The Shift Towards Direct-to-Consumer Sales in Pharma: A New Era of Accessibility and Efficiency

In early 2024, Eli Lilly introduced LillyDirect, a direct-to-consumer platform offering telehealth services and home delivery of prescribed medicines.

A few months later, Pfizer followed suit with the launch of PfizerforAll, which sells medications prescribed by telehealth clinicians.

The pharmaceutical landscape is undergoing a significant transformation as manufacturers increasingly embrace direct-to-consumer (D2C) sales strategies, sidestepping intermediaries such as pharmacy benefit managers (PBMs). With these changes, patients have access to pharmacists around the clock and may not have to go through traditional pharmacies or insurance protocols.

While D2C is not an entirely foreign concept in the pharmaceutical world, this wave seems to be characterized as strategic moves that will permanently change the industry dynamics and hopefully benefit manufacturers and patients alike. Previously, shifting to D2C selling was more of a defense mechanism against generics when patents expired. The drugs now sold by LillyDirect and PfizerforAll seem to be at the early stages of the product life cycle.

This transition coincides with increased oversight and accountability regarding price inflation by middlemen. The few yet powerful PBMs manage prescription drug benefits on behalf of insurers and employers. Their role involves negotiating prices, managing networks and developing formularies. In September of 2024, middlemen were sued for inflating insulin drug prices through unfair rebate practices, thus overcharging patients. By sidestepping intermediaries, manufacturers are able to minimize costs.

Objectives

By cutting out intermediaries, pharmaceutical companies are better positioned to gather valuable user data, enhance customer experiences, and improve cost efficiencies.

The transition to D2C sales is driven by several key objectives:

1. Gathering User Data: By selling directly to consumers, manufacturers can collect firsthand data on user experiences, preferences, and outcomes. This information is crucial for refining products and tailoring marketing strategies.
2. Cost Savings: Direct sales can reduce expenses associated with intermediaries, enabling manufacturers to capture cost savings and offer noticeably lower pricing. The exact scope of cost savings—and who it primarily benefits—is to be determined.
3. Avoiding Insurance Denials: D2C models allow patients to bypass insurance hurdles that often complicate access to necessary medications, particularly expensive ones. This is especially important in a healthcare environment where insurers frequently deny coverage for certain treatments.

Concerns

While these changes are supposed to generally benefit manufacturers and patients, questions about unexpected consequences linger.

Traditional pharmacies act as a one-stop-shop for patients to purchase drugs for multiple manufacturers. With brands selling their own products, customers would have to navigate several types of telehealth prescription methods and websites. How will customers respond to losing the convenience of purchasing all of their medicines in one place?

While D2C sales offer several benefits, they also risk further isolating the healthcare system. The transactional nature of these sales may undermine the value of more comprehensive, long-term care models. Emphasizing immediate sales can shift focus away from the long-term health outcomes that a more integrated approach seeks to promote.

Transitioning to a direct-to-consumer model may put some pharmaceutical companies at risk of “pushing” medications on patients who may not need them or who could benefit more from alternative treatments, including non-pharmaceutical options. Without careful oversight, the digital health platforms that facilitate access to medications could contribute to overprescribing.

Conclusion

The shift towards direct-to-consumer sales in the pharmaceutical industry marks a pivotal moment in healthcare. By prioritizing patient access, affordability, and data collection, manufacturers are not only enhancing their market position but also reshaping the overall consumer experience. As the industry continues to evolve, it will be crucial to balance the benefits of D2C sales with the need for integrated, holistic care to ensure that the ultimate goal—improving patient outcomes—is achieved.

 

Sources:

https://www.biopharmadive.com/news/pfizer-eli-lilly-direct-to-consumer-glp-1/716866/ 

https://www.ftc.gov/news-events/news/press-releases/2024/09/ftc-sues-prescription-drug-middlemen-artificially-inflating-insulin-drug-prices

https://www.healthcare-brew.com/stories/2024/09/16/pharma-companies-going-dtc

https://engage.carenethealthcare.com/2022-us-consumer-healthcare-trends-survey

https://www.forbes.com/sites/sallypipes/2024/09/16/drug-companies-are-embracing-direct-to-consumer-sales-thats-a-win-for-patients/#:~:text=In%20recent%20months%2C%20drug%20companies,to%2Dconsumer%20offerings%20more%20convenient.

https://www.medpagetoday.com/opinion/prescriptionsforabrokensystem/111937