Roche considering selling drugs directly to US patients, CEO says

Reuters
24 Jul
UPDATE 2-Roche considering selling drugs directly to US patients, CEO says

DTC model could lower medicine prices for US patients

Trump administration pressuring drugmakers to cut prices

Details on how DTC model would work remain sketchy

Adds context in paragraph 5, industry source in 6 and 10, background on Lilly and Novo in 7-8

By Bhanvi Satija and Maggie Fick

LONDON, July 24 (Reuters) - Roche ROG.S is considering selling its prescription medicines in the U.S. directly to consumers to lower costs for patients as part of talks with the U.S. government, which is pressuring drugmakers to cut prices, Roche's CEO said on Thursday.

A direct-to-consumer $(DTC.AU)$ model would work for all of the Swiss company's medicines, CEO Thomas Schinecker said on a call with reporters, without detailing how the scheme might work.

U.S. President Donald Trump issued an executive order in May directing drugmakers to lower medicine prices to align with what other countries pay.

Last week, Bristol Myers BMY.N and Pfizer PFE.N said they would begin selling their blockbuster blood thinner, Eliquis, directly to cash-paying U.S. patients at a discount.

Typically, U.S. drug prices are shaped by complex negotiations involving pharmacy benefit managers that act as middlemen between drugmakers and consumers. They negotiate volume discounts and fees with drugmakers on behalf of employers and health plans, create lists of drugs that are covered by insurance, and reimburse pharmacies for prescriptions. The system has often been criticised for inflating costs.

An industry source told Reuters on Wednesday that the most viable DTC candidates were small-molecule drugs dispensed at retail pharmacies - such as treatments for diabetes, cardiovascular conditions, or respiratory diseases like asthma - because they are simpler to distribute and price directly for patients compared to complex medicines, such as some cancer drugs, which often require special handling and injection.

Eli Lilly LLY.N and Novo Nordisk NOVOb.CO already offer their popular weight-loss drugs Zepbound and Wegovy directly to U.S. patients for rates below the drugs' list prices.

Lilly's chief financial officer, Lucas Montarce, said at an industry conference last month that the company had shared details of how it implemented its DTC model with the Trump administration.

Schinecker said a DTC model would help lower costs in the U.S. quickly by cutting out pharmacy benefit managers.

The model could appeal not only to the uninsured or under-insured, but also to insured patients comparing the cost of accessing drugs through insurers with cash prices, the industry source said. For example, if a patient was required to pay $20 to an insurer for a drug with a list price of $100, a DTC offer would need to beat that to be attractive.

Roche has also increased inventories to avoid potential disruptions from tariffs, Schinecker said. The company announced in April plans to invest $50 billion in the U.S. over the next five years.

(Reporting by Miranda Murray in Berlin, Maggie Fick in London and Bhanvi Satija in Bengaluru. Editing by Rachel More and Mark Potter)

((Miranda.Murray@thomsonreuters.com;))

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