Posted: 01 Oct. 2020 14 min. read

Direct-to-patient (DTP) sales channels might be the next frontier for pharmaceutical companies

By Michael Flaherty, senior manager, and Richie Lou, consultant, Deloitte Consulting LLP

Consider this: While watching TV one night, Stacy sees an ad for a new prescription medication for acne. She uses her phone to visit the drug’s website where the landing page asks her if she wants to “Get Started Now!” Stacy is redirected to a different website where she creates an account, enters her credit card information for this cash-pay drug, and answers a series of questions about her medical history. Fifteen minutes later, she receives a call from a physician who asks her a few more questions before confirming that the prescription is appropriate for her. The medication that Stacy saw on TV arrives at her doorstep three days later. She never had to leave her home, meet with a doctor, or visit a pharmacy in person.

Stacy got her medication through a direct-to-patient (DTP) channel, an emerging go-to-market approach that some pharmaceutical companies are beginning to explore. The combination of telemedicine, online health care services, and home product and device delivery could help pharmaceutical companies broaden their sales reach and expand product access to more patients.

An illustrative DTP patient journey: Here’s a closer look at the steps a patient takes, from product awareness to receiving the drug at home. 

The DTP channel is not meant to replace established connections between patients, physician offices, retail pharmacies, or traditional drug-distribution networks. We see it as a complementary sales channel that is best-suited for low-risk products where screening and diagnosing can be done virtually. However, pharmaceutical companies have to outsource the hosting and development of a DTP channel to comply with legal and regulatory requirements. Factors pharmaceutical companies should consider when choosing a partner include the breadth and depth of digital service offerings, practices around data sharing, and opportunities to deliver a better consumer experience.

More pharmaceutical companies are eyeing DTP channels

Digital DTP is no longer a channel solely for generics, but a strategic lever that could help drive the launch of new brands or expand the lifecycle of existing products. This shift in strategy is being driven by evolving consumer behaviors and the growing opportunity to engage more directly with patients.

Consumers are starting to expect pharmaceutical companies to meet them where they are, which increasingly is online. The ease and familiarity with which consumers buy clothes, cosmetics, and even groceries online has shaped their digital expectations. More patients are going digital in search of virtual care, medications, and wellness options. The COVID-19 pandemic has helped to accelerate this shift, as health care professionals and patients have grown even more comfortable with virtual care. Moving forward, we expect this trend will increase patient interest in a DTP experience.

Creating a DTP channel can provide pharmaceutical companies with a way to reach digital-first patients, or patients who might have limited access to in-person care or retail pharmacies. By making it easier to buy and refill prescriptions for certain products, DTP channels can reduce patient churn and improve medication adherence. In addition, online channels can provide access to richer consumer data that help pharmaceutical companies understand their customers better, execute more effective marketing strategies, and improve the patient experience by offering tailored patient programs. Finally, in certain situations, DTP can even be used to overcome access barriers created by pharmacy benefit managers (PBMs).

DTP channels are not for every drug

Some drugs are a better fit for the DTP model than others. Products that treat hair-loss or migraines, which are already available through digital DTP channels, pose little risk and can be easily administered by the patient. By contrast, biologics, scheduled narcotics, gene therapies, and treatments requiring more diagnostics and/or complex administration would not lend themselves to DTP.

Three initial evaluation criteria that pharmaceutical companies should consider before moving forward with a DTP program are:

  1. Digital demand: Consumers should be interested in buying the product online. The manufacturer also might determine that online demand for the product could be accelerated with reasonable acquisition costs. DTP sales can require thoughtful patient-activation programs and campaigns.  
  2. Treatment complexity: Drugs should pose minimal safety risks and be aimed at treating conditions that are easy to diagnose via an online assessment. Health care professionals should also be able to prescribe the product confidently after a virtual visit.
  3. Delivery complexity: Drugs best suited for online fulfillment should be easy for the patient to administer (e.g., oral, eye drops). The drug should also require minimal packaging and have simple supply-chain considerations.

In addition to these considerations, pharmaceutical companies might also use a DTP channel for a product excluded from formularies or facing a loss of exclusivity or generic competition, as well as for cash-pay products that have less administrative burden than products typically covered by health insurance. Drug manufacturers also should consider the role that benefits play in patients’ decisions. For reimbursed products, patients might need to consider out-of-pocket costs in light of copay percentage and deductible levels of their health coverage.

Potential DTP partners fall within several categories

Regulatory limitations prevent pharmaceutical companies from owning their own telehealth or online pharmacy capabilities. As a result, they must work with one or more partners to launch a digital DTP channel. The partners can host the patient experience, offer independent telehealth consultations, and/or provide online fulfillment and shipment services for patients. It is important to evaluate the depth of these offerings. For example, online partners might have less extensive data and capabilities than drug utilization review (DUR) programs used by PBMs to flag potential drug interactions and other risks. Instead, online partners are more reliant on patient-reported medical history and medication usage.

There are typically two firewalls between the pharmaceutical company and the prescribing physicians: (1) physicians are paid an hourly rate or by visit to ensure they have no incentive to prescribe; (2) the pharmaceutical company pays the telehealth partner a fixed recurring fee to remove incentives to prescribe.

Many business-to-consumer (B2C) and business-to-business (B2B) companies offer DTP capabilities and services to pharmaceutical companies. Broadly speaking, the companies fall into the following categories: 

  • White-label DTP platforms: These B2B partners offer a turnkey, end-to-end telemedicine and fulfillment infrastructure that pharmaceutical companies can use to host the online patient telehealth and purchase experience.
  • Direct-to-consumer health brands: These are typically younger companies that purchase the product from the pharmaceutical company and sell it through their own online branded channel, often under the startup’s product name.
  • E-prescribers: These businesses host DTP channels’ virtual-telehealth capabilities through which patients can get a prescription online.
  • Fulfillment partners: These are back-end online/mail-order pharmacies that fulfill prescriptions from a telehealth or in-office visit and ship drugs directly to the patient. 

The business goals of a drug manufacturer inform the DTP channel’s design and partners. Pharma product teams can weigh several factors when defining a DTP model: (1) ownership over the patient experience; (2) breadth and depth of consumer data; and (3) desire to drive consumer relationships anchored by loyalty programs.

The time may be ripe for digital DTP

The market is moving toward the direct-to-patient model as the ever-expanding digital world opens the door to new services and consumer-friendly online experiences. This movement could allow pharmaceutical companies to expand access and engage patients more directly.

To unlock the potential of direct-to-patient channels, pharmaceutical companies should navigate several critical decisions: which assets in their portfolio are fit for this channel; what are their business objectives and range of digital services to be offered; what is the desired patient journey; and which partner(s) are needed to successfully launch a digital DTP model? 

Acknowledgements

Emily Huang and Sarah Cornfeld

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