Growing Interest in Direct-to-Consumer Drug Programs
The past few years saw the launch of several direct-to-consumer (DTC) programs, including Amazon One Medical and Mark Cuban’s Cost Plus Drugs. In 2024, several manufacturer-designed DTC programs, such as LillyDirect and PfizerForAll, have been added to the mix, demonstrating pharma’s continuing shift toward an integrated model of patient care.
While these programs can benefit multiple stakeholders, pharma companies should be aware of the existing and potential challenges before rolling out such a program.
Multiple Benefits for Stakeholders
Patients stand to reap the greatest benefits from these platforms, for a variety of reasons. DTC programs provide a convenient, one-stop-shop for patients’ health and wellness needs that can simplify the process of receiving care. Patients can make both in-person and telehealth doctor’s appointments via third-party companies, and can order prescription or over-the-counter medications to be delivered to their home by third-party fulfillment services.
These DTC programs are especially helpful for homebound patients, those who live in rural areas, and patients with stable chronic conditions, such as migraines or diabetes. By providing easier access to medications and healthcare services, DTC programs can improve overall adherence. Patients can also take advantage of the programs’ various cost-saving opportunities.
By streamlining consumer experiences and broadening access channels, DTC programs can benefit not only patients, but also providers, manufacturers, and even payers. For example, the majority (65%) of payers responding to a November 2024 MMIT Indices Rapid Event Primer have a positive impression of Cost Plus Drugs, and two payers indicated an ongoing partnership with the company as a contracted pharmacy provider. Twelve additional payers said they would consider partnering with Cost Plus Drugs in the future.
Overall, most responding payers have a positive perception of DTC programs. As one Pharmacy Director noted, Cost Plus Drugs “sets the bar for offering very low-cost products, especially generics and biosimilars…[it] reduces expenses for patients and improves access.” Those who have a favorable perception of Amazon One Medical note that its integrated AI platform improves patient access while simultaneously reducing the administrative burden on physicians. Many payers expressed that LillyDirect and PfizerForAll provide access to medications and care that might otherwise be unattainable for patients, while helping them navigate doctor visits and prior authorizations.
Ultimately, DTC programs that succeed in simplifying access to care could relieve pressure on an overburdened system and potentially improve overall healthcare efficiency. These programs also give manufacturers an avenue to capitalize on the demand for popular drugs such as GLP-1s for diabetes and obesity, which provide a substantial opportunity for market growth. For manufacturers, DTC programs have the potential to simultaneously boost patient satisfaction, enhance shareholder value, and reduce costs associated with intermediaries and rebates.
Concerns About Unnecessary Utilization
However, DTC programs also present new challenges to be addressed. MMIT’s Rapid Event Primer revealed that most payers are concerned that manufacturers’ DTC programs may direct patients to physicians who are more inclined to prescribe the manufacturer’s medications. As one Pharmacy Director said, “At many of these programs, the physicians are employed by the pharmaceutical company. It seems like they would be incentivized to prescribe drugs to enhance the company’s revenue.”
Half of responding payers are also concerned that DTC programs might encourage physicians to prescribe unnecessary or inappropriate medications that they would not otherwise prescribe. “Patient satisfaction is often linked to receiving a prescription. The physicians are likely incentivized to prescribe medications,” said one Pharmacy Director.
Many payers also noted that these programs are designed to bypass insurance through cash transactions, avoiding third-party management and potentially undermining payer controls. If the offerings are not integrated into patients’ care plans, this could cause fragmented care.
In addition, patients may struggle with understanding formulary tools, potentially leading to poor treatment choices and increased use of expensive medications over cost-effective alternatives. After the launch of LillyDirect, the American College of Physicians issued a statement noting that DTC services “have the potential to leave patients confused and misinformed about medications. While efforts to remove barriers to care are important, they should not devalue the proven benefits of the patient-physician relationship.”
Improving the Patient Experience
Ultimately, almost two-thirds of the Rapid Event Primer respondents said they believed that DTC programs will grow over the next couple of years, and consultants have reported increased pharma interest in them.
Manufacturers considering launching their own direct-to-consumer programs should keep in mind that these are not simply a matter of marketing; they must navigate complex legal and regulatory frameworks to establish such a program. Industry experts recommend that manufacturers conduct compliance checks on multiple issues, including regulations, patient privacy, and care quality and safety, not just on their own internal processes and services, but also on contracted vendors.
For manufacturers, DTC programs may prove to be suitable only for certain conditions. For example, patients with chronic conditions such as diabetes, migraine, cardiovascular disease and respiratory disease may stand to reap the most benefit from these services, as they require consistent medication adherence and monitoring, which are manageable at home. Patients with illnesses requiring testing and labs may be less suited for the DTC model.
For more information on the impact and evolution of DTC programs, learn more about the MMIT Index, as well as our Custom Market Research offering for targeted payer, IDN and physician insights.