In this episode of Healthcare Americana, join host Christopher Habig and Dr. Kenneth Chahine, the founder and CEO of Nectar Allergy. Dr. Chahine shares his journey from the world of consumer DNA testing to disrupting the field of allergy care. With a background in biochemistry, genetics, and law, Dr. Chahine brings a unique perspective to healthcare innovation.
Discover how Nectar Allergy is revolutionizing the way allergy care is delivered in America, making it more accessible, convenient, and patient-centric. Learn about the challenges in the allergy care industry and how Nectar Allergy is breaking down barriers to provide effective treatment options for millions of allergy sufferers.
Dr. Chahine discusses the importance of combining great science with a great consumer experience and shares insights on how Nectar Allergy is addressing the needs of both patients and healthcare providers. Find out how physicians can collaborate with Nectar Allergy to offer innovative allergy treatments in their practices, ultimately improving patient outcomes and experiences.
Join us for an engaging conversation about the future of allergy care and how Nectar Allergy is leading the way in transforming the healthcare landscape for the better.
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Christopher Habig: Welcome to Healthcare Americana coming to you from the fabulous FreedomDoc Studios. I am your host, Christopher Habig, CEO and co-founder of Freedom Healthworks. This is a podcast for the 99% of people who get care in America. We talk to innovative clinicians, policymakers, patients, caregivers, executives, and advocates who are fed up with the status quo and have a desire to change it. We take you behind the scenes with people across America that are putting patients first and restoring trust in American healthcare.
One topic that’s always been very near and dear to me as a relatively new parent is the topic of allergies. It feels like everybody has something to say or experience when it comes to allergies, whether it’s seasonal, whether it’s medicinal, whether it’s foodborne. I can’t walk into a restaurant without somebody asking me, “Do you have any food allergies?” Obviously, being a parent, it’s every parent’s worst nightmare to discover a peanut allergy. How’s that going to affect airline travel, dairy or egg allergy? What do we do? How do we compensate for this? My guest today, joining us here on the show, Dr. Ken Chahine founder and CEO of Nectar Allergy. Ken, welcome to Healthcare Americana.
Dr. Kenneth Chahine: Thank you for having me.
Christopher: Now, nectar, self-proclaimed changing the future of allergy care, allergy testing, what does that mean to our listeners?
Dr. Chahine: Allergy care is completely broken. It’s not the only part of the healthcare system that’s broken. There’s plenty of things broken. This one is something that’s absolutely broken and something where we saw an opportunity to change it and, truly, it’s not overstating to say that we’ve wanted to reinvent the way allergy care was delivered in America. One of the things that convinced me early on was an MPS score. You might be familiar with it. Our Net Promoter Score [unintelligible] score 1 to 10. How likely I would recommend. In allergy care, it was a -69. Let me just put this in perspective. It’s like going to the dentist and feel like that was a ride in Disneyland. It’s so far off even the worst experiences that we just couldn’t believe. We repeated it three or four times.
We got the same thing. We really set out to say there has to be an advocate for the consumer. Who is the one who’s actually thinking about the consumer and then working backwards to provide the care that you want? The answer is no one. You have pharma with pills and they’re just pushing pills, and you have physicians and allergists that are, look, they’re doing their best and they’re small practices. It’s a very fragmented market. Who’s going to have, the economies of scale and and size to say, okay, this is broken how do we build it from scratch? In a nutshell, that’s really what we set out to do. We could talk about the specifics, but that is really the goal here. It’s a very audacious goal, but we feel like we’ve got the right team and the right problem ahead of us to try to solve it.
Christopher: I definitely want to dive into those specifics because I think somebody listening from the medical world is saying, okay, I’ve heard this before. They’re going to come in, they’re going to do the typical allergy test. I’m going to give them the different antihistamines, all these blockers to try to treat these. How do you differ in your mindset when you hear something like that, and you’re just saying, just a horrible, horrible net promoter score. A horrible patient experience, a horrible customer experience. It’s what people are used to. How are you actually changing that to say, “Wait a minute, doctor, that doesn’t have to be the case at all”?
Dr. Chahine: Yes. Look, allergy care, we are comprehensive allergy care. We have virtually online. At my nectar.com we offer immunotherapy, which I’ll explain in a minute. We also have an allergy clinic that we just opened in New York City right by Union Square, reimbursement, the whole thing. It’s an allergy clinic. Let me just focus on one aspect of one therapy and then we can expand from there. An allergy by definition is that you are overreacting to something in the environment that you shouldn’t, okay? You shouldn’t overreact to ragweed, you shouldn’t overreact to peanut protein, you shouldn’t overreact to any of these things, but you do. What that means is it’s almost like you’ve been vaccinated to peanuts or been vaccinated to pollen. When you see it, it attacks.
What we have to do then is how do we reverse this? We’ve known this for over 100 years, that like a lot of things in life whether it’s a crying baby or something else, I grew up on Broadway in Washington Heights, and I got used to the car traffic, and I would sleep like a baby. It didn’t bother me. I was desensitized to that noise. Humans are amazing at this. If you start with really low doses and gradually escalate the doses, your body’s like, “Oh, I shouldn’t freak out about peanut protein,” and then those antibodies go back down. When you see the protein again, there’s nothing to react to it. In the United States, they’re commonly known as allergy shots. Everyone hates it.
Kids, I can’t even imagine. The way it’s done predominantly in the United States is you go to the doctor, they give you a skin prick test, which is basically on your arm. They’re like, “Holy mackerel, you’re allergic to X, Y, and Z. We’re going to put you on allergy shots.” They take the things that you’re allergic to and start injecting it. Now you have to dose up. With shots, you have to be in the clinic three or four times a week. You have to wait 20, 30 minutes to make sure there isn’t a reaction. It’s painful. Imagine a kid trying to do this. Look, the number also speaks for itself. 88% of the people that are recommended allergy shots either start and quit or are self-aware enough to know they’re not going to go through the process.
Basically, that just doesn’t work. You have 120 million allergy sufferers, probably 60, 70, that would be basically clinically could benefit from immunotherapy. You’ve got 2 million people at any one time. You saw this, how are you going to solve this? Well, 30 years ago, they started doing something a little different. It started because of safety concerns from shots. It was called [unintelligible] immunotherapy, but sublingual. What if you gave the same allergens that you’re injecting, but underneath someone’s tongue? Lo and behold, it works. Of course, again, let’s not talk about all the pervasive incentives in healthcare, but because in Europe, their healthcare system is different, 50% of the market has already transitioned to sublingual, and we’re completely stuck in the dark ages.
I joke just like wine, espresso, bottled water, soccer, eventually, it’s going to come over and we’re the ones that are going to bring it over. They’re just ahead of us right now, and we’re bringing it over here. Basically, if you go online, we test you. We do a blood spot because I can either measure the antibodies or I can make your skin react. Either way it’s the same thing. We compound. We have our own pharmacy. Here’s another example of disruption or whatever. We tried to go to pharmacies, none of them could do what we wanted. We said we’re going to have to do our own pharmacy because we can’t deliver the care we want to deliver with the pharmacies and the antiquated ways that they’re doing it. We have our own compound pharmacy that’s licensed in 46 states already, but we’re licensed all 50.
You get tested, we say you’re allergic to X, Y, and Z, we compound for you what you’re allergic to, and then you start dosing a drop a day and over time we escalate the dose. You don’t have to do anything. We do it for you. You just do a drop underneath your tongue and over time you became tolerized. The same thing happens in the clinic with food. We’re going to eventually do food virtually, but we’re starting in the clinic and it’s fantastic because the safety profile is better and it’s really effective. That’s just one example of one innovative technology that’s going to change the way you think about allergy treatment.
Christopher: It’s fascinating because, to me, you’re like, look, there’s a proven model. Other people are doing this, not just in the United States, but overseas. Yet you talk about barriers to this innovation. Are we talking about the fact that insurance companies refuse to cover this type of stuff and that’s why people don’t pick it up? What does it actually mean from a payments obstacle?
Dr. Chahine: Absolutely reimbursement sadly is a major barrier. Look, I’m not going to say that physicians are poorly incentivized. The truth is that there is good reimbursement for the shots and there aren’t for the drops. Not yet. I say not yet because that’s something that we’re starting to do clinical trials, for all of that to show to the healthcare insurers.
That this is something that you should cover. Again, when a fragmented market, when there aren’t incentives, who’s going to get that done? It’s going to be us. We’ll get it done and then it’ll be reimbursed and then everyone will be super happy and offer it.
Christopher: Well, talking with mostly cash pay proponents in healthcare, I think you’re going to have a friendly audience with that message for sure. Medical care and everything else that comes along with, it’s always cheaper when you pay with cash. What just resonates with me and what you’re saying is you know what? We’re not just trying to get out here and just have people treat and maintain their allergies. We’re looking at a way to help people be cured of those allergies and how to overcome it and I think that is just so powerful that not enough of US healthcare has that type of a mindset.
Dr. Chahine: People want an annuity. It’s better to manage symptoms than it is to just try to get rid of the underlying problems. Look for us as a starting company, there’s 120 million people. There are millions of life births a year. When you start acting eczema, environmental allergies, food allergies. When environmentals get bad enough you get asthma. Christopher, 60% of asthma is called allergic asthma, which means that the asthma is triggered by something in the environment, dust mites, pollen, et cetera. If you can get that under control, there are several organizations worldwide that have said that that is a line of treatment so that you’re basically dealing with the underlying cause of the asthma.
There’s so much we can do here. I think just to switch a little bit on another innovative piece that we’ve done, which frankly I don’t think is rocket science, but it feels like rocket science, is we opened a clinic in New York City. One of the things that we recognized from the very beginning is that one of our customers are children. Now, you’re like, okay. You’re like, no, no. Think of the experience. You said you have two young kids. Mine’s older. Imagine saying, “Hey, we’re going to the allergy doctor so that he or she can inject you, and then you’re going to have to sit in a cold metal chair for 30 minutes without disrupting other people.” That is crazy.
Christopher: No way. Impossible.
Dr. Chahine: Exactly. So, how about, let’s go to that place where you could basically take a drop underneath your tongue and they put you in that really nice room with the PlayStation and the TV that has soundproof windows or doors so that we can observe the children, but they don’t know they’re being observed and they’re doing what they’re doing, no one else is getting disturbed and everyone’s happy. Look, that sounds funny, but that’s good for the consumer, the child, that’s good for the mom or the dad who’s taking them, and they’re getting the treatment they need. The truth is, little things like that, like thinking about who your consumer is and how to make it a good experience for them is huge.
For food where food primarily, adults get it as well, but you get food allergies two or three times more prevalent in children, today what they do for food allergies is you have to take a little bit of what you’re allergic to and it wrecks your stomach. Imagine if you have a peanut allergy, I’m saying take peanuts. It wrecks your stomach. The adverse ones are terrible. Kids don’t want to eat it. By the way, peanut is easy. I remember asking an allergist, I said, “Peanut’s fine.” I said, “But what if you have a shrimp allergy?” They’re like, “Oh, it’s not a big deal. You just do grounded dehydrated shrimp.”
I was like, “This person’s just in a different planet.” This idea that you’re like, “Oh, here’s your daily dehydrated shrimp,” he doesn’t have kids, he is in a different planet. He is not thinking like a consumer. I’m like, “How about we do that in a drop and the only question you ask the kid is would you like bubble gum or fruit punch?” I bet you that sells way better. These are the little things that we’re doing that I think are going to really transform the market.
Christopher: It makes a ton of sense. I’m sitting here laughing because what you just said right there is like, why would somebody want to put themselves through more pain in order to get better? I’m like, “We hear this about exercise a lot.” Every doctor’s going to be like, “We need more exercise,” and someone’s like, “I just went to exercise and I’m really sore. I can hardly get up the stairs for three days. Why would I want to go do that again?” You got to get over the hump to do it. A super simple example, but you’re exactly right. It’s not quite gamifying it, but it makes it more approachable for that.
I don’t want anybody sitting here thinking I’m advocating for a special drop under your tongue to get you back into shape, but from this standpoint, from an allergy standpoint, it just makes an absolute ton of sense and you’re meeting people where they are. Go back to my previous point, my previous question, I always find it’s very interesting when a company comes out and says, “Look, if we are super successful, I’m not going to have a customer anymore.” I think that’s really powerful. I like doing business with those types of companies because it’s not just somebody who’s going to just sit there on the treadmill and just completely soak each other.
Like you said, I soak people up, like you said, build an annuity from that. Very much kudos to you. Now, you do have an interesting background, and I do want to touch upon it because I don’t want somebody listening and saying well why should I listen to Ken because he just out here has this weird European view of allergies and how we currently exist in the United States. You’re bringing one hell of a pedigree from here looking at this, and it’s like, “Well, Ken’s one of the people who I would trust to actually build up his own compounding laboratory.” Give us a little peek behind the scenes of really what got you in this position.
Dr. Chahine: Look, I’ll start quickly. I’m, as you said, PhD in biochemistry and genetics. Did a lot of the early work there. Became an attorney and a patent attorney, did a lot of writing for nature biotechnology when insulin and erythropoietin and human growth homeowners coming out, everyone was suing, no one knew how to deal with that. I was there in the forefront and then ended up looking at an opportunity at ancestry.com. 10% of the US population has taken an ancestry DNA test. Not to go, that was me. A lot of people say, “Oh, I started that.” I really did. I got the domain name “ancestryDNA” on my second day.
I really did do it. We had a very similar problem. It’s a playbook at Nectar that’s the ancestry playbook that we dusted off. Let me explain to you what I meant by that. It’s been so long now that we have forgotten that when I started AncestryDNA, only men could take a DNA test because we tested the Y-chromosome. The women were getting their brothers and fathers to get tested, and you’re like, “Okay, guys, apart from the fact that women also have DNA, that’s half of the market. This is silly.” I hired a professor from Stanford. She was female. She solved that problem.
The other thing that we had was the only thing a DNA could test you if you were primarily European, Asian, or African. To be a little bit funny to the team, I would say that’s primarily a mirror. If you wanted to get someone to buy a genetic test, we got to have to do a little bit better than that. What we did was we actually went out for the first time and said, “Can you break Europe into Ireland, the UK, Germany and France?” No one had ever done any of that before. All of that, I’m going to put in the category of we’ve got to improve the science. The science was not where we needed it to be, and so the first part. Here’s the thing, talk about healthcare and even more broadly, healthcare.
I always have this sense that if you have good science, it’s a crappy user experience, and if it’s a great user experience, it’s snake oil. I’m like, no, there’s nothing that says you can’t have them both. I have no rule. There’s no Murphy’s rule or anything like that that says you can’t have both. I’m like, “Okay, we’re going to fix the science.” Then all the tests at the time were saying you are a J2 half of that type, which I am. I’m like, “Listen, I know what a half of that type is, but I don’t even know what a J2 is.” Let me tell you what I do. I go to Google and then Google sends me to Wikipedia. I’m still too lazy to actually read all that text. I scroll until I find a picture.
I click on the picture and I go, “Oh, yes, that’s where my dad’s from.” Guess what we’re going to do? We’re going to put the map in the product. Everyone’s like, “What?” Let me put it this way. Google, yes, existed, but Google Maps was still not even the major one. We were using Bing at the time. We put the map in there. The other thing is we got rid of all the jargon. I remember one of the funniest conversations we ever had. We were like, “What are you going to call it?” Because all of the early adopters had these crazy names, I don’t know how many marker. We’re going to call it a DNA test. The team’s like, “What do you mean?” I’m like, “We’re going to make it simple for the consumer. Let’s not complicate it.”
Look, long story short, we created a great consumer experience and great science. Together, we took a market that when Ancestry was bought by one of the private equity firms, said it was valued at $10 million, and it’s probably a $2 billion market. That’s the magic of getting good science and a good experience. When you marry those two together, magic happens. That’s the magic of trying to do a Nectar. We got great science, we’re trying to make this easy for the consumer, and we’re trying to make magic again.
Christopher: Ken, I want to dive a little bit more into that, like how you marry all these different skill sets and different experiences, because I think there’s a lot there, and I think that’s where we’re going to the future of healthcare. We’re going to take a quick break, hear back from our fantastic sponsor, FreedomDoc. Physician burnout is a killer. It’s driving our best and brightest out of medicine. The only solution to burnout is to be your own boss. Easiest way to be your own boss is to join the FreedomDoc physician network. FreedomDoc is a unified brand that will fully finance your practice so you can enjoy a healthier lifestyle, take better care of patients, and spend more time with your family.
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Once again, we are talking with our special guest, Dr. Kenneth Chahine, with founder and CEO of Nectar Allergy. Ken, we’ve been talking the previous part of this episode about really what Nectar is, how the innovation’s coming to us, even some barriers, and then bringing in some previous experiences. You are talking about your experiences from the world of DNA testing, consumer DNA testing, trying to figure out where people are from.
How much of that experience did you use moving forward to say, “You know what? We can not only look and see what is under the hood on people and figure out where their ancestors came from,” which is very cool. I’m a customer, I nerd out on that stuff. When was that light bulb moment where you’re like, You know what? Maybe we can use the same type of mindset and similar technology to help people understand medical implications, where we can actually help people heal themselves by understanding the smallest building blocks within their bodies?
Dr. Chahine: Yes. We launched Ancestry DNA, and then we launched another product called Ancestry Health. That was really part of the vision from the very beginning. I think that what we recognize is the rapacious pricing in healthcare is the other thing that’s crazy. I remember still trying to buy a little tube that collected saliva. I talked to the guys that were selling it and they’re like, “It’s $20.” I’m like, “It should be $0.20.” They’re like, “Yes, but it’s for healthcare.” I’m like, “It’s for saliva.” I remember having– Look, I’m a New Yorker, so excuse me if I sound like a New Yorker sometimes.
I’m like, “Listen, the last device that I got to the FDA was a catheter that went up someone’s liver and delivered a virus so that if you don’t think that I can actually basically get approval for a plastic tube that’s going to collect someone’s saliva, you’re crazy.” They basically called my bluff and we went out and developed our own device that ended up being much better. My point is I’m not afraid to, and I joke with the team, let’s be rebels with a cause. We don’t look at something and just blow it up because we don’t like it. We’re like, “Hey, that works pretty well, let’s grab it.” Then whether it’d be the pharmacy or by the way, the diagnostic test for testing for allergies was a disaster. We had to fix that.
At the end of the day, to answer your question, it’s like the playbook really was there. I think you just need to move a little bit higher a notch and you realize the principles were still there. You need a great science. You need a great consumer experience and anything that’s in your way of delivering either one of those, sometimes you just got to do yourself. Especially I didn’t do much of that. We have great partners in the [unintelligible]. In allergy care, there hasn’t been the equivalent partners and so we’ve had to do a lot of it ourselves.
Christopher: It’s fascinating. Again, I’m sitting here just smiling and laughing. I think everybody out there understands that there’s a doctor price. If you try to even get a plumber to come over and they find out you’re a doctor, well, guess what? That bill just went up. Finding office space like, “Oh, this is medical space. Go ahead and add another $10, $15 a square foot on top of that because it’s a doctor or a dentist or anything like that.” Very real examples. I think a lot of people are still there saying, “Oh yes, you got the healthcare price for sure.”
What in the world? Because there’s perfect examples of substitutes that work for pennies on the dollar like you’re talking about. Again, I’m laughing about it, but kudos to you on this side of it. Now, growing up, allergy has been something that has been part of your life and so I can definitely understand the connection to that. When did you finally be like, “You know what, I’m so tired of taking these medications. I’m going to go out and figure out a better way to do this.”
Dr. Chahine: For me personally, I grew up in New York, as we’ve mentioned a couple of times, and had horrific allergies. When I went to graduate school at the University of Michigan, things just exploded. It seemed like it got worse and also part of my childhood was in Florida really bad. Now, I remember finally going into an allergist and they used to do skin percolating on your back and said, they do it on your arm now. I was negative for everything except I had something except [unintelligible] well to the side of a dinner plate for dust mites. That was the thing I was allergic to. I remember in graduate school vividly, because I’m old enough that I really wasn’t even using fluorescence.
I was using a lot of radiation, so you have to be particularly careful. Behind the screen and just like the nasal drip and the sneezing, it was impossible. There were days I had to literally go home, take some antihistamines, lay down, turn on the air conditioning, and get better. When I moved west, a lot of my allergies ended up resolving because dust mites were really my biggest one. I still remember that experience. My sister lives in Florida, still has that experience. By the way, what’s funny, you start an allergy company and then you start talking about it. It seems like every other person you talk to has taken allergy shots. It’s absolutely hysterical.
The problem was out there and then for us, look, we did market research. I laugh when you’re laughing at my comments around having a PlayStation and a TV for the kids because I prefaced this saying, “This isn’t rocket science. It just has to get done.” I feel the same way about the market. It takes 10 minutes of market research to realize this is an incredibly large market, massive pain point, and something that we should tackle and so here we are.
Christopher: It’s those stories that always tie in. I’m like, “You know what, I’m so tired of dealing with something, I’m going to go out and do it.” Just a theme throughout our conversation right now. I want to speak to the physicians, the clinicians out there who might be interested in Nectar. What’s your message to them on, “You know what, this is going to make your lives easier, your patients’ lives better. This is how you interact with us. This is what you can expect from our products.”
Dr. Chahine: Look, I’m glad you raised that. I’m going to take just one step back because that’s an important point. I told you we had virtual care, we just started our own clinic, and the next leg of the stool is to make it accessible to other physicians. We don’t want to hoard this we want to share it. We’re already in early conversations with a bunch of groups. How can you enable us to offer these drops to patients? If you’re a primary care or frankly even a pediatrician, yes, you can refer to an allergist but I was looking at today the average wait time for allergists is six months. There is 3400 full-time equivalent allergists in the United States to treat 120 million people. Literally a pediatrician, a physician, that wants to offer this through us. We are talking to providers.
We have a provider page on our website, so give us your name, give us your address. We have the compound pharmacy we can ship it to whoever we want, and in a buy and build model there’s a really good opportunity here for the economics but also to get this out to the patients. That’s true whether it’s food or whether it’s environmental. Very glad you asked that because we’re not going to have clinics to cover the entire United States. We may build 50, we may build 200, I have no idea but it won’t be all the clinics that we need.
We need the doctors that are where the patients are to be able to offer this as well, whether it’s in a dense metropolitan area or rural either way, a physician is more than qualified to do this because we have the pharmacy, it’s a sterile environment, everything gets shipped, all of that stuff gets done by us.
Christopher: More of a decentralized model, putting it where the people are. I know that there’s probably going to be a lot of people raising their hands like I’m all ears. Tell me more about this. How can I get this into my practice? How can I get this in front of my patients? I want to ask you last question, this is always the big one and I know we’ve talked about how you’re able to draw in different experiences from the past. You’re able to look overseas and bring in different types of innovations. I’m going to grant you the ability to match my magic wand over here from the Healthcare Americana chair that says all right you are the healthcare czar of the US for the day. Anything you say goes, how are you going to either keep the status quo or design something completely new that isn’t as broken as you mentioned when we started?
Dr. Chahine: Yes, the little pixie dust is the analogy I always use. Look, I think and maybe this sounds either naive or a lot of people say, but I think the ultimate consumer, notice I don’t say patients, I say consumers on purpose because whether they have a need or not a consumer in our minds is someone who gets treated with respect and to try to make their life better. A patient just seems like they came to you and need a favor and you can treat them like crap and make them wait for 30 minutes. For me if you really start from the consumer standpoint and work backwards, you will realize that you can come up with the right structure, and so much of healthcare starts off with the reimbursement, and the need, and then it flows down to the consumer.
By the time it gets to the consumer, I use [unintelligible] it’s like a bunch of consultants got involved and they’re only meeting every once in a while and it just looks like complete mess, and so I think that’s one. Part of that is is following the money. Honestly, I think that statement still very much holds true, and a lot of things are just misaligned because of mis incentives. I think if we did that and until we do something like that right we’re not going to be able to fix the problem that we have. It feels like the tax code. No one intentionally made the tax code this complicated, it became this complicated and it feels like healthcare is the same way.
Christopher: Dr. Kenneth Chahine, founder CEO of Nectar Allergy. Ken thanks for joining us here on Healthcare Americana.
Dr. Chahine: Thank you for having me. It was really fun.
Christopher: That’s going to do it for this episode of Healthcare Americana. If you haven’t yet, be sure to subscribe to the show on your favorite podcast platform. Check us out online at HealthcareAmericana.com, to catch previous episodes, subscribe to our mailing list and visit our online store. Once again, I am your host, Christopher Habig. Thanks for listening.
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Christopher: Hi again everyone, this is Chris. At Healthcare Americana we’re always on the lookout for great stories to tell in the healthcare industry, and we’d like to hear yours. Check out HealthcareAmericana.com and send us your ideas for episodes, or if you’d like to be a guest. Thanks again for listening. Hope you enjoy it.
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