinds of personnel.
John Jurica
Oh, cool, that's good. I'm just love to ask questions about franchises. I think it's just instructional for anybody that might be thinking of doing any franchise. But if you don't mind, when did you start? You know, like with your first franchisee. And if you don't mind sharing about how many you have or what states are covered and not covered, just to give us a sense of the penetration and what might still be available for people.
BarryPatel
So there are total of 500 territories across the US, and we've got 450 still empty, meaning about 50 to 55, that we've got activated,
BarryPatel
And we started that in 2018 we went up all the way to 70, but trim back down. You're thinking, how did that happen? Well, there are some territory owners that this doesn't make sense for so, you know, mutual, mutually, we've terminated along the way somewhere, but these are the the ones that are still in the system. There's that's about 26 different owners that are part of that. So that you do see that we have some that have multi territories. And actually the the best compliment to us, and the proof in the pudding for us is when current owners want to buy another territory and another territory. And we have several that have done that where they've expanded beyond their current their first territory, they own the first one, like, for example, in in 2019 we have owner that acquired their first territory in 2019 out of Louisiana, and now he's up to 12 territories out of five.
John Jurica
That's reassuring, you know, because prospective franchisee, you know that if they're early, too early in the game, they get real nervous, like, Oh, I'm going to be one of the first three of the first five. But if you've already surpassed 50 at one point, and now you've got someone who's got multiple that's very, you know, positive for potential franchisees to consider that. You know,
BarryPatel
yeah, I think that's, that's where a lot of franchisors struggle, is that first couple of years when they're trying to prove out the concept, does this work? Whether it's a restaurant or, you know, all change place, what you name it, the brand is the importance there and then the and the constant in ours, it was more of the process. Has the process been figured out? Our prescriptions generated, our prescription pharmacies dispensing them. Are revenues being made, and now we do have an item 19, which you're familiar with in the Franchise Disclosure Document that does disclose the average territory sales, you know, by different tiers. So once they sign the NDA, get the FDD, they could see, you know, what an average if I found me in the top 50% or top 30% or bottom 30% what am I expected to make? And that at least opens up the dialog with our team to say, this is how you get to the top third, or this is why you might be in the bottom 1/3 and that's important for us to be able to explain and distinguish what makes the difference there.
John Jurica
All right, I have another challenging question now, and so don't take it the wrong way. But the reason I ask is my wife and her franchise, she sold her business after 16 years she was actually in, like the first group that were selling. In other words, the life expectancy for the franchise she was in was a good 15 to 20, years. So they hadn't had a lot of sales or transfers of that too. So if you thought about that, like, what happens after 5, 10, 15, or 20, years, have you thought about the process of how that would be transitioned to someone else if they wanted to sell it, would there be value that could be sold to another purchaser?
BarryPatel
Yes, and, there have been transfers too. So there have been, some owners that have sold their territories, and it could be because this wasn't for them, and they s- found somebody, and they sold it to them, or, "Wow, I've done okay. I can make a little money and, and move on." But it's just like with any other business. If you've built revenues, built a profitability margin, you're able to demonstrate that to any new owner, as long as, , those relationships with those healthcare providers, because there is annuity income, because if you've got a prescriber that you're visiting weekly, and they're used to seeing you, and they're used to, they like the product, they wanna continue to get samples and be, educated on new products and so forth, then that business is gonna continue if, is gonna continue if new owner comes in, especially if there's a warm handoff, and that's gonna continue. That's the toughest part of any business is getting it started and getting anchor clients, if you wanna call it that. And then it does have that ability to be transferred, and that's why, again, it's equity being built in the business.
If you paid 200,000 franchise fee, you wanna at least get that out after making what you've made over, say, five years, 10 years. if that's all you make and, and you've made a good living, then some people are happy with that.
John Jurica
I guess what I would just ask you this question because you've been obviously, an entrepreneur for a long time. You started in kind of a traditional role when you first came out of school, and you probably know a lot of people, whether it's nurses, physicians, pharmacists, that have kind of become unfulfilled, dissatisfied, some of them are burned out, whatever, just frustrated.
So what words of advice do you have for them, as far as, what do you see as options for them, and are there, besides, your franchise and other things, just what general advice would you have for people who are feeling frustrated and, thinking, "I don't know if I can really do anything else"?
BarryPatel
So first in, in general, um, let's divide it up into two conversations. One is If they're frustrated and looking to become an entrepreneur, uh, and build something for themselves because they're that frustrated that, "I've got the sense to know better of how things should be done," then follow your dream. First, find a problem to solve, and there are a lot of problems in healthcare. So find that problem, because when you're on the inside, you're able to say, "What if this was done this way?" And it could be a small, bridge to something bigger, that's the ideal thing, is to really be attentive to what issues need to be solved within healthcare, Now, the other side of it, if they just wanna move away from, patients, the burnout there and the frustration with, the bureaucracy, then just, be prepared because there are, non-clinical positions. But you have to prepare yourself for that, right? And by preparing is not just seeing more patients, but reading and, and listening to podcasts like yours to learn, and constantly have that, filter open to say, "Oh yeah, I heard about this here," and then, then you put two and two together and apply for a role.
Or talk to somebody, "Hey, I offer you this service, as a consultant or anything, you know, while I'm doing this job because I have expertise here?" That, that's where, um, it just, it just takes continuous learning. Continuous learning and we've got so many opportunities and tools to be able to, uh, as, as clinicians, to learn. And I think the insight by being on the inside as a pharmacist, as a nurse, as a doctor, it puts us ahead of the game to be able to say, "I can offer more in a non-clinical position because I've been in there inside of it, and that's why I, I'm there." But then you, y- but it- but don't treat it as automatic.
Go out and build up the knowledge even more, and build a specialty niche in something that you're good at. You don't have to know everything. Just know something, but know it real good.
John Jurica
Yeah, exactly that's great advice. You know, there's so many options out there. And, you know, when I started reading about what you're doing, I was like, "My gosh, here's something I'd never even imagined was happening." And, uh, it's interesting. All right, uh, so the website again is...
BarryPatel
It's galtfranchise.com, and they can- Right ... find out about that opportunity if they're interested.
John Jurica
Is there anything else you want to tell us about Galt Franchise or the the bigger company, or is it, is it all the franchise now?
BarryPatel
No, Galt Franchise, again, is the, is more of the distribution model. Galt Pharmaceuticals is galtrx.com, G-A-L-T-R-X.com. That's where our products and our pipeline... So we do have a pipeline of, of future products more focused in on the non-opioid pain category, 'cause that's where we've... 80% of our business comes from. Okay. There's still choice needed in those patients that are suffering from headaches or neuropathic pain or musculoskeletal pain, and so that's where our focus is. But that's what Galt continuing to do to grow. And as that grows, then the franchise system will continue to grow because we're able to feed products through to that.
We're open to licensing products, to bring them in because we do have a viable distribution model now.
John Jurica
Okay. Well, before I let you go, is there anything I forgot to ask that I should have asked, uh, about with this whole situation?
BarryPatel
No, I think you've covered everything. What you're doing, again, is admirable in giving,, your audience and, and those that are frustrated with some of the day-to-day to be able to just at least allow them to think and, and think of some different ways to apply their hard work that they've had over the years.
John Jurica
I appreciate that. I's guests like you that just share these things, these things that maybe no one's even thought about that just keeps me going. So with that, I guess we'll say goodbye, and maybe we'll get a chance to follow up again in a year or so.
Absolutely. Look forward to it. Thanks, John.
John Jurica
You're welcome. Bye bye.
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John Jurica
Today's guest is a pharmacist who started his career working with large pharma companies way back when, but then, if I reviewed his LinkedIn appropriately, he did some consulting, but now he's been an entrepreneur for quite a while, and he's opened at least one new kind of company as a franchise, which was completely different than anything I've ever seen. So with that, Barry Patel, welcome to the PNC podcast.
BarryPatel
Hi John, thanks for having me on. Appreciate it.
John Jurica
So as I said in that little brief intro, I think that you know, you work for pharma and you're a pharmacist, that's your trained PharmD. Technically, you're a doctor, you know, but I know you don't always get the respect that the medical doctors get. Drives from me crazy more than anybody else. But tell us a little bit about your background, just to get things rolling, you know how you know, how did you start out as a pharmacist, and why? And how did you get to where you are today?
BarryPatel
Yeah, I think just in the same way a lot of physicians go to medical school, they want to, they set out because we want to help people, right? And so I went into pharmacy to go set out in the medical profession to help people, and do it as a pharmacist medications and doing what pharmacists were trained to do over decades ago, which is really work in their communities, talk to their patients and be able to guide them on medication that were prescribed by their physician. So I went into pharmacy school, but then always knew that I wanted to go into entrepreneurs one day, and that's because I grew up in a family full of entrepreneurs. As you know, many families do have that, and then they kind of see that growing up, and that's what they want to do. But I, as soon as I got out of pharmacy school, I went to work for a pharmaceutical company, one of the biggest out there at the time, in the early 90s, and that's Merck, still big, and really was a good learning ground for me, not just to learn about how a pharmacist can function in a non clinical setting, which is a very relative to sort of how your channel here works, but just to actually get a bird's eye view of health care when you're in a pharma company, you get to understand, yes, how a drug is made and how it's sold and how it's works within a population household. But also you get to see the healthcare system through the physicians eyes, insurance company and so forth. And so that was a good start for me, before I then stepped into entrepreneurs. And like I said, I started my first company in the 90s, and then from there on, went on to Galt.
John Jurica
All right, so what inspired you to start Galt? And from what I understand, it does several different things, or is it focused on one particular type of business?
BarryPatel
Yeah, so to answer that question, let me just back up as to the previous company I had, because it does kind of relate. The first company was total therapeutic management. TTM, for short, and I co founded that company, really with the premise of presenting information back to healthcare providers, information that was really buried in medical records in more subjective narrative form back in the 90s. As you may remember, it's all paper based charts. EMR just started becoming popular over the last 1015, years. And so you had to extract that information, make it analyzable, and then presented it back to healthcare providers as well as insurance companies and pharma companies that want to understand what are the outcomes for particular disease states. And so building that company that was a much more of a service oriented business. We were getting contracts by large health systems or by insurance companies or by pharma companies, but it was project by project, right? So which were successful in growing the business and then eventually selling it, and I exited from that business. But then the dream was also always to go into a product business. And so Galt, which I formed with my current partner, Wade Smith, he's also a pharmacist. Is a is a pharmaceutical company that owns products, FDA approved products. And when you end up product business, as opposed to a service business, or any of your audience that looks to get into consulting businesses and anything that's service oriented, you're constantly going to keep pitching for the next product or next project, right? Whereas, if you get a product that can then be annuity based income or the recurring revenue model, if you want to say because now you have a product, you've got a system around it to kind of keep growing. That was the vision. So 2016 when I teamed up with Wade, our first product was Doral. It's a product. It's long acting benzodiazepine that's only indicated for insomnia. And that was our first product, because that was the one that we could acquire, bring it on, and then since then, we've launched several other products that fit our different portfolios and therapeutic areas.
John Jurica
Okay, how does that work? You know, because I think of, you know, massive pharmaceutical companies, biopharma companies, whatever they have, all these giant marketing departments and so forth. How does someone that's in a little niche kind of just be able to get the connections with the providers, get the meds out there? Just explain a little bit of that, because I find that fascinating.
BarryPatel
So typical pharma companies that you're used to even in practice. And I said, you know, you were Chief Medical Officer, so you understand the interactions with pharma companies. They have a big bureaucratic system full of marketing professionals, sales professionals, so that's how they get the education and then distribute through supply chain channels, which are typically the independent pharmacies or chain pharmacies and inpatient setting, the inpatient pharmacies. So there's a strong supply chain setup already through wholesalers. So the way Galt does it, and the reason why we're different, and why we why we really founded the company to be different, is because there needed to be change in the industry. So the first thing we do is we go through a limited distribution model. We only distribute our products through independent pharmacies, community independent pharmacies. We bypass the wholesalers. We don't go through the big three, McKesson, Cardinal and ABC, because everywhere you look within healthcare, there are middlemen that are going to take a little bit of the the amount along the way, so more you can eliminate and go directly to the end seller, in this case, the independent pharmacist, then you're going to cut out a little bit of the fat. So that's that's what's different with the Galt pharmaceutical model, is distribution locally through independent partnering with independent pharmacies and then working so that way, they understand what it takes to make sure the patient gets the medication for the least cost. Because insurance is a reality. Every product almost today requires prior authorization, unless it's a, you know, 234, dollar generic, and so the independent pharmacy or the pharmacist needs to be much more intimately involved in making sure that patient knows that and works with the doctor's office to collect notes if needed, and submits all that to the insurance company. And so that's another part of the model that we've created to ensure that that all patients get the medication they're prescribed through that process, and if they can't, if the insurance still doesn't cover it, we have a low cash price of $45 for anybody where the patient pays that, and basically the pharmacy dispenses it for them. So that way they don't, you know, have to go without that. So that's the pharmaceutical piece of it. The other unique thing about Galt, we have a franchisor system too. So Galt pharmaceuticals and then there's a franchisor system called Galt franchise systems. Galt franchise systems is technically our sales force. So instead of hiring an army of Salesforce, we have franchised the sales function, so that way an entrepreneur in a local territory can acquire the exclusive rights to promote our products. Now the key thing is that they get trained on not just the product and everything else, but also the compliance aspect. We're highly regulated industry, so they need to know what they can say, what they can't say, what they can pay for, what they can't pay for, because there's a lot of financial, you know, relationships that cannot occur in these in these discussions, as it relates to anti kickback statutes and so forth. So they're educated on that and monitored for that, but also they don't have to worry about everything else a pharmaceutical company does, the manufacturing, the supply chain, the you know, the it and everything else, the data we provide, all the support for that part of it. So they're basically walking into a business as a franchisee to run it as a sales professional, and doing a revenue share with Galt. So that way that serves as our, our sales force.
John Jurica
You know, as I was starting to think about this, and I just saw what you were doing, I thought, wow, you know, you've got these huge companies, and now you've got this little niche for these particular meds that you have. But the reality is, now that we're talking is when I'm in my office seeing patients, which I don't do anymore, but when I was there's usually the rep is representing one or two drugs at the most, a lot of times, at least, to the provider, the face to face provider, medical provider. So really, one of your reps, whether they're franchisee or not a franchisee, I mean, to the physicians, or maybe to the pharmacy. Pharmacies, you know, it's just another rep coming in with a drug or set of drugs that we think we might want to carry. Is that kind of true? The way I'm looking at it,
BarryPatel
you are. You're looking at it correctly in on the surface, that's That's true. They are. They're another representative for the company that's representing the product, but our owners, our franchisees and their reps are basically trained to really promote the fact that they are a small business. They're a franchisee that's part of a bigger organization. And I think that, you know, endears them to a lot of physician practices that, wow, that's that's another small business owner just like me. They're not going to buy me a huge lunch and take me to dinner like these big pharma companies might do. They're going to be here to provide value, which is education, products, maybe samples, if patients need it, and be there for me to ensure that that patient gets the drug by making sure that the right pharmacy has stopping the drug and all of that. So yes, on the surface, you're right, but I think what we do is go deeper with our relationships with our health health care providers, because that franchisee technically owns those zip codes and territories. So in within Chicago, I know that's where you are. There's seven different territories in the Greater Chicago area. So if I own the South Chicago territory that I I know what's going on in there, and I can choose that I want to work with only 20 to 25 healthcare providers and go deeper with them, as opposed to going across to probably 1000 prescribers that are in that in that territory, they can go to all of them by layering on other reps. But our model is you can't effectively manage 200 healthcare providers for one person and be good at it. We have to go deeper, rather than wide. So that's the difference that you'd probably see if you met with one of our Galt franchisees or their reps.
John Jurica
All right now, you know, who knows? I may have some pharmacists listening to this, you know, it's mostly physicians, but there's always overlap, you know, some other healthcare providers and that. So what's the advantage to the franchisee? You know, I can imagine what it would be, because my wife was a franchisee, and so she kind of knows, and I know, through her, but why would I want to do that as a pharmacy rep or, you know, working for a big company or something?
BarryPatel
Well, so one is that own your own business, building equity in your business, just like your wife did. And number two, obviously, the income potential is going to be up to you, not up to your corporates, leadership and sales targets changing from one year to the next because, oh, well, I exceeded them, and now look, I got a new target. So this is nothing changes with that. It's just however many prescriptions are generated based on your efforts through your sales efforts, then that's going to keep going up based on however many so if you want to layer on more reps within your territory and build it that way, then, then you have the ability to do that. But the other thing is, we put a system around it, every franchise, every good franchise system anyway, and I'm not sure which one your wife is part of would have great support and engagement and education, continuous training, continuous sort of new tools, resources, data, it whatever it might be, and that's going to be because, not because a pharma company won't provide, I mean, of course a pharma company will provide that too, but our success is based on the success of our franchisees. So the more that we're able to do that for them and make them successful, then the more we're going to be successful. So it's innately, that's what we need to do. So the system is very important.
John Jurica
Yeah, definitely. You know, I'm assuming that a lot of the skills that they would need and would apply would be the same skills working for a larger company. But are there some other nuances to it, just that maybe, if, again, and there's a pharmacist or someone else who wants to help invest in something like this, would that you do that makes it a little easier or a little more straightforward to get to that next sale?
BarryPatel
Yeah again, it's what's needed in any entrepreneurial business, is the drive to succeed and be resilient, to get across through any obstacles, because within anything within healthcare is going to come up with, there's going to be challenges and barriers, whether it's, you know, access to a healthcare provider or or even insurance barriers and things like that. So they have to have that resilient mindset, and that's, I think, more of a characteristic than anything else. But other than that, I think having a little bit of sales experience, so even if they're not going to be going out doing the sales but to be able to understand how sales works, and I'm going to be able to better manage a sales person that needs to function in this type of environment that's highly regulated, so I can make sure that they're doing things by the book compliant. So some things so help. It's helpful to have somebody in the healthcare field to know that the do's and don'ts and things like that, if they're at least going to be managing somebody to do that. So pharmacists, you mentioned pharmacists. We do have pharmacists that are franchise owners. They own an independent pharmacy. This is a total separate complementary business, because their sales function is done by a sales rep. They serve as a pharmacy as and they're not the only pharmacy within the territory. There could be others, but they'll get credit for wherever that whichever pharmacy dispenses that product. And so technically, it's the first time a pharmacist can actually make money off a prescription going to their competitor pharmacy. Because they're they've got a salesperson that's in charge of the products. But, yeah, I think it's, it's definitely something that is different and unique. But though those are the key characteristics, is just having a little bit of that that drive
John Jurica
what we talked a little before we turned the recording on. But let's say there was a physician who was retired, or maybe, you know, I've had other physicians who are disabled and they can't practice anymore. Maybe could they partner with a pharmacist if they, you know, wanted to do something like this? Is that even an option for a franchise.
BarryPatel
So again, going to the anti kickback statutes, we steer very clear of health care providers that have any prescribing authority to be involved in the franchise system, just because that's a conflict of interest. Obviously, if it's a provider that has is not licensed and isn't practicing and doesn't have any influence themselves to prescribe and and generate prescriptions themselves, then they'll still go through our process of application and, you know, interview to ensure that, because the most important thing for us is compliance, because now we're handing off a sales function to a third party entity, a franchisee, so when something's never been done before, then there's, you know, extra scrutiny on it. So we're going to be careful with who comes through, but if they meet that criteria, where they they're they're business people, they went to medical school that wasn't their fault, that they can't we don't want to hold it against them, but as long as we're confident that there's no relationship to to be able to drive prescriptions or do their own so partnering up with somebody is easier from that standpoint, because they can't prescribe or they can even own it, but maybe they don't want to go out and do the Sales. But as you know, healthcare providers, physicians, have colleagues and a good network that they can leverage because the respect that they've built over time, and so I think that's that's worthy of consideration, right there.
John Jurica
Okay, so since we're talking about the franchise, can you give us the website where someone would go if they're interested in learning more about that,
BarryPatel
sure Galt, G, A, L, T, and then the word franchise, F, R, a, n, C, H, I, S, E, franchise.com and on that site, they'll have information on where there's an interactive site With all the states and where we have territories available, as well as what the process is to kind of become a franchisee. Again, we're very picky. I hate to say it that way, but on who we let into our system, because we want to make sure they're serious about it. Have a good business plan in place, and yes, they are. There are no compliance risks or anything like that. Once they go through the process, then, you know, there's a lot of tools on that site for them to learn videos and press releases and media and things like that that they can go to and see to learn more about it.
John Jurica
And then, basically they have to do a non disclosure agreement, and then get the whole buried in paperwork that you're going to send. That's all the legalese that's in there, right?
BarryPatel
Yep, your your wife knows very much about the legalese that a Franchise Disclosure Document, franchise agreements and so forth. But yeah, before that process, we have a questionnaire, and then there's a discussion and interview and an NDA and all of the process. And then we encourage a site visit. We're based here in Atlanta, and Atlanta is a great place to come, especially in the winter.
John Jurica
Yeah.
BarryPatel
But anyway, they get to meet the team. They get to see who is actually part of helping to support the franchise system. You know, because they're going to be investing sometimes up to $200,000 is what the franchise fee is. And so that's where the skin in the game comes into play, right? If, if you're just hired as a sales rep with no skin in the game, then you don't have as much intensity to want to say, Okay, well, I could just get another job. Well, in this case, you're all in, you put a significant amount of money, so now I'm going to make this work, and that's why that's there. Now as far as other costs, there's no real other costs like, I think the same thing with your with the with the other franchise opportunities, where you don't need a brick and mortar office, then there aren't really those costs involved. It's really just getting operational with a sales rep and training and things like that.
John Jurica
Is there, are there other employees? Is it a one person show or they, you know, are you said you could actually have other sales people, but, or does it really, is the over, you know, the management of it fairly straightforward to where you don't need a lot of staff and that kind of thing.
BarryPatel
Yeah, it's pretty straightforward. I mean, we have a lot of owner operators, where they own it, and they're the ones out doing the sales, and their sky's the limit for them in terms of how hard they work. But then you have others that are owners, and they like to oversee and manage and not can go out in the field. We ask each even owner, to get certified to learn about the products and know what it takes to be a sales people, if the person, if they, even if they don't go out there and they like to just oversee, manage, hire and then ensure that their business is running smoothly. So either way. But besides that, because galp has a marketing department. We have medical affairs department, you know, we have it. They don't need to really invest in those kinds of personnel.
John Jurica
Oh, cool, that's good. I'm just love to ask questions about franchises. I think it's just instructional for anybody that might be thinking of doing any franchise. But if you don't mind, when did you start? You know, like with your first franchisee. And if you don't mind sharing about how many you have or what states are covered and not covered, just to give us a sense of the penetration and what might still be available for people.
BarryPatel
So there are total of 500 territories across the US, and we've got 450 still empty, meaning about 50 to 55, that we've got activated,
BarryPatel
And we started that in 2018 we went up all the way to 70, but trim back down. You're thinking, how did that happen? Well, there are some territory owners that this doesn't make sense for so, you know, mutual, mutually, we've terminated along the way somewhere, but these are the the ones that are still in the system. There's that's about 26 different owners that are part of that. So that you do see that we have some that have multi territories. And actually the the best compliment to us, and the proof in the pudding for us is when current owners want to buy another territory and another territory. And we have several that have done that where they've expanded beyond their current their first territory, they own the first one, like, for example, in in 2019 we have owner that acquired their first territory in 2019 out of Louisiana, and now he's up to 12 territories out of five.
John Jurica
That's reassuring, you know, because prospective franchisee, you know that if they're early, too early in the game, they get real nervous, like, Oh, I'm going to be one of the first three of the first five. But if you've already surpassed 50 at one point, and now you've got someone who's got multiple that's very, you know, positive for potential franchisees to consider that. You know,
BarryPatel
yeah, I think that's, that's where a lot of franchisors struggle, is that first couple of years when they're trying to prove out the concept, does this work? Whether it's a restaurant or, you know, all change place, what you name it, the brand is the importance there and then the and the constant in ours, it was more of the process. Has the process been figured out? Our prescriptions generated, our prescription pharmacies dispensing them. Are revenues being made, and now we do have an item 19, which you're familiar with in the Franchise Disclosure Document that does disclose the average territory sales, you know, by different tiers. So once they sign the NDA, get the FDD, they could see, you know, what an average if I found me in the top 50% or top 30% or bottom 30% what am I expected to make? And that at least opens up the dialog with our team to say, this is how you get to the top third, or this is why you might be in the bottom 1/3 and that's important for us to be able to explain and distinguish what makes the difference there.
John Jurica
All right, I have another challenging question now, and so don't take it the wrong way. But the reason I ask is my wife and her franchise, she sold her business after 16 years she was actually in, like the first group that were selling. In other words, the life expectancy for the franchise she was in was a good 15 to 20, years. So they hadn't had a lot of sales or transfers of that too. So if you thought about that, like, what happens after 5, 10, 15, or 20, years, have you thought about the process of how that would be transitioned to someone else if they wanted to sell it, would there be value that could be sold to another purchaser?
BarryPatel
Yes, and, there have been transfers too. So there have been, some owners that have sold their territories, and it could be because this wasn't for them, and they s- found somebody, and they sold it to them, or, "Wow, I've done okay. I can make a little money and, and move on." But it's just like with any other business. If you've built revenues, built a profitability margin, you're able to demonstrate that to any new owner, as long as, , those relationships with those healthcare providers, because there is annuity income, because if you've got a prescriber that you're visiting weekly, and they're used to seeing you, and they're used to, they like the product, they wanna continue to get samples and be, educated on new products and so forth, then that business is gonna continue if, is gonna continue if new owner comes in, especially if there's a warm handoff, and that's gonna continue. That's the toughest part of any business is getting it started and getting anchor clients, if you wanna call it that. And then it does have that ability to be transferred, and that's why, again, it's equity being built in the business.
If you paid 200,000 franchise fee, you wanna at least get that out after making what you've made over, say, five years, 10 years. if that's all you make and, and you've made a good living, then some people are happy with that.
John Jurica
I guess what I would just ask you this question because you've been obviously, an entrepreneur for a long time. You started in kind of a traditional role when you first came out of school, and you probably know a lot of people, whether it's nurses, physicians, pharmacists, that have kind of become unfulfilled, dissatisfied, some of them are burned out, whatever, just frustrated.
So what words of advice do you have for them, as far as, what do you see as options for them, and are there, besides, your franchise and other things, just what general advice would you have for people who are feeling frustrated and, thinking, "I don't know if I can really do anything else"?
BarryPatel
So first in, in general, um, let's divide it up into two conversations. One is If they're frustrated and looking to become an entrepreneur, uh, and build something for themselves because they're that frustrated that, "I've got the sense to know better of how things should be done," then follow your dream. First, find a problem to solve, and there are a lot of problems in healthcare. So find that problem, because when you're on the inside, you're able to say, "What if this was done this way?" And it could be a small, bridge to something bigger, that's the ideal thing, is to really be attentive to what issues need to be solved within healthcare, Now, the other side of it, if they just wanna move away from, patients, the burnout there and the frustration with, the bureaucracy, then just, be prepared because there are, non-clinical positions. But you have to prepare yourself for that, right? And by preparing is not just seeing more patients, but reading and, and listening to podcasts like yours to learn, and constantly have that, filter open to say, "Oh yeah, I heard about this here," and then, then you put two and two together and apply for a role.
Or talk to somebody, "Hey, I offer you this service, as a consultant or anything, you know, while I'm doing this job because I have expertise here?" That, that's where, um, it just, it just takes continuous learning. Continuous learning and we've got so many opportunities and tools to be able to, uh, as, as clinicians, to learn. And I think the insight by being on the inside as a pharmacist, as a nurse, as a doctor, it puts us ahead of the game to be able to say, "I can offer more in a non-clinical position because I've been in there inside of it, and that's why I, I'm there." But then you, y- but it- but don't treat it as automatic.
Go out and build up the knowledge even more, and build a specialty niche in something that you're good at. You don't have to know everything. Just know something, but know it real good.
John Jurica
Yeah, exactly that's great advice. You know, there's so many options out there. And, you know, when I started reading about what you're doing, I was like, "My gosh, here's something I'd never even imagined was happening." And, uh, it's interesting. All right, uh, so the website again is...
BarryPatel
It's galtfranchise.com, and they can- Right ... find out about that opportunity if they're interested.
John Jurica
Is there anything else you want to tell us about Galt Franchise or the the bigger company, or is it, is it all the franchise now?
BarryPatel
No, Galt Franchise, again, is the, is more of the distribution model. Galt Pharmaceuticals is galtrx.com, G-A-L-T-R-X.com. That's where our products and our pipeline... So we do have a pipeline of, of future products more focused in on the non-opioid pain category, 'cause that's where we've... 80% of our business comes from. Okay. There's still choice needed in those patients that are suffering from headaches or neuropathic pain or musculoskeletal pain, and so that's where our focus is. But that's what Galt continuing to do to grow. And as that grows, then the franchise system will continue to grow because we're able to feed products through to that.
We're open to licensing products, to bring them in because we do have a viable distribution model now.
John Jurica
Okay. Well, before I let you go, is there anything I forgot to ask that I should have asked, uh, about with this whole situation?
BarryPatel
No, I think you've covered everything. What you're doing, again, is admirable in giving,, your audience and, and those that are frustrated with some of the day-to-day to be able to just at least allow them to think and, and think of some different ways to apply their hard work that they've had over the years.
John Jurica
I appreciate that. I's guests like you that just share these things, these things that maybe no one's even thought about that just keeps me going. So with that, I guess we'll say goodbye, and maybe we'll get a chance to follow up again in a year or so.
Absolutely. Look forward to it. Thanks, John.
John Jurica
You're welcome. Bye bye.
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