Direct-to-Employer Model:
How Pharma One-Upped PBMs

On March 5, 2026, Eli Lilly launched a new platform called "Employer Connect", a Direct-to-Employer (DTE) platform designed to help employers provide access to obesity medications through a network of benefit administrators, pharmacies, and telehealth providers.

At first glance, the model appears to be a straightforward access solution. Employers gain the ability to offer high-demand GLP-1 medications with transparent pricing structures, all while avoiding the traditional payer system. But strategically, a significant shift may be happening.

For decades, PBMs have controlled the negotiating table in pharmaceutical markets. They controlled the formulary, the utilization rules, and most importantly, they controlled the data. Now, DTE marketplaces have the potential to shift the power dynamics from pharmacy benefit managers (PBMs) to pharmaceutical manufacturers.

A Quick History of the PBM Power Model

PBMs became powerful from one primary strategy: whoever controls the sponsor demand controls negotiations. They aggregated millions of patients across employers and insurers, then used that scale to negotiate rebates and formulary positioning from manufacturers.

The mechanics looked like this:

Manufacturers could invest billions of dollars to make a life-saving medication, but a single PBM decision could determine whether patients actually received the drug.

The Growth Problem Facing Pharma

The traditional payer channel has stopped behaving like a growth engine for certain categories. Obesity medications illustrate the problem clearly. Demand is exploding, but access is limited.

Complex Prior Authorization processes and Utilization Management requirements make it challenging for patients to start treatment. From a manufacturer perspective, this creates a structural constraint: if the payer channel does not expand access to patients, market growth stalls regardless of clinical effectiveness.

So, Pharma started exploring alternatives to expanding access and driving growth. First came Direct-to-Consumer/Patient (DTC/DTP) platforms. Now comes Direct-to-Employer (DTE).

The Direct-to-Employer Model Explained

In a DTE marketplace, the manufacturer creates a new payer and distribution ecosystem. With PBM involvement reduced or removed, employers can purchase access to specific therapies with transparent pricing and clinical criteria.

On paper, the model aims to solve several problems:

• Simplify drug pricing through transparency
• Expand coverage for high-cost therapies
• Foster competition on value of services
• Improve patient access without PBM gatekeeping

But strategically, the shift for Pharma centers on data and leverage.

The Strategic Significance: Data and Leverage

Ironically, the lack of growth in the traditional payer channel for GLP-1s, caused by PBMs' enforcement of access hurdles, may have given manufacturers some of the same negotiation leverage in the new DTE model that PBMs have historically wielded against them.

When manufacturers control a DTE marketplace, they gain access to utilization data, treatment adherence patterns, and employer demand signals; all of which PBMs have historically monopolized. This data advantage can reshape negotiation leverage across the entire pharmaceutical supply chain.

The Bottom Line

Direct-to-Employer drug marketplaces appear to be an access innovation. But strategically, they may represent something larger: a shift in negotiating leverage inside the pharmaceutical supply chain.

For decades, PBMs controlled the critical assets of demand aggregation, formulary access, and claims data. DTE models introduce the possibility that manufacturers may reclaim part of that strategic visibility.

While the promise of transparency is appealing, one remaining question is whether these platforms remain transparent purchasing channels, or evolve into a new version of the PBM playbook.