The Great Healthcare Unbundling: Why pharma will soon own the direct to consumer relationship

The weight loss revolution of 2023-24 isn't really about addressing obesity. It's about something much bigger: the unprecedented transformation in how patients access healthcare. The explosion of GLP-1 telehealth platforms has demonstrated an undeniable truth – patients are ready and eager to take control of their health journeys. But like many revolutions, the pioneers who sparked it may not be the ones who ultimately profit from it.

The Gold Rush That Was

When renowned US healthcare analyst Umer Raffat at Evercore ISI recently identified the seasonal correlation between the spike in GLP-1 prescriptions and the annual January gym membership surge – he inadvertently highlighted a deeper truth about the current telehealth gold rush.

Weight loss drugs have stellar growth in initial sign-ups in the first half of the year followed by slower gains in the second half. Raffat revealed a market addicted to growth and blind to fundamental business vulnerabilities, calling into question the astronomical valuations of weight loss telehealth platforms in the US, Europe and Australia. Why were telehealth platforms valued at 15-20 x revenues compared to 6 – 8 x revenues for traditional healthcare companies?

All of these new direct to consumer platforms' are built on arbitraging inefficiencies in the delivery of traditional healthcare. But arbitrage opportunities vanish once they are obvious to everyone, especially when manufacturers enter the market.

Big Pharma goes Direct to Consumer

The recent launch of LillyDirect.com and Pfizer for All signals more than just new distribution channels – it represents Big Pharma's awakening to the direct-to-consumer opportunity. 

As Eli Lilly's CEO David Ricks puts it, "We know people want convenience, and that's what this platform aims to achieve." 

This isn't just about convenience; it's about owning the patient relationship.

Size and scale hard to ignore

The numbers behind this transformation are staggering:

• The GLP-1 market alone is projected to reach $100+ billion by 2030
• Direct-to-consumer healthcare spending is growing at 40% annually
• Patient initiation rates are 3-4x higher through digital channels versus traditional care
• Customer acquisition costs in traditional healthcare can reach $1,000+ per patient
• Lifetime value for chronic condition patients can exceed $10,000

But these figures only scratch the surface. The real opportunity lies in the broader transformation of how prescription medications are prescribed and managed:

• 70% of Americans take at least one prescription medication
• The global prescription drug market exceeds $1.4 trillion
• Digital health interactions are becoming the norm, with 60% of patients preferring digital-first healthcare experiences
• Medication non-adherence costs the healthcare system $300 billion annually

For pharmaceutical companies, building direct patient relationships isn't just about distribution – it's about:

• Improving medication adherence
• Gathering real-world evidence
• Reducing customer acquisition costs
• Enhancing patient outcomes
• Creating new revenue streams through service offerings

The Commoditization Trap

Independent telehealth platforms are already showing signs of distress. The race to the bottom on consultation fees, desperate ventures into pharmaceutical compounding, and skyrocketing customer acquisition costs all point to the fundamental weakness in their position. When your core service – connecting patients with prescribers – becomes commoditized, no amount of fancy marketing can save you from margin compression.

Just ask Jenny Craig or Weight Watchers how that story ends.

The Future is Patient Empowerment (Just Not How We Imagined)

New digital technologies are only going to make more treatments available to more people no matter where they live or what they earn.

Life science and pharmaceutical companies will increasingly own the digital rails the revolution runs on. They have every incentive to make access easier, more convenient, and more patient-centric. The signs are everywhere in the market.

• More life science companies are building direct-to-consumer platforms
• They are also integrating prescription, fulfilment, and support services
• Investment in patient education and engagement tools is on the rise
• The approval and certification of digital therapeutics and companion apps is rising.

Winners and Losers

The winners in this transformation will be patients, who gain more convenient access to medications and care as well as the pharmaceutical companies that successfully build direct patient relationships and maintain them. Technology providers who power these platforms without trying to own the patient relationship will also have a key role.

The losers will be independent stand-alone platforms that try to be the gatekeepers between patients and medications.

The Road Ahead

Patient empowerment through digital health is here and growing. The ability and expectation of being able to initiate care from your phone, get prescribed medication without waiting months for an appointment, and manage your health digitally is only going to become the basic standard, if it hasn’t already.

Just as Amazon built the infrastructure for global e-commerce it now dominates, pharmaceutical companies will increasingly own the same rails for digital patient engagement and the delivery of therapies and treatments.

The current first crop of telehealth pioneers and platforms that emerged from the pandemic have shown pharma and life science companies what's possible.

For investors, the message is clear. The greatest future returns will come from the companies who make the products, not just those who add a mark-up and distribute them.

For healthcare entrepreneurs, opportunity lies in building the tools and technologies that enhance direct-to-consumer channels, making them as seamless as they are in other industries like travel and banking, not in trying to stand between manufacturers and their patients.

The future of healthcare for pharmaceutical and life science companies is direct-to-consumer. The manufacturers will own the relationship.

Maybe that’s how it should have always been given they have invested billions in R&D and clinical trials. It makes sense to have a direct line to the patients who need them.

Technology can help make the connection seamless rather than acting as tollbooth along the way.  

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About the Author

I am the CEO of RoseRx, a technology company that helps pharmaceutical and life science companies build patient-centric service infrastructure. Prior to founding RoseRx, my co founder and I built and operated one of Australia's largest direct-to-consumer telehealth services. This unique perspective – having been both a major telehealth provider and now enabling pharmaceutical and life science companies' direct-to-consumer initiatives – informs my thoughts of healthcare's digital future.

Footnotes

1. Financial Times - "UK regulators probe online pharmacies over weight loss drug advertising" (2024)
2. The Guardian - "Australian weight loss company Juniper issued warning over advertising" (2023)
3. Bloomberg - "Hims & Hers Under Scrutiny for Prescription Practices" (2023)
4. MHRA Public Assessment Report - "Review of Online Prescribing Services" (2024)
5. Australian TGA Warning Notice - "Compliance action against telehealth providers" (2023)
6. Pfizer plans direct-to-consumer platform for Covid and migraine treatments https://www.ft.com/content/4e7a2bc7-0de7-4948-bfd3-bda210e56c12‍
7. WSJ.com – Weight Loss Drugs Like Gym memberships (2025) https://www.wsj.com/finance/stocks/are-weight-loss-drugs-like-gym-memberships-the-answer-is-worth-billions-3368ae3e?mod=Searchresults_pos1&page=1