Is a New Trend -- Phony Pharm to Table -- Emerging?

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INFLECTION POINT/ Hims & Hers & Lilly & a Phake Pharm-to-Table Effort

The core of the “pharm-to-table” idea is, I think, the ability of pharma companies to curate an end-to-end experience. 

I’m using the word “curate” very deliberately. Pharmaceutical companies aren’t providing the experience themselves. They’re selecting partners -- on the telehealth end, on the fulfillment end, or both -- where they can be confident in what will be delivered for patients. 

They’re curating. 

So it stands to reason that companies will push back on endeavors that look like -- but are not -- carefully curated pharm-to-table offerings that don’t deliver for patients. This has not really been a thing, though. 

Until yesterday. 

Hims & Hers announced that they would begin carrying Lilly’s Zepbound, a move that generated a lot of press for Hims. The Wall Street Journal wrote it up. So did Reuters. Nice little PR coup there. 

Only the Hims program has zero to do with Lilly or LillyDirect, and Lilly took pains to make that clear, pushing out a public statement to make clear that Lilly has “no affiliation with hims & hers.”

On one level, that’s a little weird. After all: The more options for access, the better, right? 

But on another level, on the curation level, the Hims announcement is a huge violation. The patient experience around Zepbound is, ahem, not ideal. 

Hims said that it’s pricing Zepbound at $1,899. That’s almost twice the list price of the drug and three or four times the LillyDirect cash price. It’s hard to imagine a way of getting a worse price on Zepbound. Which means that the whole “we have Zepbound” thing is a marketing ploy more than anything else. 

And to make it worse, it’s a marketing ploy by a company that has spent millions bashing innovators and glorifying compounding. No wonder Lilly is upset. Hims is not pharm to table. It’s the pharma equivalent of Taco Bell’s “Cantina” menu. 

THE ARC/ You Can’t Talk U.S. Drug Prices Without Talking U.S. Generic Prices

We are, I expect, about to continue an exceedingly unhelpful policy discussion about the difference between prices in the United States and other countries. 

The latest round of interest in the topic was spurred by a white paper last month by Trump-aligned policy folks at America First Policy Institute. The paper argued for efforts to standardize prices across the developed world, bringing up prices in other countries and dropping them in the United States. 

I’ve talked a bit about why the policy elements here are tough to make real, but it’s worth pulling back a moment and looking at the fundamental assumption. Are drug prices really higher in the United States? 

I don’t want to be Pollyannish here. The answer is unequivocally “yes.” Prices are higher here. But we also talk about prices in ways that exaggerate the gap between U.S. and ex-U.S. prices. And it’s worth exploring that. 

Here, I’d likely borrow an argument from Mel Whittington from the Leerink Center for Pharmacoeconomics. She details this in much more detail in a newsletter from Feb. 25. (The newsletter isn’t archived, but I’ll send it if you’d like.)

Mel makes the point that you shouldn’t look at the price of a medicine at a single point, early in its lifecycle, when the U.S. price is going to be a lot higher, rather than looking across the life of a medicine and considering the impact of genericization. 

Because rapidly pushing the market toward ultra-cheap generics is the one cost-control tool that the United States uses better than any other country. It is the fundamental lever that explains why the United States doesn’t spend more on drugs as a percentage of health spending than the average high-income country. We spend more early on and save more later. 

Mel does some back of the envelope math based on this study that both highlights the gap in branded prices and how rapid genericization blunts the effect. Here’s what this looks like graphically:

To take Germany as an example, when you look at the 8 years before and the 8 years after the loss of exclusivity, the overall price of a medicine in the United States is just a tick higher. In other countries, too, the gap is slashed. 

Mel highlights a number of caveats. She doesn’t have all of the data, so there are various guesses and assumptions baked in here. And there’s no adjustment that suddenly brings U.S. prices in line with the rest of the world. 

But it’s all a reminder that looking at the U.S. pharmaceutical market in the broadest possible way provides a different, arguably more useful perspective. Yes, meds may be more expensive here. But by less than you might think. 

QUICK TURNS/ No 340B News Today (but I’m holding an update or two for tomorrow!)

• Gallup and West Health have been asking a simple poll question for a few years now: “If you needed access to quality healthcare today, would you be able to afford it?” The number of people answering “no” is now at 35%, an all-time high. The data that Gallup presented doesn’t have a lot more detail or a way to apportion blame, but it’s a reminder that even at a time where the U.S. has record-high insurance rates, a huge number of Americans are not secure from a health POV.
  

• Tariffs will be announced today (if they haven’t already hit). Will that impact the price of generic drugs? Of course, said generic drug impresario Mark Cuban. “We won’t have a choice.”
  

• This is a good effort -- from Brookings’ Richard Frank and Wash U’s Rachel Sachs -- to identify the issues that are likely to crop up next year, when Part B drugs begin the IRA price-control process. They flag some unanswered questions about how medicines that are sold under both Part D and Part B will be handled, but the real issue to watch is the question of what can be done to keep providers from abandoning buy-and-bill drugs once lower “maximum fair prices” kick in.
  

• Today’s lol. 

Cost Curve is produced by Reid Strategic, a consultancy that helps companies and organizations in life sciences communicate more clearly and more loudly about issues of value, access, and pricing. We offer a range of services, from strategic planning to tactical execution, designed to shatter the complexity that hampers constructive conversations. 

To learn more about how Reid Strategic can help you, email Brian Reid at [email protected].