Behind the Numbers: Digital Health Trends for 2025—DTC Drugs and How Rising Health Costs Are Changing Consumer Behavior | Jan 27, 2025
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Hey gang, it's Monday, January 27th. Rajiv, Dane and listeners, welcome to Behind the Numbers, an eMarketer video podcast. I'm Marcus, and today we'll be discussing why DTC healthcare is becoming more popular and what folks are doing about the continuing rising costs of healthcare. Today, I'm joined by two senior digital health analysts. One of them is based in New Jersey. It's, of course, Rajiv Leventhal. Hey, Marcus. Thanks for having me. Happy to be here.

And the other senior analyst is based down in VA. It's Dane Finley. Hey, Marcus. Great to see you. Excited to be here today and looking forward to jumping right in.

Why does everyone look so good today? I went black t-shirt. Yikes. This was a bad choice. Leveled up. But this is where we are. Today's fact. People are increasingly more likely to listen to old songs. So something that conventional wisdom might have already told you, but old songs defined here is released over a year and a half ago and now represent songs

70% of the US music market according to music analytics firm MRC Data. So 70% of the music we listen to is old music. That's up from 65% in 2020.

which is a pretty sizable jump. There was a new essay by jazz critic and music historian Ted Goya, who was noting that the 200 most popular tracks now account for less than 5% of total streams. It was twice that rate just three years ago.

a message to the music industry i think uh step your game up game up for the for new songs yeah i know you guys um it's just too easy to to listen to the classics isn't it

I'm also an old person, so I don't know. Yeah, I wonder if that study looked at how about songs 10 years and older, 20 years and older. Oh, yeah. I love 90s rock. There you are. That's a great question, what that would have looked like if you split it out. He was arguing in the piece that the steady decline in viewership of the Grammy Awards has been an arbiter of new music's impending doom, saying that...

that in the last 12 years, the Grammy Awards viewership has fallen from the high of 39 million to 17 last year. So they think that's got something to do with it. However, it's not just old songs. In the article, people prefer reruns of old songs, but also old movies, it seems. He was saying that in 2024, that last year, nine of the top 10 highest grossing movies were sequels. One exception, which was...

Wicked. But that is an adaptation of a 21 year old Broadway musical, which was an adaptation of a 29 year old novel that was a prequel of an 85 year old movie that was itself an adaptation of a 124 year old novel. We're like old things, it seems. Anyway, today's real topic, digital health trends for 2025.

Thank you.

This is the Great Behind the Numbers Takeoff. Digital health trends and predictions for 2025. It's Great British Bake Off style for today's episode, in which our takers, or bakers, will be cooking up one trend each for you. Three rounds. Signature take, round one. The how it will technically play out challenge, round two. And for round three, the show-stopping argument. Let's meet the contestants' predictions in round one, which is signature take. We're going to start with Rajiv.

In this round, our chefs will have one minute to explain the premise of their trend. Rajiv, what will you be cooking up for us today? All right. So the trend on baking is that more companies in healthcare and pharma will move into the direct-to-consumer market. So quickly for some context, healthcare and pharma companies traditionally...

haven't had direct relationships with consumers where they sell a medical product or a healthcare service to them without sort of some middleman involvement, whether that's a health insurer or pharmacy benefit manager. These middlemen have a lot of control over the cost of medications and treatments and services and how easy they are to access.

So that's starting to change because you have drug makers and medical device companies and healthcare providers, telehealth players, and more and more are looking to reach consumers with their products and services while cutting out some of these middlemen that in the report I said they bottleneck access to products and services. So it's just a way to more directly reach patients while potentially generating revenue through an alternative sales channel.

Could you give us an example of one of these healthcare pharma brands selling prescription drugs, treatments, medical services directly to folks? Sure. I think the trend really took off last year when two of the world's biggest drug manufacturers, Eli Lilly and Pfizer, rolled out direct-to-consumer websites. And essentially on these websites, you can go on and...

And this doesn't apply to all of the company medication, but some of them. So you can go on and click a button that says, I want to talk to a telehealth provider that's affiliated with the pharmaceutical company. You get an appointment with the telehealth provider within minutes or hours of

And, uh, you know, let's just say you're, you're interested, you have a migrant and you're interested in a specific prescription drug by one of these companies to help telehealth provider, assuming they deem you eligible can prescribe this to you. They can ship it, uh,

And then the company, the pharmaceutical company will ship it to your home within a day or two. And you don't have to leave your house to do anything. You can kind of do all of this just straight through the pharmaceutical company service. And it doesn't just apply to prescription medications. You can buy over-the-counter products. You can order lab tests.

things like that. You can schedule an appointment for a vaccine, which of course are developed by pharmaceutical companies. So again, it's just an easier way to get your products, your services, your offerings in front of more people without some of the friction points that traditionally exist in healthcare. Okay.

So you still need a prescription and you're still, in a lot of instances, using insurance. In some cases. We can get into more examples, but there are certain companies that used to roll out products or treatments that were prescription only, but now they're moving to the over-the-counter market, which is direct to consumers. So one quick example before we can move on, Dexcom. They're a medical device company, right? They sell continuous glucose monitors, which track

the blood sugar of diabetic patients in real time, really effective at making sure you're able to track your blood sugar levels without needing to constantly go to the doctor. That's what this technology enables. And while that still exists, Dexcom recently rolled out an over-the-counter product

And it says, and you know, part of that is you don't need a prescription for this and it doesn't apply to just diabetics. You can be just a regular consumer who's interested in tracking their blood sugar. Uh, you know, we, we see lots of data that more people are, um,

you know, interested in health and wellness and using technology to monitor their health in real time. So again, it's, it's another way to, to reach more consumers, not just the diabetic patient population, but more consumers who are interested in tracking their health and wellness and making it easier for them to get it right. You don't now need a prescription for continuous glucose monitor when historically you have. Yeah. Yeah.

Dane, let's move to your trend in round one. Which prediction are you cooking up for us today?

Yeah, absolutely. Today I'll be cooking or baking up the following trend, and I've got some predictions to unpack there. But really this notion that the cost of health care, which we know is already high in the U.S. and unfortunately is becoming ever higher, is going to drive more consumers to really become price conscious. And we define price consciousness or being price conscious as really shopping around more.

So Rajiv kind of alluded to a few of these notions, things like convenience costs. But we already know currently in the present day from some of our e-marketer survey data that consumers do shop around for the best deal. That can be anything from medication prices, insurance plan prices, prices for medical services.

And really seeing quite a bit of that amongst younger generations, younger cohorts, folks who are Gen Zers or millennials being far more likely to compare some of those prices for medications, medical services. And a big part of this is cost shifting is really going to consumers, going to patients.

We have some data for this year that in 2025, the health care costs are supposed to rise by another 8%, which, you know, for the average consumer already kind of getting battered. Yeah. With health care costs and then some of the other costs, whether there's inflationary pressures, we know a lot of folks have had to deal with that. So, yeah.

unfortunately doesn't look like this cost shifting is going anywhere anytime soon. And because of that, we also have some data. Consumers, and Rajiv alluded to this, they're interested in their health. They're interested in improving their wellness and they're committed to doing that. But really we're getting to a point where I think something's got to give. People are cash strapped. Prices are going up. They still prioritize their health and wellness. So

That's really kind of the crux of that trend or prediction there. This data that you're citing is really interesting. So it's from our US Digital Health website.

uh, survey and it basically showing, um, uh, as, um, Dan was mentioning, um, that, uh, comparing medication and medical service prices is a common practice, um, with close to half of, of folks doing it. Um, and by generation, you've got, you know, millennials and Gen Z folks doing it, doing it more so. However, Reggie, I want to come to you first.

for this for a second because I also read this as over I mean half do I also read this as half don't

So, you know, half of Americans don't compare prices for medication and insurance plans. And in America, healthcare for most people is a thing that you buy, whether you get it through your employer, which over half of people do, or get it from somewhere else and buy it on an exchange or something. For a lot of people, it's something you buy. It would be crazy if they're

if there was a stat saying that over half of Americans don't compare food prices. So are you not surprised this isn't higher? Yeah. And you hit on a key point. If we buy it, we're in the market for a new TV. We're comparing the price and we're making our decision probably based on price in addition to other factors like quality, customer reviews, et cetera. In healthcare, it's never really been like that. Our decisions, as you touched on, are

largely influenced by what our insurance covers, what our doctor tells us, what our pharmacy benefit manager, which works behind the scenes. Yeah, what our company offers.

Yeah, exactly. And if you get your insurance to your employer, which almost two-thirds of Americans do, Dane touched on this in his opening segment, but insurers and self-insured employers are covering less medical services and products than they used to. So what that means is that patients are on the hook for it. And if patients are on the hook for a

you know, instead of a really cheap copay for like a prescription drug, I have now have a less generous health plan and I have to now either pay more out of pocket for this prescription drug or look for another prescription drug that's like similar for the condition that I have. I'm going to be more likely to kind of look online and compare

Prices compare the quality or the effectiveness of certain drugs or treatments or services. So, yeah, you know, going back to your question, 50 percent do, 50 percent don't. I think it's interesting even that 50 percent do, because most people for for the history of time in the US have not really had much control over their health.

healthcare costs and healthcare decision, which is crazy. Like, how are you not in control of your healthcare decision? Well, you really haven't been. It's usually the insurance company, the doctor, you know, other kind of authorities that are more in control than you, the patient. But as patients are now on the hook for more of the costs, they're more likely to, you know, kind of do these comparison shopping, things like that. You, the patient, and you, the customer too. Yeah.

Because you are both in a for-profit healthcare system. Let's move to round two, gents, the how it would technically play out challenge. Our chefs will explain in more detail how they expect the trend to manifest. We'll go back to Rajiv to start this one. DTC becoming a more viable distribution channel. What does this look like throughout the year?

So I think it will be ripe with challenges, but I don't think that the push will slow down. And let me explain why. There is for some of these companies that are moving into direct to consumer, the process by which you're doing so is being scrutinized by consumers.

Not just only, you know, industry companies or regulators, but the congressional members. There was a big development last year where some members of Congress were looking at pharmaceutical companies. I mentioned Eli Lohan Pfizer that have these direct to consumer offerings.

And it's essentially like an extension of direct-to-consumer drug advertising, which is only allowed in the U.S. and New Zealand, you know, complete, you know, TV drug ads and drug ads through other media.

media channels. So imagine like you're on Eli Willey's website or Pfizer's website, and you click a button that says talk to a doctor who can prescribe one of the company's medications. Well, I don't think it takes a genius to figure out that's a little bit of a conflict of interest, right? Like, isn't the doctor supposed to do what's best for the patient? But if they're affiliated with the pharmaceutical company, are they just going to prescribe the pharmaceutical company's

whether like determining if the patient is truly eligible and truly needs this medication. Like you can imagine some kind of dangerous consequences from this, right? Like you're, uh, you know, kind of connecting the prescriber of the, of the drug who's, you know, obviously morally and ethically obliged to do what's best for the patient, but also the, the company that's, you know, trying to make more money when more of their drugs are in, in patient's hands. So it's these, these members of Congress kind of, uh,

released this entire, basically they sent the pharmaceutical companies like a bunch of questions. They're saying, we're really concerned about the conflict of interest here. You're advertising these drugs directly to consumers. You're affiliated with providers who you want them to prescribe your products to consumers. What's going on here? Can you tell us about like the behind the scenes incentives and contractual agreements you have with doctors? Yeah.

And of course the pharmaceutical companies are like, no, the providers, you know, we don't pay them on like a per prescription basis. They're only, uh,

able to do, or they are not like affiliated with us in sort of like this close way, but they're actually instructed to do only what's best for the patient. They will only prescribe my drugs if they deem that that's what's best for the patient. But you still understand that like there are, you know, legitimate concerns around some of those agreements between drug makers and doctors. So that's a big thing to watch, I think, for the year ahead.

However, I don't think there's enough evidence, I would say, I guess, for this movement to slow down. Big Pharma is dealing with some pretty significant headwinds. The Inflation Reduction Act, if it continues under the Trump administration, is going to basically, in simple terms, slow.

lower profits for some pharmaceutical companies' drugs, because instead of just charging whatever they want now for the first time for Medicare patients, the government will actually have a say in how much these drugs cost, which is, I think, a big positive. But pharmaceutical companies, as you can imagine, are not in love with this new law. So I think that despite the scrutiny, there's enough motivation on the part of

healthcare and pharmaceutical companies. I know we're focusing a lot on drug makers, but there's a lot of motivation to get their products and services into more patients' hands. And a key way of doing that is using this direct-to-consumer channel. Yeah. And Rajiv, I think you made a great point. It kind of raises that professionally or ethics kind of gray area with

it kind of feels like maybe with some of the platforms or things out there, is it that the, to me as a consumer and kind of seeing it, taking a step back, it feels like maybe patients or consumers have, or have this illusion of, of kind of more power now where, you know, I was, I was on the subway when I was up in New York visiting not long ago. And I

I feel like some of the marketing or advertising materials make it like, Oh, you want a GLP one, you can kind of call us today. And, and it almost kind of comes off as that's something we can make happen. So it does kind of, I,

I feel like presents some kind of a professional, almost ethical gray area a little bit where obviously there's some regular regulator and public scrutiny on it, but just thinking of where we kind of go with more of a direct to consumer, um, maybe healthcare, uh, not model as a healthcare system, but for some of these companies. And is that something we kind of foresee happening more and more where the consumer does have more say or, or even more power, uh,

in some of these decisions. Yeah, it seems crazy that like a consumer is going to tell the doctor, hey, I saw this advertisement for a medication. Can you prescribe it for me? And look, to be fair, the doctor still is the one making a diagnosis, but it's starting to shift a little bit from like this

patriarch relationship where the doctor is 100% of the control to a little bit more of like a mix where there is some, you know, sort of decision making happening on both sides. And the weight loss drugs are a great example. I probably should have brought it up earlier because look, this is the biggest trend in terms of like prescription drug trend we've seen in a generation, right? So

40 to 50%, whatever number you want to use of the, of the U S is considered obese. Right. But despite the, despite the prescribing of these drugs becoming so much more rampant and frequent, really like by the week, by the month, a lot of insurers are stepping in and like, we actually don't see this as medically necessary and we're not going to pay for it. So what that does is it's created this sort of cottage industry, separate market of, of

direct to consumer telehealth companies that are selling the weight loss drugs directly to patients while bypassing insurance. So many people are struggling to get their hands on the drugs because they're so expensive about insurance. And then some of these other companies are like, oh, actually, forget about insurance.

Sign up for a membership with our company and we'll prescribe these drugs to you at a lower cost. And look, it's again, you can kind of go back to the ethics of this. Does every patient who receives a drug from one of these direct to consumer companies need it? That's a very important and critical question going forward. Yeah. Just really quickly, you mentioned the share of Americans who are obese, 42%. You said 40 to 50, I guess, depends on who you're looking at. National Institute of Health

42% of people in America are obese. But even amongst that 42%, some health plans, lots of health plans we're seeing are like, well, before we prescribe you this drug where we're paying $1,000 a month for it, right? For certain drugs like Ozempic, Wigavi, what have you.

We want you to try what they call step therapy. We want you to try making lifestyle modifications. We want you to try a lower cost medication first. We want you to show us that you put an effort into diets and exercise before we put you on this medication. And I think they have good health insurance companies.

for good reason, get a lot of criticism. But in this case, I understand what they're thinking. The default shouldn't be prescribing you this $1,000 a month medication until we try to see some other actions taken first. But then, like I said, you have this cottage industry where companies are like, screw the insurance who denies you. We'll just sell it directly to you at a lower cost. Yeah.

And it's a lot of folks as well who have subscribed to a company offering prescription medication. Yeah, you had it researched in your report from, again, from our US Digital Health Survey. 42% of millennials, 35% of Gen Z people, almost all who could still be on their parents' health insurance if their parents have some. So it's a lot of folks. Dan, let's turn to your trend for round two. So cost-based.

It's going up a lot. What are you looking at in 2025 as milestones, things to watch for with regards to this prediction?

Absolutely. I think certainly I'll start with some of the stats, some of the things we've seen. You know, there's been more of a push. And I know a lot of employers offer the high deductible health plans where that was really meant as a way to, you know, introducing those to reduce spending. But they do require upfront spending on medical care before plan payments will kick in.

Unfortunately, what we're seeing is those average deductibles for employees that have those types of plans, this is from Trillium Health.

their deductibles have increased by over 50% since 2007. So even though this was something that was really introduced as a means to try to bring things down, again, seeing more of those deductibles go up, more of that cost shifting to employees or consumers. And then we had some data we saw, external data this year, 85% of employers really believe healthcare costs

our rising healthcare costs will result in further cost shifting to employees. So what I expect to see is really more of that and kind of what I think the report works well, kind of hand in hand together, really more consumers shopping around. If it's going through more of those traditional avenues for a brand name, GLP-1 might be more expensive. I'd really like to keep my eyes on some of these subscription figures. Are consumers going to say, hey,

I can bypass the doctor. And this is another thought I had, Rajiv. We know trust in doctors is starting to decline. It has, or not starting to decline, it has been declining and it's more so doing that. If we see some of that, maybe misinformation, distrust kind of push them more to those avenues of,

I expect to see more as well. I think some behaviors maybe people can take if it's more expensive, say, to purchase the prescription. Are we going to see more folks saying, hey, I want to switch over to some of these maybe behaviors Rajiv alluded to, maybe dieting more?

maybe smoking cessation. Maybe it's something where I'm really going to try to make an investment in healthier foods or cutting out sugary products. We know if he's confirmed RFK Jr., that's a big part of the Maha movement is trying to remove some of those things and introduce healthier living. And I expect to see, I would want to look at those sales figures too, over-the-counter supplements, wearable devices, whether it's things like Apple watches, really trying to

take more of control of their health, get some more of that information from these wearables, the technology we do have on hand. And I expect to see too kind of a push where more folks are

I think kind of the classic example was during the pandemic, the at-home Abbott test. Expect to see more folks. You have the ability to do blood tests at home now, some of those different things. Expecting to see folks say, hey, I want to take more of my ownership over my health in a do-it-yourself way, in a more convenient and less expensive way. And those are a lot of the behaviors I see that I expect to see shift throughout this year. I think what's really interesting is that pretty much everything Dane touched on was like,

okay, what's driving this? And it's just this world of online healthcare and a greater demand for convenience, just like you see in other aspects of life. Like why should healthcare be so frustrating in terms of being able to like access certain products or services? It shouldn't have to be that way. And I think people are kind of getting fed up with the status quo. Like

I've got to wait a couple of weeks to see a doctor and then they may or may not prescribe this medication. And then maybe I can afford it, but maybe I can't. Depends what the health insurer gets until the health insurer decides maybe the pharmacy has it in stock, but increasingly received medications are not in stock. So it's like, you know, you could see why people are attracted and intrigued by the possibility of

conducting more of this healthcare activity online and companies are meeting them there and being able to give them really what they want without these friction points that have traditionally existed. And in a very quick amount of time, like Amazon Pharmacy promises to get the medications that they have to your house in a day, sometimes in hours. Walmart Pharmacy recently rolled out like a similar type of a service. And it's like,

you know i mean i i just dealt with a situation where cvs like couldn't have the medication that the doctor prescribed for me they said maybe a week maybe two weeks check back you call them and no one picks up and it's just like you know people are not happy with this experience and um if you can you know use online channels to improve that experience why the heck not yeah um

Yeah, a lot of times behavior is influenced by innovations. A new platform comes along. There's a new way of doing things. There's been some kind of development. Here, it seems a lot of this is born out of frustration and people are kind of turning their back on the medical industry because they're kind of annoyed with it and they don't want to have to deal with it aside from when they actually

absolutely have to. So it's an interesting driver of trends here. I don't think we need round three gents to be honest, because I'm going to crown both of you star bakers for today. You started off making your own dishes and ended up baking the same little treat.

which I think makes a lot of sense because there's a ton of overlap there. And you'll see if, yeah, even in more detail, if you want to go and check out the other, these two and other digital health predictions, pro subscribers can head to eMarketer.com and search for health trends to watch in 2025. Link is in the show notes. But thank you, gents, so much for being here and talking me through the DC movement and costs rising even higher than they already are. It's fascinating stuff. Thank you first to Rajiv.

Yeah, thanks, Marcus. I'm happy to come on some point later this year and see what these latest developments in this area is. It's pretty exciting. Yes, please. Looking forward to it. Thank you, of course, to Dane as well.

Yeah, thank you so much, Marcus. Thank you, Rajiv. Thank you for having us today. This was a blast and I would love the opportunity to join again sometime soon. Yeah, looking forward to having you both back on to monitor these trends and others in digital health. Thank you, of course, to the whole editing crew, Victoria, John, Lance and Danny, Stuart who runs the team, and Sophie who does our social media. Thanks to everyone for listening in. Tune in Wednesday to hear our first retailer rankings episode.

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