The Patient Choice Era

In the next competitive era, drug manufacturers will need to prove value to patients

In the 1990s, the winning strategy for US biopharmaceuticals was: 1) get the drug approved by the FDA, and 2) drive awareness through successful marketing.

Let’s call this the “Marketing Era”.

By the mid-2000s we had entered a new competitive era, brought about by the rise of PBMs and expanded drug coverage through Medicare Part D.

Let’s call this the “Formulary Era”.

In the Formulary Era, FDA approval and successful marketing were still necessary but no longer sufficient. Winning strategies now included getting favorable payer coverage and keeping access hurdles low for patients. Preferred formulary positioning was a competitive edge since it meant easier access for patients.

We’ve recently entered a new era. Let’s call it the “Patient Choice Era”.

In the Patient Choice Era, favorable payer coverage is still necessary but no longer sufficient. The new winning strategy includes proving to patients that a drug is worth their money, time, and effort. That is because patients now have more skin in the game: branded drugs are harder to access,¹ out-of-pocket costs remain high,² and cash-pay channels are giving patients a way around health insurers for some drugs.³

In practice, winning strategies in the Patient Choice Era will look very different for cash-pay vs. high-cost specialty drugs.

For some drugs in cash-pay channels, like GLP-1s, patients can now bypass payers and PBMs altogether. I expect this flexibility to expand to other areas where patients see value but payers have resisted coverage, like migraine and hair loss. For these drugs, the challenge is to convince patients that a drug is worth their money

High-cost specialty drugs (e.g., oncology, rare disease) will remain too costly and complex for cash-pay channels. Patients will still rely on health insurance, but will need to invest time and effort (alongside their physicians) fighting for access. For these drugs, the challenge is to convince patients that a drug is worth fighting for.

In both channels, manufacturers need to convince patients their drug are worth it.

Once patients have real money, time, and effort on the line, whether a therapy feels “worth it” will depend on more than just the drug itself. Patients will increasingly judge the broader package around treatment, including the evidence, support, and financial terms that come with it. In the Patient Choice Era, manufacturers that build the strongest bundles around effective drugs will be in the best position to win.

1. For example, a recent IQVIA report estimated ~70% of new branded drug prescriptions in the US are initially rejected

2. For reference, US patients spent $98 billion out of pocket on drugs in 2024 (up 25% over 5 years)

3. In 2025, 1 million patients accessed Lilly treatments through LillyDirect (Eli Lilly’s direct-to-consumer platform)