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Direct-to-consumer (DTC) or direct-to-patient (DTP) drug programs have recently gained significant momentum. This pharm-to table strategy is a movement by drug companies to improve their proximity to consumers or patients by cutting out intermediaries and meeting evolving consumer expectations. What started with a few drug companies and products has now become a common sales and marketing strategy, particularly for products that may not be covered by commercial plans, such as weight loss products, hair loss, skincare, and other lifestyle-related conditions. While convenience, savings, and a tailored digital experience drive interest in these programs, patients and providers should be mindful of potential pitfalls.
What Are DTC Drug Programs?
DTC programs sell medications directly to patients through manufacturers or affiliated companies, typically via online platforms. They bypass traditional retail pharmacies and generally operate outside health insurance or employer-sponsored benefit plans. Many platforms also offer telehealth consultations with affiliated healthcare providers, allowing patients to receive prescriptions and have medications shipped directly to them at discounted rates. Discounts often range from 40% to 85% off list prices, significant mainly because there is no rebate payment associated with the fill.
Patients who are most likely to benefit from these programs are those who are uninsured, have high deductibles, or utilize medications that are not covered by their health plans.
DTC Drug Program Considerations
Out-of-Pocket Costs
- When patients spend outside their health plans, drug manufacturer rebates are not generated, which can limit financial benefits to the plan and its participants and may result in net costs higher than what would have been calculated at final claims adjudication.
- Many DTC programs require patients to pay out-of-pocket, which can be costly, especially with ongoing use.
- For patients on health plans, payments to DTC programs typically do not count toward deductibles or out-of-pocket maximums, which can increase their overall spending over time.
- Some DTC programs may charge patients additional fees or monthly subscriptions for convenience features such as telehealth visits and home delivery.
- Patients may use FSAs (Flexible Spending Accounts) and/or HSAs (Health Savings Accounts), if available and applicable to the circumstances, to help cover costs.
Clinical Oversight
- Coordination with a patient’s existing healthcare provider may be limited, potentially leaving gaps in monitoring for interactions, therapy duplications, and continuity of care.
- Increased accessibility may lead to higher medication use, which without proper oversight could result in unnecessary or inappropriate use.
- Increased accessibility and reduced oversight may lead to patients who will not benefit from the medication and could see undesirable side effects.
- Some programs may prioritize product sales over clinical need, cost-effectiveness, and improved health outcomes.
- In certain instances, drug companies may direct patients to certain vendors or doctors who are more favorable to writing prescriptions for the drug companies’ products.
Conclusion
The growth of DTC drug programs has been driven in part by relaxed regulations following the COVID-19 pandemic, which made it easier for online, virtual, and telehealth providers to operate. Additionally, pressure on drug companies to lower prices has played a role, with DTC programs offering at least the perception of cost reduction.
These programs are moving beyond lifestyle and wellness products and are seeing broader adoption across the industry. Coupled with DTC advertising, DTC drug programs have the ability to more significantly influence patient behavior. As with any emerging healthcare development, patients, providers, and employer-sponsored benefit plans should carefully evaluate options, costs, and clinical and financial implications before participating.
