More direct ways of selling and buying prescription drugs was the talk at Asembia | Asembia 26AXS Summit

The drug supply chain in the U.S. is not so much a chain as a mind-boggling labyrinth. But at the Asembia specialty drug meeting this week in Las Vegas, there was a lot of talk and a good deal of excitement about bypassing the welter of how prescription drugs are currently distributed and paid for with an ostensibly simpler pathway.

Sometimes called direct to consumer and, other times, direct to patient and, if the employer is involved, direct to employer, the basic idea is the same regardless of the particular label or flavor. Drug manufacturers sell their products more directly to the people who actually use them — patients or, if you prefer to emphasize the shopping aspect, consumers — at set prices that are much lower than the list prices, wholesale acquisition cost prices.

Veterans of the pharmaceutical sector reference say there are examples from the past. David Skomo, chief operating officer for HealthDyne, mentioned in an interview with Managed Healthcare Executive (MHE) that there was a more direct, from-the-manufacturer way of buying fertility treatments in the ‘90s.

But these more direct paths, both actual and hyped in business plans, have taken off lately for a whole set of reasons, the most visible of which is the huge wave of demand for glucagon-like peptide-1 (GLP-1) drugs for weight loss that insurance coverage hasn’t kept up with. Eli Lilly set up LillyDirect to sell Zepbound (tirzepatide) directly outside any health insurance, and Novo Nordisk set up NovoCare to sell Wegovy (semaglutide) for the same reason. The Trump administration added fuel to the direct-to fire with its most-favored-nation (MFN) drug pricing policies, using the leverage of tariffs to induce all the major drugmakers to set up direct-to-consumer operations for select products and then aggregating the offerings on the eponymous TrumpRx website.

During his presentation at the Tuesday morning general session, IQVIA’s Luke Greenwalt, MBA, a member of the MHE editorial advisory board, used a Venn diagram to characterize the direct-to-patient programs as the product of a variety of downward, policy-driven pricing pressures and “access challenges” for drugmakers and insurance red tape and coverage issues for patients, along with a desire for privacy and convenience. Greenwalt listed GLP-1s and drugs for aesthetic purposes and mental and men’s health as those in the intersection of the price that manufacturers are willing to sell at and the price patients are willing to pay. He put a question mark beside migraine, specialty and a catchall “more” category.

Naturally, at the Asembia meeting, which is focused on specialty, one of the questions in the air was whether the direct-to channel is primarily a GLP-1 and Trump MFN phenomenon that will have any relevance and staying power for specialty drugs. The answer from Richard Prest, MBA, a senior principal at the Blue Fin Group, a consulting company that specializes in the life sciences, was a full-throated “yes.” He pointed to specialty drugs that are being sold on the direct-to-consumer market and appearing on TrumpRx.

“The evidence is that we’ve already got products coming to the market that historically we would have never dreamed of,” Prest said in a brief interview after speaking at a session about the state of the direct-to-patient market for specialty. He mentioned Humira (adalimumab), which is selling at a price of $950 on TrumpRx.

Prest also pointed to biosimilars — which, he noted, are specialty drugs — being sold on a direct-to-consumer basis as evidence of a budding direct-to channel for specialty drugs. Prest mentioned Amjevita (adalimumab-atto), a biosimilar to Humira, being sold at $299 as an example.

Prest and others at the meeting said they saw the growing interest and implementation of direct-to channel selling as a response to pharmacy benefit managers (PBMs) using formulary exclusions and other means to block access to certain drugs. As for the direct-to channel being a wolf-in-sheep’s-clothing form of cost shifting to patients and consumers, Prest put the onus on PBMs.

“We are already seeing that, right?” Prest said. “The fact that the PBMs are blocking products and saying that they’re going to make decisions about which medication is best for you is already an example of cost shift. The fact that they’re driving up copays is an example of cost shifting. The fact that they’re increasing deductibles is an example of cost shifting. So this is not manufacturers choosing to cost shift. This is manufacturers looking to find what is actually the most cost-effective way to get product to patients because insurance is no longer a viable channel.”

Prescryptive Health in Redmond, Washington, is a technology and PBM company that is positioning itself as a provider of the technology that can make the direct-to channel work effectively and serve up useful data and analytics in the process. Rather quietly late last year, Prescryptive became the supplier of the software that LillyDirect runs on. Some pages of the website have Prescryptive’s logo discreetly at the bottom and say “Prescryptive powered.” In an interview with MHE at the Asembia meeting, Cameron Olig, Prescryptive’s chief commercial officer, noted that many of the branded drugs currently available in the cash-paying direct-to channel market have lost or are about to lose patent protection; he used the “loss of exclusivity” (LOE) jargon of the prescription drug sales world. But he thinks that drugmakers are increasingly going to view the direct-to channel as part of their overall marketing strategy, not just as an afterthought or a reaction to the contingency of the current set of GLP-1 and MFN pressures.

“A lot of the DTC [direct-to channel] that is in the market is LOE product — what I do as I am losing exclusivity. I think in the future, it is going to be a strategic way of [drugmakers] saying, ‘How do we get the best price in the market to the most people without all fees and the gross-to-net issues and the unpredictability?’” he said. Olig envisions different manufacturers using the direct-to channel for different reasons. “Some manufacturers with lower-priced brands are saying, ‘I just need a more efficient way to do the things that I'm currently doing. And if this is it, let’s try that.’”

Not surprisingly, given Prescryptive’s PBM business, Olig said he doesn’t see the direct-to channel as being entirely divorced from pharmacy benefit management. In his view, the “successful player” in supporting the direct-to channel will fold the various programs back into employer-funded pharmacy benefits “so we're not managing 30 different programs.” Olig spoke about a “seamless consumer experience and employer experience” and employers taking “a marketplace approach to put together the right drug list for their employees and their families.”

Benefits for drugmakers

Skomo and his colleague, Sarah Thomas, head of growth and commercialization at HealthDyne, also spoke about the direct-to channel being available through employers, but alongside drugs covered and managed by a PBM rather than integrated into what a PBM does. HealthDyne is marketing a direct-to-employer model that is predicated on coupling lower prices from drugmakers with contributions from employers to further drive the cost to the individual. Skomo and Thomas frame the direct-to-employer model as an added benefit. Thomas says it would be a choice for employers who want to, say, provide access to GLP-1 weight-loss drugs but don’t like the “pricing economics” of what PBMs offer. She argues that the model has advantages all around — for the employer, the drugmaker and the employees.

“These direct-employer models allow the employer to set more of a budget and understanding of what they can afford to cover for these drugs,” Thomas said in an interview with MHE. “They allow the copay to be set where it needs to be to handle the budget of the employer. And it allows the manufacturer to say, ‘Great, we’ll work with you. We’ll give you a low net cost price.’ There is no rebate. Patients can have very seamless access to the therapy. There are no PA [prior authorization] barriers, none of the kind of controls that have existed before, with an understanding that patients are being prescribed to the label.”

Skomo talked up the benefits to drugmakers. “It can help convert those employer dollars into guaranteed therapy starts and reduce that abandonment that manufacturers so often see even more acutely with the specialty therapies.”

Prest also talked about how the direct-to channel could benefit drugmakers with drugs that are losing patent protection and therefore facing competition from lower-priced generics. “What we’re seeing is that, particularly if the only way for you to stay on formulary post LOE is to pump even more money into the PBMs through rebates, you get to a place where you’re like, Well, actually, we got better gross demand through cash, so let’s give the patients that are loyal to the brand the ability to access it through cash, and that way we’re able to keep a channel open for those patients. And it’s actually more cost-effective for us than trying to run it through insurance.”

Prest said that some drugmakers may elect to market through the direct-to channel right from the beginning if PBM formularies present too much of an obstacle. That’s what happened to neffy (nasal epinephrine spray), developed by ARS Pharmaceuticals, he said. PBMs decided that they weren’t going to cover neffy, so the company decided that the only way to market its product was to offer a cash price. “Patients who preferred a nasal form … now had an option as opposed to injecting themselves, and that’s been a successful product.” Prest said the cash-paying, direct-to channel might be the future for the dual orexin receptor antagonist drugs for insomnia that have “tried to go through the insurance path, and they’ve been blocked.”

Lisa Gill, a veteran healthcare analyst for J.P. Morgan, had a mixed message for the Asembia audience at the general session Tuesday morning. In a fireside chat interview with Forbes’ Bruce Japsen, Gill said she saw a limited role for the direct-to channel. “I think as long as you have employer-based insurance, I don’t see how many people are really going to just go pay for this on their own.” People are more apt to put pressure on their benefits department around coverage. Gill also saw practical problems if every drugmaker starts to go down the direct-to channel path. “There are, what, over 600 manufacturers in the country. So do each of them have to go to the benefits department and sign a contract for that direct relationship?” At the same time, Gill acknowledged that “there is absolutely interest by employers to hear what the entities have to say.”