Jan 4, 2024 - Business

Eli Lilly to sell weight-loss drugs directly to patients

Illustration of a prescription pill bottle on wheels.

Illustration: Shoshana Gordon/Axios

Eli Lilly is poised to sell medicine directly to consumers — with an emphasis on newly popular weight-loss drugs — in a move toward cutting out the controversial middle players in drug distribution.

Why it matters: Pharmaceutical companies typically aren't in the business of selling their drugs to individuals — but the weight-loss drug boom is sufficiently lucrative to shake up the status quo.

Driving the news: Lilly said Thursday that it will launch LillyDirect, a telehealth platform that will provide patients with prescriptions for conditions like obesity, migraines and diabetes.

  • While a third-party fulfillment service will handle shipping, which is free, patients will be "obtaining medicines directly from Lilly," the company said in a statement.
  • "We're used to buying consumer goods directly from manufacturers all the time on online websites," Lilly CEO David Ricks told NBC News. "It really hasn't been an option that's been provided before" for prescription drugs.

The impact: The move is "poised to upend the traditional go-to-market strategy within the drug area," Lee Brown, global sector lead for healthcare at research firm Third Bridge, tells Axios.

  • Prospective customers of Lilly drugs may appreciate the opportunity to go around their primary care physician and get drugs directly from the company through a discreet prescription, Brown says.
  • "You're eliminating a huge obstacle" for patients who don't want to visit their own doctor, Brown says.

State of play: The announcement comes as drug companies and health-focused firms are rushing to capitalize on a new class of weight-loss drugs, including Lilly's newly approved Zepbound, which will be sold via the new platform.

  • WeightWatchers last year went from focusing largely on diet planning to acquiring telehealth platform Sequence, which offers customers access to weight-loss drugs through medical providers.
  • WW's stock closed down more than 11% Thursday following the Lilly announcement.

Context: It's the latest move toward simplifying drug delivery and pricing.

  • CVS Health last month announced plans to overhaul how it pays for drugs, saying it will use a more "transparent" model that could reduce secrecy around drug prices, Axios' Tina Reed reported.
  • The so-called "cost plus" model is similar to that being used by Mark Cuban's Cost Plus Drugs, a direct-to-consumer model that marks up drugs from cost by 15%, plus a $3 pharmacy fee.

Yes, but: Many consumer watchdogs say pharmaceutical companies play a central role in driving up drug prices.

  • The Institute for Clinical and Economic Review reported last month that eight of the top 10 drugs with net price increases in 2022 "that had substantial effects" on U.S. spending "lacked adequate new evidence to support any price increases."

What we're watching: How this step affects what people actually pay for their treatments.

Go deeper: FDA probing possible weight-loss drug side effects, including suicidal thoughts

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