New regulations and increasing retailization are changing the healthcare marketplace. The Inflation Reduction Act compelled organizations to pioneer new methods of maintaining revenue in the face of capped drug prices. In response to these evolving standards, pharmacy firms have embraced direct-to-consumer (D2C) initiatives as a potential remedy, leaning into the enhanced digital experience it offers consumers. However, to engage the next generation of consumers, these organizations should rethink more than just their sales strategy. A marketing approach that amplifies social media presence, particularly for Gen Z, will provide pharmacy firms a powerful platform to advertise their D2C offerings, allowing them to reach young consumers in a space essential to shaping their healthcare preferences.
Direct-to-Consumer Takes the Lead
Standard retailers (e.g., Glossier, Warby Parker, Mejuri) leverage D2C models to bypass middlemen, moving product directly from the manufacturer to the consumer. Pharmacies, on the other hand, act on two fronts to simplify their sales lines. On the supplier front, retailers cut out intermediate pharmacy benefit managers (e.g., Express Scripts, Prime Therapeutics) to transport medications from wholesalers to consumers. On the consumer front, D2C pharmacies promote telehealth options, encouraging individuals to obtain prescriptions through easily accessible virtual appointment. This convenience cannot be overstated, especially for younger consumers.
Findings from Corporate Insight’s 2023 Pharmacy Consumer Survey Analysis confirms this. Millennials and Generation Z respondents displayed the highest rate of usage of virtual sessions with healthcare professionals on pharmacy customer websites and mobile apps relative to all other demographic groups. Further, additional data from our 2024 Health Plan Consumer Survey Analysis shows that these age groups rank digital capabilities, such as video chatting and instant messaging with healthcare professionals, higher than any other age group.
For pharmacies, this model provides an efficient way to manage pricing and operations, enabling them to maintain control over their products even as federal legislation takes on a more influential role in their sales. Organizations such as Ro, Hims & Hers and GoodRx have built their name upon these services and have seen increasing publicity for their innovative care models. Other notable firms, such as Eli Lilly and Pfizer, are following suit, with both launching D2C services this year.
Where Consumer Preferences Are Made
The rising popularity of the D2C model represents a significant progression from provider-centric care and towards patient-focused care, enabling expedited access to medications while enhancing convenience. Pharmacies can deepen their role in this movement by actively engaging with the individuals most likely to consume commercialized healthcare: Generation Z. Our recent Gen Z and Social Media study shows how social media plays a crucial role in this demographic’s healthcare experiences, particularly regarding health and wellness products.
CI’s survey revealed all Gen Z respondents use social media as a research platform for health and wellness conditions, with 42% of 18- to 21-year-olds and 38% of 22- to 26-year-olds initiating their searches on a social media platform rather than on a search engine or with a licensed medical professional. A December 2023 eMarketer report provides similar metrics, indicating that 28.8% of Gen Z respondents begin their online research for medical information on social media, the largest portion of any generation. Pharmacies intent on promoting D2C engagement must capitalize on the presence of younger generations on social media, as these platforms are a fundamental step in their care journeys.
Exhibit #1 | Gen Z cites conducting research via social media platforms as the top method for obtaining health information
Which of the following methods of obtaining information about your health, wellness and/or medical conditions do you turn to first?
Strategic product placement through content creators can also offer a means to boost engagement. 34% of Gen Z respondents reported purchasing or signing up for a health and wellness product, service or treatment after seeing a content creator promote it, with the most common items purchased falling into the categories of vitamins, minerals or supplement and skin and hair care products. Partnering with creators to advertise D2C wellness products and highlight the ease of their care journey could allow pharmacies to educate social media users unfamiliar with this new consumer-centric approach. Findings also showed while many individuals expressed a preference for content from medically licensed or board-certified creators, it was not essential. Personal testimonies also held significant influence, as survey participants valued hearing from individuals with similar experiences.
Exhibit #2 | Gen Z cites purchasing health and wellness products, services and/or treatments after seeing content creators promote it
What type(s) of health and wellness product, service or treatment did you purchase or seek out after seeing a content creator promote it?
A New Era for Pharmacies
Healthcare will inevitably develop alongside new technologies and research, but generational preferences must also be taken into consideration. Pharmacy firms must adapt their marketing strategies to the emerging tendencies of the younger consumers, which increasingly requires a noteworthy social media presence for Gen Z.
For more insights into digital innovation in the healthcare space, check out our research services in four areas: Health Plan, Medicare, Health System and Pharmacy. Don’t forget to visit our Insights section for more industry trends and best practices across the healthcare industry.
Christal Oji
Christal Oji is an analyst on Corporate Insight's healthcare research team.