Pharmaceutical giants Eli Lilly (NYSE:LLY) and Pfizer (NYSE:PFE) have recently launched direct-to-consumer telehealth platforms, marking a significant shift in the industry. This move has raised questions about the reasons behind pharma telehealth strategies and why now is the time for these companies to embrace digital health solutions. From combating copycat drugs to leveraging brand recognition, the answer isn’t straightforward, but the strategies offer significant opportunities for growth.
Eli Lilly and Pfizer’s Telehealth Approach
Eli Lilly was the first to jump into the telehealth space in January 2024 with its platform, LillyDirect. The goal was to provide direct-to-consumer telehealth services for obesity, diabetes, and migraines, targeting unauthorized copycat versions of its blockbuster GLP-1 drugs. Pfizer soon followed with its own platform, PfizerForAll, offering similar services for migraines and respiratory vaccines. These moves showcase how pharma telehealth strategies are becoming a tool to drive direct patient engagement and improve sales.
For both companies, the DTC model offers a new way to connect with patients, bypassing traditional intermediaries like pharmacy benefit managers. “The online experience creates a sticky customer base,” said Mike Flaherty, healthcare strategist at Deloitte. According to Flaherty, patients find the online experience of obtaining prescriptions and receiving drugs at home more convenient than traditional methods.
Why Telehealth is the Future for Pharma
The shift to pharma telehealth strategies is not just about convenience—it’s about data. Telehealth platforms allow pharmaceutical companies to collect valuable information on patient behavior and preferences, insights they’ve traditionally been excluded from. This data collection can drive better engagement and sales strategies, ultimately boosting adherence to medications. “The data is incredibly valuable. It helps companies identify trends and friction points, allowing them to improve the delivery experience,” Flaherty noted.
Consumer feedback from telehealth platforms like Ro, Hims & Hers (NYSE:HIMS), and GoodRx (NASDAQ:GDRX) supports this model. Each platform boasts high net promoter scores , indicating strong customer satisfaction and loyalty. According to investor data, Hims & Hers has an NPS of 65, while GoodRx has an even higher score of 74. This positive feedback is encouraging pharmaceutical companies to explore telehealth further, betting that direct engagement will lead to better customer retention.
The Battle Against Copycat Drugs
Another significant reason for adopting pharma telehealth strategies is to combat the growing threat of copycat drugs. Eli Lilly has faced issues with compounders and sellers creating imitation versions of its GLP-1 drugs, often available on platforms like Ro and Hims at a fraction of the cost. While Lilly has sent legal notices, the telehealth platform gives them a more direct line to consumers and a way to build loyalty to the authentic product.
This vertical integration, where pharmaceutical companies offer the drug and the method of access, helps strengthen their market position. “Vertical integration in healthcare, as we see with these DTC platforms, will likely improve margins over time,” said BMO Capital Markets analyst Evan David Seigerman. By cutting out PBMs and pharmacies, companies like Lilly and Pfizer hope to reduce costs and improve profit margins.
Long-Term Implications for Healthcare
The introduction of pharma telehealth strategies is still in its early stages, but it has the potential to disrupt the traditional model of prescription drug distribution. While companies like Walmart (NYSE:WMT) and Walgreens (NASDAQ:WBA) have scaled back their retail health efforts, telehealth is proving more resilient, especially when focused on specific conditions like obesity, diabetes, and mental health.
“The healthcare industry is undergoing a reconfiguration,” Flaherty said, “and telehealth gives pharmaceutical companies a new way to engage with consumers directly.” As more companies adopt this strategy, the long-term implications could be significant. If successful, it could mean greater adherence to medications, more regular sales, and a tighter relationship between pharmaceutical companies and their customers.
The Future of Pharma and Telehealth
While pharma telehealth strategies are still in the exploratory phase, early results suggest that these platforms could be the future of healthcare. Companies like Eli Lilly and Pfizer are leading the charge, and if the data continues to show improved customer engagement and satisfaction, more pharmaceutical companies are likely to follow suit. The goal is clear: build stronger relationships with patients, improve drug adherence, and ultimately, drive growth.
The challenge now is for these platforms to prove they can scale effectively, providing both convenience and cost savings to patients. If successful, the telehealth model could become a new pillar of the pharmaceutical industry, forever changing how patients access medications and interact with their healthcare providers.
Featured Image: Freepik
