Telehealth’s New Bedfellows

Peter Ax, J.D., MBA, was an experienced investment banker who decided he wanted to become an entrepreneur. “And the first thing I did was consolidate a chain of laundromats in the U.S.,” he says. “And then what I did is I bought an online pharmacy.”

That was in 2000. Back then, the term “online pharmacy” brought to mind aggressive, spammy advertising for erectile dysfunction drugs of dubious provenance. But Ax had bigger plans. “I bought the company, and then literally, within 24 hours, I was sitting in regulators’ offices explaining to them how I thought we could deliver healthcare online,” he says.

Peter Ax, J.D., MBA

Two years later, his company became the first in the U.S. to process a legal online prescription. But that was just the first of many regulatory hurdles between him and his goal. “Frankly, I never thought it would take, you know, 15, 20 years.”

Now Ax’s company, UpScriptHealth, has become what he sought to create. Its platform connects patients in all
50 states to clinicians and pharmacies. What makes UpScript unique, though, has less to do with its technology than its business model. The company contracts directly with device manufacturers and drugmakers, who send interested patients to UpScript’s platform. There, patients can speak with a physician and potentially get a prescription for the drug- or device-maker’s product. “We have streamlined the patient
experience,” Ax says.

Clinicians on the platform have received training about the relevant drug or device, as well as other therapeutic options in the market. If they choose to write a prescription, UpScript can fill it. “So, number one, you have a well-informed clinician,” Ax says. “Number two, we can then seamlessly order the device.”

For pharmaceutical and device companies, the system offers a faster way to convert interest into sales. Jim O’Connor, J.D., interim CEO and chief financial officer at Axena Health, said the platform is helping his company expand its footprint without expanding its overhead. Axena markets the Leva Pelvic Health System, a wand-shaped device equipped with motion sensors that, when paired with the company’s smartphone app, can be used for pelvic floor training in women with urinary incontinence. The market is massive: a 2022 study estimated that 78 million women in the U.S. experience symptoms of urinary incontinence. Yet Axena’s sales force for Leva has just seven sales representatives.

The company has tried marketing directly to consumers, using targeted ads that direct patients to an online form they can print, take to their doctors and ask for a prescription, but that’s “a lot of friction,” says Ax. Patients who visit Leva’s website can click a link and talk with an UpScript physician.

Congressional scrutiny

The seamlessness that Ax sees as a virtue has raised questions about whether drugmakers’ partnershipswith telehealth companies such as UpScriptHealth might involve violations of federal antikickback rules, which prohibit payment to induce patient referrals for services and goods — prescription drugs would fall into that category — covered by Medicare or Medicaid. In late October 2024, Sen. Dick Durbin of Illinois and three other Democratic senators sent a letter to Pfizer and Eli Lilly asking about their telehealth partnerships. UpScript is the telehealth service behind Pfizer’s PfizerforAll digital platform, and senators’ letter mentions UpScriptHealth several times. Durbin and his colleagues cite a 2022 fraud alert from the HHS Office of Inspector General about telehealth schemes to generate unnecessary
prescriptions.

“The nature of the PfizerForAll platform appears to reflect many aspects of the HHS OIG warning for potential fraud,” the letter says. ”Unsurprisingly, a patient coming straight from Pfizer’s website to a telehealth appointment with a prescriber chosen by Pfizer is overwhelmingly more likely to ask for Pfizer’s medication. Further, that prescriber may have an incentive to prescribe such medication, whether or not it is medically necessary or clinically appropriate.” The letter goes on to ask 13 questions about Pfizer’s dealings with UpScript and another telehealth vendor.

Ax said pushed back against the Durbin letter in an email to Managed Healthcare Executive: “UpScript clinicians are not incentivized in any way to prescribe or to limit the time they spend treating patients.” He also said that they are not incentivized to prescribe one specific medication over over and “spend whatever amount of time is necessary to diagnose and treat patients, which does not significantly differ from the time spent when clinicians meet patients in a face-to- face setting.”

In an interview before the Durbinletter, Ax said the company conducts quarterly quality control audits in which a peer reviewer analyzes the notes and prescribing decisions of a percentage of its physicians. Overprescribing is not an issue, he says, though sometimes clinicians are found to be taking insufficient notes. That’s a problem, he says, and one the company takes very seriously, because it needs to be able to justify all its prescriptions. “Certainly our standards will be much higher than what [they are] in the brick-and-mortar world, because we know we’re on the cutting edge,” he says. “We always have been so, and we can easily be a target.”

A growing market

The agreements with individual clients vary, says Ax, but his company can fill the prescription, handle insurance adjudication and offer training and follow-up support to patients. “In a sense, it’s this closed loop,” Ax says.

Typically, patients pay a fee for the UpScript consultation. The fees vary but are usually less than $50. If a prescription is written, the patient’s insurance is billed for the therapy.

O’Connor noted that his company, backed by venture capital, has to be very deliberate about its direct-to-consumer (DTC) marketing budget. “There’s certainly many stories of start-ups and digital health start-ups who have spent a lot of money on DTC campaigns, and not necessarily with a great ROI [return on investment] for their investors,” he says.

Smaller companies such as Axena Health can use UpScript’s platform to scale up their operations, but major pharmaceutical firms are also among its customers. When migraine patients visit AbbVie’s website for Ubrelvy (ubrogepant), a button in the top-right corner of the site offers the option to talk to a doctor. If patients click, they are taken to UpScript’s website. With Pfizer’s PfizerForAll digital platform, if patients opt for a telehealth consultation, they will find themselves talking to an UpScript physician. In a news release in late August 2024, Pfizer touted the platform as offering an “easier way to connect with a qualified healthcare professional the same day, find and book vaccines, receive tests and medications at home or via a preferred pharmacy.” The news release mentions vaccines for COVID-19, flu and the respiratory syncytial virus. It also mentions migraines. Pfizer is marketing Nurtec ODT (rimegepant), a migraine medication approved by the FDA that had
$275 million in U.S. sales last year.

Ax said UpScript is adding customers at a rapid rate. The company entered into seven agreements in 2022, more than doubled that number in 2023, and expects to enter intobetween 25 and 30 this year.

UpScript has a growing number of competitors. When Eli Lillylaunched its LillyDirect platform in January 2024, it partnered with three other telehealth providers: Cove, 9amHealth, and Form Health. Ax believes UpScript’s decades of experience will help it fend off the new start-ups, in part because the company has experience navigating state and federal regulations.Ax says innovation will be necessary to stay ahead of competitors. His sights are also set on another target: middlemen.

“What I would really like to see happen is pharma and/or device manufacturers team up directly with companies like UpScript and make the cash-pay model really work,” he says, with cash being a way to limit the role — and cost — of insurers and pharmacy benefit managers.