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Eli
Lilly
is
shaking
up
the
pharmaceutical
industry
with
a
new
website
offering
telehealth
prescriptions
and
direct
home
delivery
of
certain
drugs,
including
its
red-hot
weight
loss
treatment
Zepbound,
to
expand
patient
access.
The
company’s
direct-to-consumer
push
announced
Thursday,
the
first
of
its
kind
for
a
big
drugmaker,
won’t
necessarily
upend
the
pharmaceutical
industry
and
the
prescription
drug
supply
chain
alone,
according
to
some
analysts.
But
other
drugmakers
could
follow
suit
with
their
own
direct-to-consumer
models,
according
to
some
analysts.
That
could
add
more
pressure
on
what
many
critics
call
a
complex
system
for
distributing,
pricing
and
prescribing
drugs
in
the
U.S.
—
a
structure
they
say
has
led
to
higher
prices
and
fewer
choices
for
patients.
“There’s
always
a
possibility
for
disruption.
I
think
you
should
never
rule
out
any
sort
of
disruption,”
BMO
Capital
Markets
analyst
Evan
Seigerman
told
CNBC.
“I
don’t
think
that
is
necessarily
happening
tomorrow,
but
I
think
that
you
should
never
assume
that
things
can’t
change.”
Lilly’s
new
platform
comes
as
other
companies
move
to
disrupt
the
drug
system
in
some
way,
in
part
as
they
face
more
political
pressure
to
cut
consumer
costs
and
increase
pricing
transparency.
Those
actions
come
as
lawmakers
target
drug
supply
chain
middlemen
in
new
legislation
and
as
the
Biden
administration
takes
its
own
steps
to
rein
in
prices
of
medications,
such
as
by
giving
Medicare
the
power
to
negotiate
down
drug
prices
for
the
first
time
in
its
six-decade
history.
Eli
Lilly
said
its
new
effort
—
dubbed
LillyDirect
—
aims
to
increase
access
to
medicines
for
chronic
diseases,
including
the
highly
popular
weight
loss
drugs.
Those
treatments,
which
have
soared
in
demand
over
the
last
year
as
they
help
patients
shed
unwanted
pounds,
are
plagued
by
supply
constraints
and
concerns
about
potentially
harmful
knockoffs.
Patients
also
face
long
waitlists
to
meet
with
obesity
medicine
specialists
who
can
prescribe
the
drugs
to
them,
a
problem
Eli
Lilly
hopes
to
address,
according
to
Seigerman.
Eli
Lilly’s
Zepbound
won
Food
and
Drug
Administration
approval
just
two
months
ago,
but
some
analysts
say
it
could
garner
more
than
$1
billion
in
sales
in
its
first
year
on
the
market.
LillyDirect
won’t
significantly
disrupt
the
industry
Eli
Lilly’s
site
eliminates
the
need
for
a
patient
to
visit
the
doctor’s
office
to
get
a
prescription
and,
in
some
cases,
for
a
pharmacy
to
fill
it.
But
some
analysts
said
Eli
Lilly’s
site
alone
will
not
significantly
threaten
the
traditional
drug
distribution
system,
which
involves
a
multitiered
network
of
manufacturers,
drug
wholesalers,
pharmacies
and
pharmacy
benefit
managers,
or
PBMs.
“I
don’t
think
PBMs
and
the
whole
infrastructure
that
we
have
are
going
anywhere,”
Seigerman
told
CNBC.
“I
think
what
[Eli
Lilly]
really
did
was
identify
some
friction
points
in
getting
these
products [weight
loss
drugs]
to
patients,
and
they’re
coming
up
with
a
way
to
solve
for
that.”
“From
my
understanding,
it’s
just
that
there’s
no
retail
pharmacy
where
a
patient
is
having
to
go
hunt
for
that
particular
[drug]
dose,
it’s
being
shipped
right
to
them,”
he
said
of
Eli
Lilly’s
services.
Eli
Lilly’s
site
connects
patients
with
an
independent
telehealth
provider
who
can
prescribe
any
FDA-approved
weight
loss
drug
or
other
medications
for
diabetes
and
migraines.
If
the
prescribed
treatment
is
Eli
Lilly’s,
the
patient
can
have
a
third-party
online
pharmacy
deliver
it
to
their
door.
Patients
will
also
receive
Eli
Lilly’s
discounts
for
drugs
if
they
qualify
for
the
company’s
savings-card
programs,
the
company
noted
in
a
release.
One
program
allows
people
with
insurance
coverage
for
Zepbound,
which
costs
more
than
$1,000
per
month,
to
pay
as
little
as
$25
out-of-pocket.
Meanwhile,
those
whose
insurance
does
not
cover
the
drug
may
be
able
to
pay
as
low
as
$550.
Some
experts
view
that
transparent
pricing
as
a
shot
across
the
bow
to
PBMs,
the
largest
of
which
are
owned
by
CVS,
UnitedHealth
Group
and
Cigna.
Drugmakers
have
long
complained
that
they
give
PBMs
steep
drug
discounts
in
exchange
for
higher
placement
on
a
formulary
—
an
insurance
plan’s
list
of
preferred
medications
—
only
for
those
middlemen
to
not
pass
along
savings
to
patients.
But
Eli
Lilly’s
savings-card
program
and
new
site
won’t
cut
PBMs
out
of
the
equation.
“If
you
still
use
your
health
insurance
to
get
these
drugs
through
[Eli
Lilly’s]
website,
it’s
still
going
to
get
processed
by
a
PBM,”
Jeff
Jonas,
a
Gabelli
Funds
portfolio
manager,
told
CNBC.
Patients
who
get
drugs
such
as
Zepbound
from
Eli
Lilly’s
site
can
choose
to
pay
with
cash
to
avoid
PBMs
altogether.
But
Bernstein
analysts
said
in
a
Thursday
note
that
they
expect
the
“vast
majority”
of
potential
weight
loss
drug
users
to
get
medications
through
insurance.
Other
drugmakers
could
follow
Eli
Lilly
More
pharmaceutical
companies
could
adopt
a
similar
approach
to
Eli
Lilly’s.
Cantor
Fitzgerald
analyst
Louise
Chen
said
drugmakers
could
benefit
the
most
from
using
a
direct-to-consumer
pharmacy
model
for
high-selling
drugs.
“Cause
of
the
scale
of
your
effort,
it
[would]
probably
make
sense
for
bigger
drugs,”
Chen
wrote
in
an
email
to
CNBC.
“You
get
more
bang
for
the
buck
and
you
are
reaching
more
people.”
But
Chen
said
it
may
be
more
difficult
for
a
drugmaker
to
pursue
a
direct-to-consumer
model
with
smaller,
more
specialized
drugs,
such
as
treatments
for
complex,
chronic,
or
rare
medical
conditions.
For
example,
some
drugs
require
specialized
training
for
administration,
such
as
injecting
or
infusing
a
therapy
into
a
patient’s
vein
through
an
IV.
Drugmakers
that
do
adopt
a
direct-to-consumer
approach
could
add
even
more
pressure
on
the
nation’s
traditional
drug
supply
chain
after
other
companies
moved
to
simplify
the
system
in
recent
months.
That
includes
CVS
Health,
which
announced
plans
to
overhaul
its
business
model
for
pricing
prescription
drugs
in
December,
adopting
a
model
similar
to
billionaire
Mark
Cuban’s
direct-to-consumer
pharmacy,
Cost
Plus
Drugs. Health-care
giant
Cigna also
announced
in
November
that
its
PBM will
offer
a
pricing
model
similar to
Cuban’s
venture.
Cost
Plus
Drugs
aims
to
drive
down
the
price
of
medicines
broadly
by
selling
them
at
a
set
15%
markup
over
their
cost,
plus
pharmacy
fees.
That
company is
already
shaking
up
the
broader
health-care
industry: CVS
suffered
a
blow over
the
summer
when
a
major
California
health
insurer,
Blue
Shield
of
California, announced
it
will
no
longer
use
the
company as
its
PBM
and
instead
will
partner
with
several
other
businesses,
including
Cuban’s
firm
and
Amazon
Pharmacy.
