GoodRx (GDRX 5.46%) had its initial public offering (IPO) today at $33, substantially higher than the expected range of $24 to $28 per share. After trading started, shares jumped as high as $49.57.

The healthcare company acts as an intermediary between patients and pharmacy benefits managers (PBMs), which are tasked by health insurers and self-insured employers to lower the costs of prescription drugs. GoodRx's mobile app helps the patient find the pharmacy with the best price that is negotiated by GoodRx, and then GoodRx makes money taking either a percentage of the fees that the PBM earns for reducing prescription drug costs or a fixed payment per transaction.

Hands picking up prescription drugs from a shelf.

Image source: Getty Images.

The good news for GoodRx is that drug prices are expanding. According to the company, 67 drugs increased their costs in July by an average of 3.1%. While that's bad for consumers, it helps the company on both sides of the equation: With higher prices, more patients will be driven to use GoodRx to save money on their prescriptions, and revenue that's calculated as a percentage of the overall cost will be larger with the increased cost of prescription drugs.

GoodRx is expanding beyond its business of lowering prescription drug costs. For example, it launched HeyDoctor, a telemedicine offering that competes with Teladoc Health (TDOC -2.36%). But in the first half of the year, 91% of GoodRx's revenue still came from prescription transaction fees, and Navitus, MedImpact, and Cigna's (CI) Express Scripts each accounted for more than 10% of total revenue, so the prescription drug business is still what investors should largely be focused on.