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Emory Corporate Governance and Accountability Review

Abstract

Access to prescription pharmaceuticals has historically been controlled by a physician’s pen. As a result, pharmaceutical companies spend billions of dollars on advertising and promotion to mitigate this barrier: first and primarily, to physicians and other prescribers, and more recently, to the general public through direct-to-consumer advertising. The success of these promotional efforts can be seen in the greater prescribing of costly brand-name medicines, even in settings where lower-priced, comparably efficacious generic alternatives exist. Brand-name prescriptions now make up only 10% of all prescriptions written yet account for 88% of drug spending. Despite these substantial returns on investment, companies continue to seek opportunities to drive lucrative, brand-name spending. In 2024, Eli Lilly & Co. and Pfizer, Inc., introduced direct-to-consumer services LillyDirectTM and PfizerForAllTM, aimed at circumventing the traditional role of physician-as-gatekeeper.

LillyDirect and PfizerForAll engage in direct-to-consumer advertising, guiding interested consumers to confederate telehealth companies and profiting when those telehealth prescribers in turn write prescriptions for the referring manufacturers’ costly brand-name drugs. These relationships, which we call “pharmaceutical-telehealth confederacies,” threaten patient safety and may increase health care costs by driving the inappropriate prescribing of costly drugs over cheaper alternatives. Four U.S. senators inquired about the relationships between the two pharmaceutical companies and their telehealth groups to identify potential violations of the federal Anti-Kickback Statute (AKS). The U.S. Department of Health and Human Services Office of the Inspector General has also raised concerns regarding arrangements between physicians and telemedicine companies where providers are compensated for each prescription written. Likely by design, LillyDirect and PfizerForAll may avoid the reach of the AKS by conducting transactions outside federal insurance programs. Yet the idea that drug companies can promote, prescribe, and dispense medications directly to patients with few gatekeepers and limited regulatory oversight seems inherently problematic. This Article evaluates the nature of pharmaceutical-telehealth confederacies while offering solutions for reigning in their more egregious practices.  

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