Healthcare executives are facing a watershed moment. The pharmaceutical distribution model that's dominated the industry for decades is being disrupted—not gradually, but suddenly. As Direct-to-Consumer (DTC) platforms proliferate in response to regulatory pressure and patient demands, leaders must decide: Will you adapt proactively, or reactively?
As Ernest Hemingway wrote in The Sun Also Rises: "How did you go bankrupt?" Bill asked. "Two ways," Mike said. "Gradually and then suddenly." That's exactly what's happening in pharmaceutical distribution right now.
At Kenway Consulting, we've guided healthcare and life sciences organizations through complex operational transformations in data strategy, regulatory compliance, and process optimization. The DTC shift represents one of the most significant structural changes we've observed in pharmaceutical distribution, and one of the most opportunity-rich for organizations that approach it strategically.
Throughout the last few years, only a select few big pharma companies have broadened their sales offerings through DTC platforms. While obesity market leaders, Eli Lilly (LillyDirect) and Novo Nordisk (NovoCare Pharmacy), paved unique DTC paths to account for the explosion in demand for their GLP-1 drugs, most other leading companies in the industry held back – that is, until recently.
In July, President Donald Trump issued letters to 17 major pharma CEOs calling on them to enact Most Favored Nation (MFN) pricing for their “full portfolio of existing drugs… for every single Medicaid patient” which would align the prices of branded drugs in the U.S. to those in other developed nations. In the same set of letters, President Trump also instructed drugmakers to expand their DTC and Direct-to-Business (DTB) offerings for “high-volume, high-rebate prescription drugs so all Americans get the same low MFN prices that manufacturers already offer to third-party payers.”
In the weeks and months to follow, a more comprehensive DTC infrastructure quickly took shape across the industry.
Given the highly fluid nature of the policy environment, it stands to reason that additional industry players will establish drug-pricing partnerships with the Trump administration.
However, separate from these ongoing efforts, a plethora of other pharma companies have, in rapid succession, rolled out platforms of their own. Amgen, Boehringer Ingelheim, Bristol Myers Squibb, Genentech, Novartis, and others have all launched DTC sales offerings within the past month, and while the primary impetus behind this shift is almost certainly related to the regulatory environment (i.e., proposed tariffs), that is not to say there isn’t a more fundamental business case to be made in favor of DTC platforms for the pharma industry.
The circumstances that originally incentivized Eli Lilly and Novo Nordisk to establish DTC platforms for their GLP-1 compounds are partially unique to the obesity market. As a result of the ongoing insurance coverage gaps in the space, Lilly and Novo began selling their GLP-1s directly to consumers, bypassing middlemen such as pharmacy benefit managers (PBMs) and wholesalers. This decision enabled cash-paying consumers to purchase the medication at a discounted rate, thereby increasing overall treatment access and affordability.
While this represented progress, access and affordability are not problems solely for patients whose insurance plans do not cover their condition (e.g., obesity). They’re also problems for patients who possess high-deductible plans or are outright uninsured. Moreover, when considering that – according to a recent survey conducted by Model N (a life sciences revenue management software solution), up to 40% of respondents had skipped or delayed a prescription due to financial concerns – the logic for advancing DTC platforms as another potential avenue for lowering drug costs and improving patient outcomes becomes even clearer.
Though central to the overall calculus, increased access and affordability are not the only reasons pharma companies might consider pursuing DTC models.
However, this willingness among consumers to embrace non-traditional avenues of healthcare is also connected to a much more fundamental phenomenon with which the industry must reckon. In many cases, traditional access models are proving insufficient, accelerating already declining levels of trust in healthcare and the pharmaceutical industry. According to research from Johns Hopkins University, public trust in the U.S. healthcare system fell from 71% to 40% in the years between 2020 and 2024.
Therefore, the question with which industry players must wrestle hinges on how they’ll embrace the innovation and creative thinking necessary for improving patient relationships while simultaneously navigating the myriad “countervailing winds of change” (e.g., patent cliff, stagnant R&D productivity, AI) that my colleague, Luke Otto, discussed in a recent white paper, Transforming Biopharma Operating Models for the Future.
DTC models represent one potentially meaningful way of doing so – by removing friction from the value chain, increasing access and affordability, and providing greater transparency and personalization, pharma companies can transform the impact they have on patient lives.
However, this space is moving quickly; and while speed is often a virtue, other factors must be taken into consideration as well.
DTC platforms enable a level of speed and flexibility not typically on offer through traditional channels, but realizing that potential requires properly integrated data systems that can scale. Traditional intermediary players like PBMs and wholesalers represent hundreds of billions of dollars of value within the pharmaceutical manufacturing ecosystem. Given the historical size of their role in industry operations, transitioning to DTC models requires significant organizational and logistical reconfiguration.
Organizations that succeed architect operating models that maintain robustness at scale while enabling the velocity DTC demands—balancing financial stewardship with high-impact solutions that serve client best interests.
Data Strategy & Actionable Insights
Going directly to consumers will generate, and provide access to, data that may have not been previously available through traditional distribution methods. However, unstructured information doesn't automatically translate to competitive advantage. Organizations need strategies that transform patient interaction data into actionable insights while ensuring both patients and physicians receive updated, accurate information throughout the care journey.
Success requires sophisticated change management capabilities and data governance frameworks that turn DTC engagement metrics into improved patient outcomes, operational efficiency, and competitive intelligence.
Regulatory Compliance & Data Privacy
Given the relative novelty of DTC models in the industry and the personalized engagement that can be achieved through them, regulatory scrutiny is a high likelihood. Maintaining compliance while safeguarding operational integrity requires proactive strategies that embed privacy and data security into platform design from the outset—not as afterthoughts.
Organizations that treat regulatory compliance and data privacy as strategic advantages build patient trust and create differentiation in an increasingly crowded market.
The shift to direct-to-consumer pharmaceutical distribution isn't slowing down—and waiting for clarity may mean falling behind more agile competitors. Healthcare leaders who act now can turn regulatory pressure into strategic advantage.
Whether you're evaluating your first DTC platform or optimizing an existing offering, Kenway's cross-functional expertise in data strategy, operational design, and regulatory compliance helps transform complexity into competitive advantage.
Schedule a consultation to discover how Kenway can help your organization thrive in the evolving pharmaceutical distribution landscape.