By John Amos, CEO, Vivus

With just the click of a button on your smartphone, you can order virtually anything and have it on your doorstep in one or two days. Customers now expect their healthcare experience to be similarly quick and easy and expect pharmacies to be able to offer the same type of frictionless customer service experience they’ve come to expect in all their e-commerce transactions. For pharma companies, meeting these new consumer expectations means rethinking the customer, clinician, and pharmacy experience with a new orientation to speed and simplicity.

For lifestyle medications not covered by traditional insurance or medications not fulfilled by traditional pharmacies, cash payments can help manufacturers offer a customer experience like e-commerce. In this model, cash pay or direct-to-patient pharmacies are a critical bridge between pharmaceutical manufacturers, clinicians, and their patients. However, in the era of post COVID-19 consumer trends, these pharmacies must be able to meet the escalating expectations of patients and providers alike and reliably offer instantaneous service, across all 50 states, thousands of times a day, without making a mistake.

The cash pay model offers several benefits to consumers for certain therapies because it eliminates the hassle of dealing with insurance, which is particularly useful for products that are not covered by insurance, or for products that insurance companies will only cover following prior authorizations and/or step therapy failures. In the case of our weight-loss drug Qsymia, cash pay is the quickest, easiest way for a patient to access the drug, and for some patients, cash pay can be cheaper than using insurance.

Rethinking Customer Experience With Cash Pay

Initially, you would think that the experience of ordering a cash pay pharmaceutical product like ours would be like the experience of ordering shoes on Zappos. But it’s not. We cannot and do not sell our products directly to patients. Clinicians prescribe our products to patients who they believe will benefit. Pharmacies receive prescriptions, manage insurance and payment, dispense the product to patients, and offer professional counseling on the product’s use. Online shopping sites don’t have to provide this level of customer support, nor do they have to contend with the same type of differing regulations across jurisdictions the way we do. With help from our pharmacy partner Medvantx, we’ve redesigned our fulfillment process to mirror the online shopping experience as closely as possible for clinicians and patients.

For clinicians, we wanted to ensure that the process of submitting a prescription is as easy as sending a prescription to the local retail pharmacy, minimize back and forth, and ensure that our pharmacy partner could fulfill prescriptions quickly and in all 50 states as well as Puerto Rico, Guam, and the U.S. Virgin Islands. Further, since our product requires careful patient management and titration on/off, we needed to ensure that our partner could reliably deliver medication to patients, ensuring a continuous supply across thousands of prescriptions day in and day out.

For patients, we not only needed to make sure that our partner could deliver medication in a timely manner, but also that they could manage the payment process with ease, security, and reliability. This includes ensuring that even mundane aspects of processing e-commerce transactions, like enabling customers to easily reset their passwords and offering a mobile-optimized website, are patient-friendly.

Further, the partner needs to be able to provide all the pharmacy services required by law in individual jurisdictions and offer trustworthy and confidential multi-lingual phone support and pharmacist consultation. And for companies selling products requiring a cold chain, they must also ensure that their pharmacy partner can support specific challenges associated with dispensing these medications such as consultation on pack-outs and transportation strategies.

Considerations Before Adopting Cash Pay Models

In addition to the patient benefits of cash pay fulfillment approaches, cash pay also can offer a mechanism to support an activity-based pricing model. Amid policymaker scrutiny on pharmaceutical pricing and supply chain inefficiencies, cash pay models give pharmaceutical manufacturers power to negotiate more favorable distribution terms, which in turn, enable value transfer to the patient via lower prices, which are critical in cash pay models.

Cash pay models are better suited to some types of products than others and companies need to carefully consider whether this model is appropriate for the patient population they serve and in conjunction with existing PBM contracts or payor contracts. Out-of-pocket costs for patients are a key consideration for a manufacturer when choosing to pursue a cash pay model, which can be preferred by patients who are uninsured, underinsured, or insured in a high deductible plan.

As consumer expectations and the policy landscape continue to change, pharmaceutical companies and the pharmacy sector must continue to evolve. Cash pay models, leveraging activity-based pricing can be a good path forward for some manufacturers and the patients they serve.

About The Author:

John Amos has served as Chief Executive Officer and a director of Vivus since 2018. Amos has held several leadership roles in the biopharma and broader healthcare space including leadership positions with Willow Biopharma Inc., ORIX Healthcare Capital LLC, BioVeda China Fund, Oncology Therapeutics Network (acquired by McKesson Corporation), Bristol Myers Squibb, and McKesson Corporation. He also served in the United States Air Force and the California Air National Guard in Tactical Fighter Operations. Mr. Amos has served on numerous corporate boards and as a member of the Scientific Advisory Board at MD Anderson Cancer Center Institute for Applied Cancer Science (IACS) and was a health policy advisor to Governor Jeb Bush’s 2016 Presidential Campaign. He studied Economics at the University of California, Davis and has a B.S. in General Business from the University of the State of New York.