Radar on Drug Benefits

Although 2023 trained a harsh spotlight on the country’s dominant PBMs — pressuring some to introduce new pharmacy pricing models — industry observers tell AIS Health, a division of MMIT, that this year may not be nearly as paradigm-shifting.

Take, for example, potential policy action aimed at changing PBMs’ increasingly criticized business models, particularly those associated with the Big Three PBMs: The Cigna Group’s Express Scripts, CVS Health Corp.’s Caremark, and UnitedHealth Group’s Optum Rx.

Eli Lilly & Co. will sell its glucagon-like peptide-1 (GLP-1) weight loss drugs directly to consumers through a telehealth service called LillyDirect, the drugmaker revealed on Jan. 4. Pharmacy benefit experts say that the move is sure to improve market access for Lilly’s weight loss drugs, but they also say that the impact of the new service on PBMs is likely to be minimal.

LillyDirect will contract with “independent healthcare providers,” per a press release, to prescribe the GLP-1 tirzepatide, known by the brand names Mounjaro () and Zepbound. Weight loss-focused telehealth provider Form Health Inc. will be one of those partners, NBC News reported. LillyDirect will also provide “tailored support” from unnamed providers. The service will also feature free “direct home delivery…through third-party pharmacy dispensing services.”

With the launch of a new website, Eli Lilly and Co. recently became the first pharmaceutical company to offer weight loss medications though a telehealth provider. The platform — LillyDirect — comes less than two months after Lilly’s weight loss drug Zepbound (tirzepatide) gained FDA approval and joined fellow glucagon-like peptide 1 (GLP-1) agonists from Novo Nordisk A/S, Wegovy (semaglutide) and Saxenda (liraglutide), in the burgeoning obesity drug market.

The weight loss medication market is currently dominated by Wegovy, a once-weekly injectable drug. The FDA initially approved semaglutide for Type 2 diabetes under the brand name Ozempic, but the agency expanded the indications to include weight management three years ago. Pharmacy formularies that cover more than half of commercial-plan enrollees categorize Wegovy as “preferred” or “preferred with utilization management restrictions,” — such as prior authorization and/or step therapy — according to MMIT Analytics. (MMIT is the parent company of AIS Health.)

CVS Health Corp.’s Caremark is the latest big PBM to offer clients new pricing models that the company claims will increase transparency and reduce overhead. Experts say that the new offerings are not as transparent as CVS claims they are, and constitute a response to various pressures including likely federal PBM reforms, scrutiny from plan sponsors and disruptive business trends like the growth of Mark Cuban Cost Plus Drug Co.

Most experts expect that the new CVS offerings, called CostVantage and TrueCost, will only make a marginal difference — if any — in either drug costs or price transparency. Industry observers point to similar product rollouts by the other two of the Big Three PBMs, UnitedHealth Group’s Optum Rx and The Cigna Group’s Express Scripts, neither of which seemed to dampen the firms' PBM earnings. Express Scripts’ ClearCareRx and Optum Rx’s Cost Clarity launched in April and May, respectively. Express Scripts also rolled out a new “cost-plus pharmacy pricing” option, called ClearNetwork, in November.