With Trump’s backing, the pharma industry is expanding the model, but experts expect its impact to be limited
Excerpt – Selling drugs directly to consumers is unlikely to make most of them more affordable, even if doing so boxes out insurers and the “middlemen” known as pharmacy benefit managers, several health policy and drug pricing experts told STAT. The cash prices that pharma companies are willing to offer for their drugs (which currently stand at several hundred dollars per month) will never be as low as the prices patients can get through insurance. And if patients buy their drugs directly from pharma companies, none of their spending contributes to their deductibles or out-of-pocket maximums meant to limit costs over time.
That’s not to say the model wouldn’t benefit the drug industry, particularly in the case of medicines not widely covered by insurance. GLP-1 drugs for obesity, which are hugely in demand, have notably brought in substantial sales through direct-to-consumer online portals. But the adoption of that model for even those drugs hasn’t necessarily led to greater affordability or equity in access. [..]
Lilly’s decision to sell Zepbound through its portal LillyDirect appears to have paid off for the company. In its most recent earnings call, executives said that about one-fifth of total prescriptions for the weight loss drug are now from patients using cash pay.
The company now offers a subscription model: If consumers refill their Zepbound prescriptions on a monthly basis, they can get the drug for $499 per month, whereas if they purchase just a one-month supply, they have to pay up to $1,049 at the highest dose. (Zepbond has a list price of $1,086 a month, though payers typically negotiate lower prices.) [..]
“I don’t know that it’s making medications more affordable for patients,” said Sean Sullivan, a professor at the University of Washington who researches health economics. “I think it’s a smart move on [Lilly’s] part, but does it expand access?”
People with obesity are used to paying out of pocket for meal plans and exercise regimens, but, even at $499 a month, Zepbound is still too expensive for many patients, doctors said. [..]
Brian Reid, a consultant for pharma companies, said that outside of obesity drugs, there are many other examples of treatments that are not generously covered by insurers but that could benefit large populations of patients who would be willing to buy them directly. “I recognize that these things are not solutions for everyone. But at this point, we’ve got solutions for no one oftentimes,” he said.
Other experts, however, don’t see how such offerings will help make drugs more affordable at scale. [..]
Even though drugmakers appear to be offering big discounts when they sell directly to patients, cash prices are generally much higher than the copays or coinsurance that patients would pay through their health plans. And even if patients have high-deductible plans, they may still be better off paying for drugs at the original, undiscounted prices so that they can meet their deductibles and get closer to their out-of-pocket maximums, said Stacie Dusetzina, a health policy professor at Vanderbilt University Medical Center.
Besides, the people who can afford to pay the cash prices probably already have good health insurance, she added.
Trump has made other demands of the pharmaceutical industry as part of his so-called “most-favored nations” plan, including that companies cut prices that they offer to Medicaid, Medicare, and commercial payers. Yet the notion of implementing direct-to-consumer models is the only one with which the industry has publicly agreed.
“Is that an attempt to show the president that they are responding to his demands that they take some action on drug prices, and trying to shift the focus away from his more specific demands related to most-favored nation pricing?” said Juliette Cubanski, deputy director of the program on Medicare policy at KFF, a health policy research organization.
[..] the prices currently set for direct-to-consumer — they’re likely about the same as the net prices negotiated by payers after rebates and discounts. If pharma companies were to substantially lower cash prices, he added, then payers would either try to negotiate net prices down even further, or decide to stop paying for the drugs altogether and have patients buy the medications directly.
That would be a bad outcome for patients, [Harvard Medical School instructor who researches drug pricing Ben] Rome said, because then they would be on the hook for paying for drugs on their own — without any limits on cost that insurance plans offer. It would also be a bad outcome for the pharma companies, because they would be much more vulnerable to patients’ price sensitivities.
“If you’re a pharmaceutical company, your ideal situation is that a drug is covered by insurance with zero cost-sharing for patients,” so that there are no financial barriers getting in the way of patients taking the medicine, Rome said. But, “if everything goes direct-to-consumer, that’s the exact opposite. People are fully cost sensitive to the medicine at whatever price you’re setting, and so now you’re on the hook for the access problem.”
“Right now, the industry can blame insurance companies for the out-of-pocket cost problem,” he added, “but once it’s direct-to-consumer, they can’t blame insurance companies anymore.”
Full article, E Chen, STAT, 2025.8.19