Episode summary
Patients Are Taking the Driver's Seat in Healthcare
Thoughts on the Market (Morgan Stanley)
· · 9 min · Guests: Erin Wright, Terence Flynn
Summary
Patients are gaining more leverage across healthcare, and the guest argues that this is changing both how medicines are accessed and how care is purchased. The host cites Morgan Stanley survey data showing 34% of US consumers have taken a voluntary wellness lab test in the past 3 years and roughly 2/3 already own or plan to buy a wearable, evidence that consumer control is already showing up in daily behavior.
In biopharma, the guest says the old model left patients at the end of the value chain, but a parallel access infrastructure is now emerging. That model includes digital telehealth prescribing and non-traditional cash-pay fulfillment, especially for self-administered drugs where friction is high and insurance coverage is limited. The guest points to obesity as the clearest proof point, and says manufacturers are already selling over 25 branded drugs directly to patients at cash prices.
The guest estimates roughly a $26 billion peak US direct-to-consumer opportunity, or about 3% of total branded pharmaceutical spend, with about half tied to obesity and GLP-1 medicines. In healthcare services, the host argues consumerism is also reshaping insurers, health systems, and pharmacies through lifestyle savings accounts, digital front doors, and more transparent access. Survey data showed 25% of consumers paid entirely out of pocket for at least one healthcare service in the past year, led by behavioral and mental health care, suggesting patients are willing to spend for access and convenience.
Key takeaways
- The guest says direct-to-consumer drug access works best for self-administered therapies with remote diagnosis, lower price points, and few FDA prescribing restrictions.
- The guest estimates a roughly $26 billion peak US opportunity for direct-to-consumer branded drugs, with about half driven by obesity and GLP-1 medicines.
- The host says 25% of consumers paid entirely out of pocket for at least one healthcare service in the past year, with behavioral and mental health services the most common category.
- The guest argues that GLP-1s proved the model because only about 50% of US employer plans cover obesity medicines, leaving a large coverage gap.
- The host says diversified and vertically integrated managed care companies are best positioned to benefit because they have the most touch points with consumers and patients.
Notable quotes
“One of the biggest shifts we're seeing across the industry is patients gaining more choice, transparency, and control over how they access care and medicine”
“It's no longer simply about more consumer advertising or another cash pay discount. There's a parallel access infrastructure that's building here”
“manufacturers are actually already selling over 25 branded drugs directly to patients at cash prices”
“25% of consumers report paying entirely out of pocket for at least one healthcare service over the past year”
How the episode opens
Welcome to Thoughts on the Market. I'm Aaron Wright, US healthcare services analyst at Morgan Stanley. — And I'm Terren Flynn, Morgan Stanley's US Bioarma Analyst.
Today, how the consumer is moving into the driver's seat across healthcare. It's Monday, September 14th at 7 a.m. We're recording in New York City where Morgan Stanley's 24th annual healthcare conference is happening this week.
One of the biggest shifts we're seeing across the industry is patients gaining more choice, transparency, and control over how they access care and medicine. You can already see it in everyday behavior. In our Alpha Wise survey earlier this year, 34% of US consumers said that they've chosen to take a voluntary wellness lab test in the past 3 years.
And roughly 2/3 already own a wearable or plan to buy one. And now we're seeing the same trend reshaping how people buy medicine and choose care. So Terrence, let's start with biioarma.
For years, direct to consumer pharma meant advertising and nudging people to ask your doctor about what particular treatment is best for them. What's different this time around? And what's different in this next wave of direct access?
Yeah, absolutely. Thanks, Aaron. So for most of the industry's history, the patient sat at the end of the value chain and had really limited control over the product, the price or the route through which the drug was obtained.
Manufacturers marketed to doctors and consumers, but the transaction was itself intermediated. So we think that's starting to change here. It's no longer simply about more consumer advertising or another cash pay discount.
There's a parallel access infrastructure that's building here where the patient can increasingly start the initiation of the treatment journey themselves. Obtain a prescription often digitally through a teleaalth provider and then fill this prescription through other non-traditional channels.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- healthcare business models
- patient empowerment
- access to care
- prescription purchasing
- emerging opportunities
Watch the episode
Watch “Patients Are Taking the Driver's Seat in Healthcare” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from Thoughts on the Market (Morgan Stanley)
Thoughts on the Market (Morgan Stanley), this episode and its artwork belong to Morgan Stanley. Octagon is not affiliated with the show; this page is an independent summary.
