Momentum is building among drugmakers to engage consumers directly. Industry leaders including Eli Lilly, Novo Nordisk, and Pfizer have launched consumer-facing platforms in recent years, while sites like Cost Plus Drugs and TrumpRx aim to reset expectations around pricing transparency.
Individually, these initiatives have inched direct-to-consumer (DTC) models forward. Collectively, they suggest a shift in how and where patients go to fill prescriptions. DTC models offer manufacturers greater control over the patient journey, richer data, and new levers to drive adherence. At the same time, challenges including regulatory complexity, fragmentation, clinical integration, and patient trust pose significant hurdles.
Currently, GLP-1s are the driving force behind DTC. That’s due to a convergence of market conditions: a large patient population, high consumer awareness and demand, access gaps related to limited coverage, and the ability to self-administer treatments. Products that fall into these buckets could be poised to follow. Across the industry, stakeholders need to proactively — and strategically — assess the risks and rewards of DTC in order to stay ahead of the curve. As we’ve seen with GLP-1s, the potential for market disruption is immense.
Why DTC is having a moment
Traditional prescription drug fulfillment in the US follows a well-established path: manufacturers sell through wholesalers, pharmacies dispense to patients, and pharmacy benefit managers (PBMs) sit in the middle managing formularies, pricing, and utilization. An estimated 83% of prescription volume still flows through traditional retail and specialty pharmacies with the remaining 17% occurring in newer models, including e-commerce and DTC platforms.
However, as growth in retail prescription dispensing slows to an annual rate of 1.3%, the use of non-retail settings is rising by 4%, according to IQVIA data. Manufacturers have sought to capitalize on this by venturing deeper into patient engagement, often combining patient education, telehealth, and fulfillment into a single digital front door. Lidia Fonseca, Pfizer’s chief digital and technology officer, highlighted the evolution of this approach during her speech at the 2024 Oliver Wyman Health Innovation Summit.
Implications of DTC vary across healthcare
As DTC continues to evolve, its effects will not be evenly distributed. Each sector faces a different mix of risks and opportunities.
Life sciences manufacturers: DTC offers manufacturers greater connectivity with patients, richer data, and new avenues for demand generation. But success necessitates that they deploy new capabilities, especially around fulfillment partnerships, patient support, and the consumer’s digital experiences. DTC may also strain traditional PBM relationships and intensify pricing scrutiny.
Retail and specialty pharmacies: Pharmacies risk losing prescription volume as patients go outside traditional channels. But DTC creates opportunities for pharmacies to act as last-mile fulfillment partners, potentially disintermediating traditional PBM arrangements in the process.
Health plans: DTC introduces challenges around visibility and control. Cash-pay fulfillment can reduce insight into member medication use, with downstream implications for care management, quality metrics, and Stars performance. Plans need to consider whether and how to incorporate DTC options into benefit designs to reduce confusion and leakage.
PBMs: The core PBM value proposition, particularly rebate aggregation and formulary control, gets squeezed as DTC grows. As more volume shifts outside traditional benefit structures, PBMs will need to evolve their offerings to remain relevant to payers and employers.
Wholesalers and distributors: While DTC could bypass traditional distribution pathways, it also creates demand for new logistics models, including smaller, more frequent shipments directly to consumers. Wholesalers that adapt their capabilities may find new growth opportunities.
Providers: Providers face increased complexity in maintaining visibility into patient medications, particularly when prescriptions are filled outside integrated systems. At the same time, partnerships with digital pharmacies and DTC platforms may offer new ways to extend care beyond the clinic.
Consumers: Consumers should benefit from clearer pricing and more direct engagement through DTC channels. However, as more DTC platforms enter the market, patients may face growing confusion about where to obtain their medications, leading to more fragmentation and further disconnecting treatment decisions from a coordinated care journey.
Every industry stakeholder will play a role in helping consumers safely navigate the DTC market, including creating clear pathways to getting their medications and ensuring continuity of care. As we’ve seen with GLP-1s, stakeholders who manage the patient journey without creating more fragmentation, and who proactively address regulatory and clinical-integration hurdles, will be best positioned to emerge as disruptors.