Recently, pharmaceutical manufacturer Eli Lilly ventured into the direct-to-consumer (DTC) marketplace, launching “LillyDirect,” a consumer-focused website aimed at streamlining access to telemedicine prescribers and mail order delivery of Eli Lilly medications for obesity, migraines and diabetes. Eli Lilly’s website functions similarly to other DTC products by connecting patients with independent telehealth providers, who can prescribe any FDA-approved weight loss drug or other medications for diabetes and migraines. If the prescribed treatment is a product manufactured by Eli Lilly, a third-party online pharmacy contracted with Eli Lilly will deliver it directly to the patient. LillyDirect currently partners with EVERSANA® and Truepill® as pharmacy service providers to accept and fulfill drug orders, and has integrated with FORM, 9amHealth, and COVE to provide telemedicine services.
What makes this model so unique is that a major drug maker is now supporting a DTC experience, creating a pathway for patients to directly order prescription medication essentially from the manufacturer themselves. What’s more, the LillyDirect model highlights the exponentially increasing demand for semaglutide and tirzepatide weight loss and diabetes medications, and provides a solution not only for access to the medication, but also for access to providers who can prescribe it.
With any DTC model, however, compliance concerns exist. While telemedicine is a rapidly growing method of practicing medicine by providing health care services via video conference rather than requiring patients to travel for an in-person visit to an office or hospital, telemedicine does come with potential legal risks, making it imperative that services providers and prescribers alike maintain compliance with state and federal law, including professional board regulations.
Likewise, manufacturers such as Eli Lilly will need to navigate complex laws and regulations surrounding pharmacy hub arrangements. These include requirements regarding the practice of pharmacy, shared services regulations, and regulations to ensure the secure transmission of electronic prescriptions while safeguarding patient privacy. Staying well-informed of evolving privacy laws and implementing proactive measures is essential for pharmacies to mitigate legal risks associated with privacy, data protection, security, and HIPAA considerations in the healthcare landscape. In most cases, the direct access to patient health information (PHI) by drug manufacturers is restricted without explicit authorization from the individuals or covered entities holding the information. Healthcare providers are generally required to obtain patient authorization before sharing PHI with third parties, including drug manufacturers, for purposes not directly related to the provision of healthcare. Drug manufacturers collaborating with covered entities, such as healthcare providers or pharmacies, act as intermediaries for accessing PHI to ensure compliance with privacy laws. Each jurisdiction may have its own set of rules governing the privacy and security of health information.
In addition, relationships between drug manufacturers and pharmacies should be structured to avoid potential conflicts of interest and ensure transparency to mitigate associated legal risks such as compliance with anti-kickback laws and regulatory requirements. If Patient Assistant Programs are layered in, they must also comply with anti-kickback laws, ensuring that they avoid providing improper incentives or inducements that may lead to violations. Ensuring transparency and fair access to PAP benefits is also essential to mitigate legal risk. For example, kickback concerns may arise if the arrangement involves financial incentives or benefits based on the volume of prescriptions or patients referred to the pharmacies. Moreover, pharmacies participating in third-party claims with drug manufacturers need to navigate possible legal challenges related to payor manual compliance. Compliance with payor manuals is essential for pharmacies to receive reimbursement for services and medications provided.
Finally, drug manufacturers must ensure that potential off-label prescribing or dispensing does not evolve into off-label promotion. Any deviation into off-label promotion, where pharmacies actively market or endorse a medication for uses not approved by regulatory authorities, can lead to serious legal consequences, including violations of healthcare laws and regulations governing drug promotion. Examples of persuasive marketing techniques include the use of celebrity endorsements, premium offers, and gifts. An attempt to use persuasive marketing techniques is seen by the FDA as an attempt to mislead healthcare providers into prescribing or using a product for an unapproved use when they otherwise would not choose to do so.
How Frier Levitt Can Help
Frier Levitt has developed and reviewed an array of diverse business models that arrange for direct-to-consumer operations, incorporating unaffiliated participating pharmacy provides and the provision of telehealth. Each arrangement presents its own unique challenges and must be structured to ensure compliance with the various laws and regulations including, but not limited to, the Anti-Kickback Statute, Health Insurance Portability and Accountability Act (HIPAA), state insurance laws, state professional board regulations, and off-label marketing laws. Frier Levitt has a team of attorneys who understand the bounds of the industry standards surrounding these issues. If you have questions, contact us to speak to an attorney.
