Pharma's Bundle Strategy
Pharma's expanding moat: from molecules to bundles
“There are only two ways to make money in business: one is to bundle; the other is to unbundle.” Jim Barksdale, former CEO of Netscape
There has been a lot of interest this year in direct-to-consumer (DTC) platforms, digital services that connect patients with prescribers and drug fulfillment.1 LillyDirect (Eli Lilly) was one of the first DTC platforms announced in January 2024, and manufacturers like Novo Nordisk, Pfizer, and others have since followed suit.
Manufacturers are positioning these platforms as tools to reduce access barriers, increase patient choice, and ultimately improve patient health.
Within LillyDirect, for example, patients seeking care for obesity, migraine, and other conditions can connect with independent telehealth providers and get Lilly drugs shipped to their homes. Patients can also pay cash at discounted prices if they lack insurance coverage. From Lilly’s CEO:
A complex U.S. healthcare system adds to the burdens patients face when managing a chronic disease. With LillyDirect, our goal is to relieve some of those burdens by simplifying the patient experience to help improve outcomes
LillyDirect offers more choices in how and where people access healthcare, including a convenient home delivery option to fill Lilly medicines they have been prescribed
These DTC platforms represent a striking departure from the traditional pharma model of scientific research, clinical trials, and FDA approval. But if we look closer, we can see these DTC efforts as just one piece in a broader shift.
Twenty years ago, a winning combination in pharma was to have an FDA-approved drug with strong patents and marketing campaigns. Today, drugs face more competition, governments are putting pressure on prices, and vertically-integrated payers are making access and reimbursement more difficult.
Manufacturers are realizing that competitive advantage now depends on the ‘bundle’ surrounding each drug - the offerings, evidence, and commitments that create value beyond the molecule itself.
These bundles create value for different stakeholders - patients, payers, governments, and society - but all ultimately strengthen the manufacturer's competitive position.2
The Bundle Toolkit
Looking across the industry, I see five elements in particular that manufacturers are building into their bundles with respect to the US healthcare system.
These categories show us new ways that manufacturers are thinking about value - reducing uncertainty (treatment targeting, financial risk sharing, evidence and transparency), reducing friction (patient experience), and directing social benefit (geographic investment).
1. Treatment Targeting
Not every patient responds equally to treatment. Companion diagnostics, clinical algorithms, and AI-based predictions can lead to higher odds of treatment success. These offerings have been particularly prominent in oncology, where more treatments are being paired with biomarker-based diagnostics.
Providers are also critical players here, since tests and tools only add value if they’re embedded in routine care. Better targeting improves outcomes for treated patients and strengthens positioning with payers (value to patients and payers).
2. Patient Experience
Even the most effective therapy won’t create value if patients can’t access it. Patient support programs, nurse navigators, and DTC platforms are all designed to reduce friction in the care pathway, making it easier for patients to start and stay on therapy (value to patients). For some treatment areas, these offerings may also help win back direct relationships with patients and weaken the gatekeeper role of payers and PBMs.
The patient experience also depends on reliable drug availability. From GLP-1 shortages to gene and cell therapy constraints, manufacturers are investing heavily to make sure timely drug supply keeps up with demand.
3. Financial Risk Sharing
In addition to standard rebate-based contracts, some manufacturers are also offering innovative payment models (e.g., outcomes-based contracts, annuities, warranties) with rebate contingencies for payers if a patient doesn’t respond to therapy.
By sharing financial risk, these arrangements reduce uncertainty and provide greater assurance of treatment value (value to payers). However, logistical challenges around specifying outcomes, data collection, and policy barriers have led to relatively limited adoption of these models in the US.
4. Evidence and Transparency
Since "you can't value what you don't measure," manufacturers are investing heavily to generate new forms of real-world evidence.
Sophisticated technologies like patient wearables, digital companion apps, and ambient scribes are capturing richer and more continuous data - such as wearables that track Parkinson’s symptoms between visits and continuous glucose monitors that capture blood glucose in real time.
But generating evidence is only half the equation. Strategic decisions around data transparency - whether to share more granular data or real-time data feeds with payers or society at large - can build trust and accelerate coverage decisions (value to patients, payers, and society).
5. Geographic Investment
While not a traditional service that accompanies drugs, investment decisions around where to run clinical trials, build factories, or fund research are becoming increasingly important parts of the bundle strategy.
These investments effectively become part of the value proposition to governments - ‘we’ll bring jobs, skills, and tax revenues if you provide favorable pricing and access conditions’ (value to governments and society).
Just last week, several pharmaceutical companies cancelled UK investments, citing unfavorable conditions around drug pricing and access in the country. In the US, companies are pledging billions in new investment in response to anticipated tariffs on pharmaceuticals.3
These investment decisions are ”zero-sum,” as the same investment cannot be made in more than one place. Companies that master geography-as-strategy may protect pricing and access in key markets, while others may face hurdles.
The Takeaway
In the 20th century, patents and marketing campaigns defined pharma’s competitive moat. In the early 21st century, advantage went to companies that secured timely, favorable coverage - often through strong evidence packages and effective payer engagement.
Today, the bundle surrounding a drug is a critical part of this moat. The question is no longer “how valuable is our drug?” but “what bundle do we build around it?” Too few elements risk weak differentiation, but too many add cost and complexity.
The right mix will depend on the treatment area, company capabilities, and competitive context - rare disease therapies may focus more on innovative payment models and evidence generation; high-volume primary care drugs may focus more on reducing broad access barriers.
For market access and health economic teams, this will require a shift in thinking around value. Teams that quantify the value of the full bundle - not just the standalone molecule - will be better positioned to stay ahead of these shifts and build stronger cases for access and reimbursement.
Brian Reid has popularized the phrase ‘pharm-to-table’ with respect to these DTC platforms. His Cost Curve newsletter is a great read to keep up with new developments. But you probably already knew that!
Barksdale's framework suggests that companies can benefit from both bundling and unbundling. Today, we’ll focus on the bundles pharmaceutical manufacturers are building alongside their drugs. Unbundling - such as outsourcing specialty distribution and patient support to third parties - is equally interesting, but a story for another day!
Per the Wall Street Journal, drugmakers like GSK, Lilly, J&J, and AstraZeneca have pledged over $350B in US investments. Under a recent trade deal, pharmaceutical imports from the EU could face tariffs of up to 15%, giving companies added incentive to expand US manufacturing