Industry observers say President Donald Trump’s push for direct-to-patient drug sales could yield a compromise with pharmaceutical companies, but for now executives are dodging the president’s order to slash direct-to-patient sales prices to “most favored nation” levels much less to current insured rates.
Pfizer CEO Albert Bourla told investors that top drugmakers are “ready to roll up their sleeves” to expand what Trump dubs direct-to-consumer (DTC) sales offerings after the president sent letters to 17 pharmaceutical CEOs demanding they lower drug costs by extending “most favored nation” (MFN) pricing to current Medicaid drugs and to newly launched products across Medicaid, Medicare, commercial plans and DTC sales by Sept. 29. Bourla is the chair of the brand drug lobby Pharmaceutical Research and Manufacturers of America.
Trump’s letter tells drug companies to “participate in direct-to-consumer (DTC) and/or direct-to-business (DTB) distribution models for high volume, high-rebate prescription drugs so all Americans get the same low MFN prices that manufacturers already offer to third-party payers.”
Deborah Williams, a health policy regulatory expert and former Pfizer director, told Inside Health Policy there is “a lot of cognitive dissonance” in how the pharmaceutical industry is responding to Trump’s DTC pricing push. She noted that in the letter Trump made it clear DTC prices should match MFN rates -- but though companies are positioning their DTC offerings as a response to Trump, they aren’t offering the steep discounts he pushed for.
Pfizer and Bristol Myers Squibb plan to sell their blockbuster blood thinner Eliquis at a discounted cash price online, expanding Pfizer’s DTC platform that already offers telehealth visits, vaccine scheduling, and prescriptions for drugs like its migraine and COVID-19 treatments. “We think it is a fantastic way to go ahead, so we will work collaboratively to do it,” Bourla said during the company’s earnings call for the second quarter.
“We have serious discussions in the industry,” Bourla added. “I’m connected very often individually with all the major companies and they are all ready to roll up their sleeves and execute something like that.”
But a former FDA associate commissioner worries the model could bypass advice from patients’ personal physicians. In a similar vein, top Senate Democrats recently released results of an investigation they allege shows drug makers’ collaboration with telehealth companies to provide drugs to patients has eroded the physician-patient relationship, and led to over-prescribing and substandard care.
Former FDA associate commissioner and co-founder of Center for Medicine in the Public Interest Peter Pitts warned that while DTC drug sales could drive down costs by cutting out middlemen, the model risks bypassing patients’ personal physicians -- a move he called “very dangerous” and potentially harmful to patient care.
Pitts told IHP the approach has “terrific” potential benefits but urged policymakers to weigh those gains against the threat of weakening the doctor-patient relationship.
“You don't want to have the unintended consequence of disintermediating a patient's individual physician, that's very dangerous,” Pitts said. “We need to look at the whole picture.”
Drug companies’ moves to embrace Trump’s direct-to-patient pitch also aren’t aligning with the president’s simultaneous call for MFN pricing.
Eliquis’ new DTC price -- $346 a month -- is still far above overseas rates, with the blood thinner costing €70--€90 in Germany. Williams said the gap shows drugmakers are “not fully following” Trump’s call for most favored nation pricing.
While Williams said MFN pricing tied to DTC sales is “not the most ideal market-based approach,” she argued it could create competition that pressures prices in insurance plans.
“Strong medicine is needed to redress the American grievance of unaffordable medications,” she said in a LinkedIn post, pointing to IQVIA data showing more than 98 million new therapy prescriptions were abandoned in 2023, in part due to cost.
Williams urged the industry to counter with its own “bold proposals,” including removing the government’s best price requirement for Medicaid plans and easing generic entry through FDA policy changes.
DTC models give pharmaceutical companies a strategic advantage by keeping prices outside the calculation of mandatory government rebates, such as Medicaid and 340B programs, according to Williams. She noted that while Eli Lilly’s DTC prices for U.S. patients remain higher than the company’s prices in Europe and Canada, they are still “below the middleman price,” giving manufacturers a way to manage costs without triggering broad mandated discounts.
The DTC approach can also help companies avoid certain government pricing mandates while still offering savings to specific patient groups. “If they can avoid 340B through DTC, then they can avoid setting a lower price for all these other mandated government discounts,” Williams told IHP. Manufacturers could, for example, direct employees to a DTC pharmacy to reduce costs for both the company and patients.
Supplemental rebates already give drug companies some flexibility, particularly for high-cost specialty drugs that burden state Medicaid programs. By pairing these rebates with DTC pricing, drug companies can target relief to select populations while maintaining overall revenue, according to Williams.
Ahmed Elsayyad, co-founder and president of artificial intelligence health communications firm Ostro, which works with several top 20 pharmaceutical companies, called President Trump’s letters to top pharmaceutical executives “really like a bargaining tactic.”
Elsayyad suggested the DTC model could serve as a middle ground between the administration and pharma. “It could be a good compromise . . . MFN pricing would materially impact our business. It’s too much of an impact to just broad scale cut everything, but we can come in by doing this DTC model, the DTC cash pay model for patients to lower those prices,” he told IHP.
“Manufacturers want to actually follow the trend of getting closer to the consumer, getting closer to the patients, and offering the ability for the patient to pay for it,” he added.
But Elsayyad also questioned whether these models will meaningfully reduce costs for insured patients.
“Several of them are offering cash paid prices that are many times higher than the out-of-pocket costs [paid by insured] patients,” he said. “For patients that don’t have insurance, these options are great . . . but how are you going to ensure that these drug costs stay affordable to the population that is insured?”
Elsayyad previously told IHP the DTC model could work for generic drugs but faces major economic and awareness hurdles for brand-name products, while Williams said it is best suited for chronic disease treatments with strong off-label demand.
Some brand makers are teaming up with telehealth providers to try to get more traction for their DTC models -- but those arrangements are being heavily scrutinized by lawmakers.
Eli Lilly offers LillyDirect for its products, while Novo Nordisk runs NovoCare Pharmacy for its weight-loss drug Wegovy. RVL Pharmaceuticals provides Upneeq through a telemedicine portal, and Gelesis markets MyPlenity via a similar online platform. Exeltis offers the birth-control pill Slynd through Nurx’s digital pharmacy. Roche is also considering launching its own DTC platform.
Senate health committee ranking member Sen. Bernie Sanders (I-VT) and three Senate Democrats have blasted the DTC platforms pharmaceutical giants Pfizer and Lilly paid telehealth companies to help launch, alleging the partnerships have led to over-prescribing that hiked health care spending, left patients with sub-standard care, eroded patient-physician relationships and pose potential conflicts of interest.
Following a nine-month investigation, the senators released a report on July 17 that specifically slams Lilly’s partnerships with Form Health, 9amHealth and Cove, in addition to Pfizer’s partnerships with UpScriptHealth and Populus Health Technologies. -- Maaisha Osman (mosman@iwpnews.com)