Will Pharmaceutical Firms Sell Directly to Patients?

Article excerpt

Taking the direct-to-consumer (DTC) concept a step further, some pharmaceutical companies are considering the risks and rewards of selling their prescription products directly to patients, according to an industry executive.

Consumer inquiries to drug company Web sites about buying prescription products have highlighted an opportunity for manufacturers to sidestep the traditional distribution chain and sell direct to the patient, according to Jean Paul Gagnon, MD., director of public policy, Aventis Pharmaceuticals Inc. Speaking at the recent annual meeting of the American Pharmaceutical Association, he said the Internet has opened the door for different players, induding drug companies, to sell products outside the traditional value chain.

Drug manufacturers are already selling direct to consumers indirectly, Gagnon said. He pointed to the example of YouRxPlan.com, the online joint venture between MerckMedco and Readers Digest that offers discounts to the 80 million Americans with no drug coverage. Members who pay the $25 fee to join can purchase their Rxs at discounts ranging from 10% to 40%. They earn another 10% discount if they buy from the Extra Savings Drugs formulary.

"If you combine the two, you get a 20% discount from buying at YouRxPlan.com, which is the average gross margin for a chain pharmacy," Gagnon said. "So you're buying almost direct from Merck and the other companies involved to get that kind of discount. …