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Friday, September 6, 2024

'Why Big Pharma is betting on telehealth strategies'

This year two large pharmaceutical companies — Eli Lilly (LLY) and Pfizer (PFE) — have launched direct-to-consumer strategies, raising the questions: Why are drugmakers investing in this and why now?

The answers are not one-size-fits-all, according to industry experts. For Lilly, which was the first to launch this year in January, it's about stamping out unauthorized copycats of its blockbuster GLP-1s. It's now offering direct-to-consumer telehealth and prescription delivery services for obesity, diabetes, and migraines from its website, LillyDirect. For Pfizer, the goal is to leverage the brand recognition it gained from its COVID-19 vaccines and parlay it into stronger sales for other diseases. It's now also offering telehealth and prescription delivery on its platform PfizerForAll for migraines and its respiratory vaccines.

But one common factor, which could prompt other pharmaceutical companies to adopt a direct-to-consumer model, is that the online experience is creating a sticky customer base in the health space. That's according to Mike Flaherty, a healthcare strategist and partner at Deloitte.

"If you look at the data about online experiences, particularly acquiring prescriptions and then drugs-to-home delivery, many patients or consumers will tell you that their experiences ... are better than the traditional model," Flaherty said.

The consumer feedback is based on what is known as a net promoter score (NPS), Flaherty said, a measure of customer loyalty and satisfaction based on survey results. The NPS was created by Bain & Company and ranges from -100 to 100, where an NPS of over 50 is considered acceptable.

Some popular examples of successful online health platforms are Ro, Hims & Hers (HIMS), and GoodRx (GDRX), which all offer telehealth and prescription services. Hims has an NPS of 65, according to an investor presentation in 2020. GoodRx has an NPS of 74, according to its latest data. Ro decline to provide its net promoter score. Sesame, a newer platform that has partnered with Costco (COST), has a score of 81.

Flaherty said the data points to an attractive model for a pharmaceutical company looking for ways to sell more drugs to patients and keep them coming back.

"Because part of what I'm trying to do is identify patients who are a good match to my medication, get them on treatment. But ultimately, I want them to persist — that's one of the economic drivers for a pharmaceutical company," Flaherty said.

Why now?

While there have been recent failures in attempts to consumerize healthcare, such as the closures of retail health locations by Walmart (WMT) and Walgreens (WBA), the telehealth world has had some success — especially when segmented by specialty.

It has made it easier for consumers looking for information on a specific disease — say diabetes or obesity or even mental health — to search online. This leads to websites for telehealth platforms, which provide answers and then offer quick and easy avenues for care.

"The healthcare industry is undergoing a reconfiguration," Flaherty said. "The knowledge and the power within the industry (has not been) easily accessed by the consumer, and that's been changing."

Fueling the strategy's appeal is the fact that consumer habits online are more predictable, thanks to data collection that helps a company gain insight into who its consumers are.

"You know what's valuable in all this? The data. There's a way in which, if you're collecting data that's teaching you about the markets engagement that you then use to identify either good trends ... or friction points, and you can respond to both to improve the delivery of the experience," Flaherty said.

The traditional model doesn't give pharmaceutical players insights or engagement with patients, Flaherty said.

Now, in a world where most patients, and especially future generations, are likely to engage online — and have multiple avenues to do so that include wearables and smart speakers — the legacy companies are taking a step back to understand their role in the online economy.

"I, as a pharmaceutical company, haven't seen patterns of choice and haven't had visibility, but online gives me an opportunity to do that," Flaherty said.

If the direct-to-consumer platforms are built well and the strategy gains popularity, the win could be greater adherence to medications in the near term — an ongoing problem in the industry — which would result in more regular sales of the drugs in the long term.

One of the most compelling ideas behind the direct-to-consumer strategy is to battle the copycat weight-loss drug competition that the GLP-1 companies, Lilly and Novo Nordisk (NVO), are facing. Lilly has sent legal notices to compounders and sellers of the imitation versions of its drugs. But it hasn't been able to stop the sales of imitations on platforms like Ro and Hims — the former of which is aggressively advertising weight-loss drug access at a fraction of the cost of the branded versions.

Will DTC cut out PBMs?

The most obvious byproduct of this effort is that it could upset the opaque and confusing prescription system in the US, dominated by insurers and pharmacy benefit managers (PBMs), as well as result in greater sales of a product — especially at a time when patients often seek out doctors for specific drugs, rather than the doctor choosing.

But for now, the strategy is new and remains to be evaluated. That includes what the metrics of success will be.

"They're in a period of exploration and establishing the connection [with patients]," Flaherty said.

Lilly has said so far on earnings calls that the products ordered through LillyDirect have been "fairly limited" for the first half of the year.

Short-term limitations include availability of options, tweaking the process, and finding patient pain points, as well as understanding which products are not going to be easy for patients to handle.

But the process "can be economically viable over the medium and long term," Flaherty said.

It's why more companies are likely to follow Lilly's and Pfizer's example. The hope is that with the launch of these new consumer-facing platforms, drug companies will be playing a greater role in investing in digital health — and maybe creating a new model of vertical integration.

BMO Capital Markets research analyst Evan David Seigerman explained as much in a note in January, when Lilly first announced LillyDirect — noting it creates a new type of vertical integration in healthcare.

"We view Lilly's support as a gentle, arms-length vertical integration. The DTC program is likely to improve margins over time and drive engagement, which deepen Lilly's metabolic moat," he said.

And whether or not this creates a new world order for prescription drugs is yet to be seen.

"That model of the PBMs and you and I going down to 123 Main Street, to the corner drug store, will still exist for a long time," Flaherty said.

BMO's Siegerman, meanwhile, thinks things could change.

"The announcement did not provide color on whether this program will impact the cost to patients and payers, although we anticipate the program to improve margins over time as PBMs and pharmacies themselves are removed from the transaction," he wrote

https://finance.yahoo.com/news/why-big-pharma-is-betting-on-telehealth-strategies-205258463.html

'Biden Steals Trump's Idea To Launch Sovereign Wealth Fund'

Two days ago when president Trump first floated the idea of a sovereign wealth fund...

... hard-core Democrats and/or socialist billionaires balked at the idea, mocking it as wannabe Saudi Arabia.

Trump, speaking to economic leaders on Thursday, said he envisioned the fund as a way to address persistent debt issues and said it would be funded through his plan to impose tariffs on all imports.

“We’ll be able to invest in state-of-the-art manufacturing hubs, advanced defense capabilities, cutting-edge medical research and help save billions of dollars in preventing disease in the first place,” Trump said. “And it is many of the people in this room who will be helping to advise and recommend investments for this fund.”

But expect all the leftist critics to positively love the idea now, just a few hours later, because late on Friday Bloomberg reported that the Kamala/Biden admin has stolen yet another idea from Trump (after eliminating tax on tips, and stimulating new business creation): aides to Joe Biden "have been crafting a proposal to create a sovereign wealth fund" that would allow the US to invest in national security interests including technology, energy, and critical links in the supply chain, a person familiar with the effort, told Bloomberg.

As Bloomberg admits, the "behind-the-scenes work" by NSA Jake Sullivan and his deputy, Daleep Singh, mirrors - at least in spirit - a proposal floated Thursday by Republican presidential candidate Donald Trump, who called for a government-owned investment fund to finance “great national endeavors” during a speech to the Economic Club of New York. Of course, it would look just a little suspicious if the admin of the president in absentia were to float a wealth fund idea just one day after Trump did the same, so Bloomberg had to make it seem that Biden had been working on their version of Trump's idea "for months" and that's precisely what it said:

Sullivan and Singh have been working on the project for months across a series of weekly brainstorming efforts, and have met with economic experts on the National Security Council to debate the size, structure, funding, leadership, and potential guardrails for a proposed fund.

It wasn't clear if it was the "sources" that clarified on the ongoing duration of the project, or just Bloomberg's attempt to make the latest policy theft appear a bit more organic. It gets funnier:

The work has progressed to the point where planning documents have been circulated among White House staffers and key agencies, according to the person familiar, who requested anonymity to discuss internal deliberations.

Sure it has: and Biden waited until 2 months before the end of his presidency to make the push... or rather waht push:

But even as the work has progressed, key details — including, critically, the fund’s structure, funding model, and investment strategy — remain unclear.

And so, just like every aspect in Kamala's policy agenda, we'll have to wait for Trump to reveal the details of his own plan before "sources" leak what Biden was working on before he decided to hit Rehoboth beach permanently after Nancy Pelosi's July putsch. One thing is certain though: whether it its Trump or the puppetmasters who control Kamala, a SWF - especially one of material size in the $1+ trillion range - will lead to another sharp spike in US debt, pushing US debt sharply higher from its latest record daily print just over $35.3 trillion, and making holders of non fiat assets richer as the US careens toward a monetary and fiscal solvency crisis.

https://www.zerohedge.com/economics/biden-steals-trumps-idea-launch-sovereign-wealth-fund

Harris’ Donors Privately Urge Firing of FTC’s Khan, SEC’s Gensler

Major Democratic donors on Wall Street are increasingly pushing Kamala Harris’ team to replace top regulators Lina Khan and Gary Gensler if the vice president wins in November.

On calls with her staff and at fundraisers, deep-pocketed donors have repeatedly named Khan, chair of the Federal Trade Commission, as impeding the technology sector and other lucrative parts of the economy, according to people familiar with the matter.

The private conversations about having her replaced have intensified since public calls for her ouster in July from Barry Diller, chairman of IAC Inc., and LinkedIn Corp. co-founder Reid Hoffman, who said Khan was “waging war on American business.”

Khan, 35, was appointed by President Biden in 2021 and is a favorite of progressive Democrats like Elizabeth Warren, who called her appointment “tremendous news.”

Her time at the FTC has frustrated dealmakers from San Francisco to New York, who have experienced a relative drought of activity in recent years.

Democratic donors on Wall Street will likely keep lobbying in private for Khan to be replaced, some of the people said.

However, it’s unlikely any of them are withholding contributions based on her fate at the FTC, and no clear communication has been given to donors about Harris’ position on Khan, they stressed

Meanwhile, Gensler, whose term as head of the Securities and Exchange Commission is up in 2026, is disliked privately by both Democratic and Republican donors, some of the people said. Gensler has pushed for tougher regulations, but donors have particularly bristled at what they perceive as him talking down to Wall Street, the people said.

Billionaire Mark Cuban, a supporter of Harris, told CNBC this week that the SEC “needs to change” and that he’s asked the vice president’s team to “put my name in for the SEC.”

Donald Trump pledged at a crypto conference that if elected he would fire Gensler.

The Harris campaign didn’t provide a comment for this story.

Douglas Farrar, an FTC spokesman, declined to comment. A spokesperson for Gensler said in an emailed statement that the SEC’s projects “are making our capital markets more efficient, transparent and resilient.

”

Tricky Position

For Harris, who’s trying to walk a fine line between attracting donors and appealing to the party’s progressive wing, the pressure to remove Khan and Gensler puts her in a tricky position. While she’s long represented Silicon Valley as senator for California and is well-versed in antitrust debates, Harris has also sought to appeal to Americans irritated by price-gouging, big corporations and Wall Street

Antitrust lawsuits filed by the FTC under Khan’s leadership have sought to block Microsoft Corp. from buying video-game publisher Activision Blizzard Inc. and aimed to halt the $25 billion grocery-store merger of Kroger Co. and Albertsons Cos.

So far, the FTC has a mixed record in stopping deals, having lost two early cases, but has had more success in recent lawsuits.

Two donors close to Harris’ campaign said the argument being presented against Khan is that the FTC’s efforts to hold up mergers are hurting the economy. The idea is that if Harris wants to project herself as pro-growth and pro-business — as she and surrogates have sought to do — Khan will need to be replaced, the people said

Members of the FTC can only be fired in cases of “inefficiency, neglect of duty, or malfeasance in office,” according to federal law, though the president can designate another commissioner as chair.

While Khan’s term expires in September, she can remain in office until the Senate confirms a replacement. That would allow Harris to select a new FTC chair if she wins, though it can take a year or more for a nominee to make it through the confirmation process

As for Gensler, much of the frustration on both sides of the aisle stems from the SEC’s efforts to crack down on the digital asset industry, which Gensler has described as flagrantly violating securities laws.

No Compromise

Both regulators came into their positions with “a fairly aggressive regulatory agenda and have taken some big steps to try to carry that out,” said Jill Fisch, a professor at the University of Pennsylvania Law School. “They weren’t looking to play it safe. They weren’t looking to compromise.”

It’s a challenge to deal with differing views on regulation running through the Democratic party, Fisch said. Historically, the FTC and SEC were close to the industries they oversaw and were intended to be walled off from their policy being overly driven by politics, she said.

“Right now it’s no longer what’s most sensible to do from a market and industry perspective, but what’s politically salient, and what’s going to please political leaders—and that’s a very tough path to navigate,” Fisch said.

Hoffman, who has donated $10 million to the Harris campaign, appeared to walk back his remarks about Khan in a follow-up interview, saying he hasn’t spoken to the vice president about his concerns and seeking to distinguish between his role as a donor and an expert on the tech industry.

Diller also said in a July CNBC interview that he would urge Harris to drop Khan, before also reining in his comment.

Hoffman and Diller are worth $5.1 billion and $5.4 billion, respectively, according to the Bloomberg Billionaires Index.

Both are also affiliated with companies facing FTC scrutiny

Hoffman declined to comment for this story. An IAC representative didn’t reply to an emailed request for comment.

Many donors have privately expressed frustration at the duo’s public remarks against Khan, calling them counterproductive and making it more challenging for a potential Harris administration to make changes at the FTC without seeming beholden to billionaires’ money, according to some of the people.

https://www.bnnbloomberg.ca/business/company-news/2024/09/06/kamala-harris-donors-privately-urge-firing-of-ftcs-khan-secs-gensler/