Biotech Values

[Mufaso]

LLY direct marketing efforts are directed squarely at unauthorized compounding copycats while they also protect their own margins. By going direct to consumer they are disenfranchising PBMs (who do not serve a useful purpose IMO) and also the local pharmacy (who does serve a very useful purpose IMO) at the same time. Typical PBM margins are around 5% while typical pharmacy margins are around 25% so a good chunk of "price to consumer reduction" comes from this.

This is a very smart way for LLY to protect innovator/manufacturer profits while decreasing drug prices to appease regulators (and eventually insurance companies). Tesla, Amazon and others have proven that you don't always need to use traditional channels to market to be successful in a big way. The reality is this is something more and more pharma companies will do for successful and widely prescribed expensive drugs.

Expect many more pharma companies both big and small to adopt this channel to market going forward. (e.g. - VKTX will need to do this to increase competitiveness/adoption for VK2735 simply because LLY is doing it for Zepbound)