The Battle Among Channels for Marketing Pharmaceuticals: UpScript, Pharmacy Benefit Managers, and Direct-to-Consumer Sales

Can an online, direct-to-consumer pharmacy both improve the quality and speed of care for patients who need branded drugs and stabilize profits for pharmaceutical manufacturers? UpScript, after years spent achieving legal and regulatory compliance and simultaneous technological innovation has developed a direct-to-consumer (DTC) channel that could upend the standard model of pharmaceutical insurance and pharmacy benefit manager channels that dominate the industry. But UpScript’s reliance on self-investment constrains it from access to the capital it now needs to grow and remain at the forefront of its ability to provide pharma with this sales channel. With whom should UpScript invest to maintain growth and market leadership? And as it grows, how will UpScript be challenged by the deeply entrenched pharmacy benefit managers that currently cover most American lives? And how does UpScript stay ahead of the other online pharmacies or telehealth businesses offering a DTC sales channel, mostly for lifestyle generic drugs?

This case is suitable both as a general business case for undergraduate and MBA students of any level, focused on strategy, entrepreneurship, DTC pharmaceutical strategies, the pharmaceutical sector, regulation of pharmaceutical marketing and advertising, pharmaceutical benefit managers, and the healthcare industry.