Prescription Drug Pricing in America

“Big Pharma has a new vision for selling drugs. It’s going to the mattresses,” writes Josh Nathan-Kazis in MSN earlier this week. That is, going direct-to-consumer (DTC) the way the mattress industry has done in the past decade, cutting out brick-and-mortar sleep shops at retail. In the case of “Make(ing” like a mattress company,” Josh explains, the pharma manufacturers “sell shots and pills straight to the consumer.” In this case, that’s cutting out the pharmacy benefits managers and other intermediaries that have taken dollars in the transactions of drug benefit claims which have added costs to payers (health plan sponsors like employers and government payers and consumers alike). Welcome to Part 2 of 3 in my consideration of Prescription Drug Pricing in America. You can catch up with yesterday’s Part 1 post here. Health care cost increases forecasted for 2026 will, in significant part, be driven by prescription drug trend. This graphic from this week’s release of the Business Group on Health’s employer survey on healthcare cost growth to 2026 illustrates a key finding that’s echoed in other similar studies recently released and covered here in Health Populi. A kay cost-contributor cited in all of these health cost forecasts is the prescription drug line item: specialty drug prices, and specifically the costs of GLP-1 medicines and cancer therapies. In this, Part 2 of a 3-part post, I will discuss this week’s news from Novo Nordisk on their launch of a direct-to-consumer/-patient platform to deliver GLP-1 medicines at a deep discount – part of the many factors re-shaping prescription drug pricing and the supply and demand dynamic increasingly consumer/patient-driven. Earlier this week, Novo Nordisk announced that it would drop the cash price of Ozempic, the popular GLP-1 drug, by 50% — to $499 a month for people who lack health insurance or are otherwise self-pay, cash-pay patients. The announcement noted that consumers could buy the medicine directly from Novo Nordisk’s NovoCare platform or via GoodRx, the discount drug platform. (GoodRx had a dramatic 39% stock price rise on the day, shown in the graphic here from Moby.Invest’s Instagram feed). Khac Phu Nguyen of Yahoo! Finance offered an insightful analysis of the event: there’s a political context to this story, where most recently the Trump administration has sent letters to drugmakers critical of high-priced prescription drugs. “Ozempic became the poster child for the US-vs-world drug cost divide,” Nguyen commented. “Whether it’s a PR play, a volume game, or a way to undercut compounders eating into market share, one thing’s clear: Novo’s playing a different hand in the GLP-1 war.” Novo Nordisk is far from the only pharmaceutical company looking to expand DTC/DTP drug sales to patients. In a recent earnings call, CEO of Roche Thomas Schinecker said that a direct-to-consumer model, “would be one of the easiest ways to impact pricing for the patient without destroying innovation.” Keep this fast-moving Rx-to-consumer space in mind as we delve further into the dynamics of drug pricing in America in tomorrow’s, 3rd, post in this series. I’ll address how the Trump Administration’s discussions for “Most Favored Nations” approach to drug pricing could re-shape the affordability and accessibility of medicines in America and in particular, for patients-as-consumers and the ultimate payors for prescription drugs.