- Entrepreneur Mark Cuban has launched a new online pharmacy that offers more than 100 generic medications.
- Cuban’s Cost Plus Drug Company offers the products at what company officials say is a fraction of costs that consumers currently pay.
- The online pharmacy does not accept insurance, so it’s a cash-payment venture.
- A consumer advocate points out, however, that the new online pharmacy so far has no limited options and doesn’t offer brand name drugs.
Mark Cuban is feeling disruptive. Again.
This time, he’s got his sights set on the cost of prescription drugs.
Cuban, the billionaire investor, owner of the NBA’s Dallas Mavericks, and panelist on the television show “Shark Tank,” has launched an online pharmacy for generic medications.
The Mark Cuban Cost Plus Drug Company will give consumers substantial discounts on various medicines, according to the company’s website.
“Not everyone sets the goal of being the lowest cost producer and provider,” Cuban told Axios.
“My goal,” Cuban added, “is to make a profit while maximizing impact.”
Cuban says Cost Plus Drug, which will compete with such pharmacy giants as Rite Aid, Walgreens Boots Alliance Inc., and CVS Health Corp., is organized to eliminate pharmacy benefit managers from the equation.
Those are the people who manage prescription drug benefits on behalf of large employers, health insurers, and others. These middle managers are considered the quiet, lesser-known partner in the pharmaceutical model.
They’ve been criticized for what critics say is a lack of transparency about the rebates they receive and for keeping a large portion of cost savings from consumers.
Cuban’s company’s refusal to pay spread prices to third-party pharmacy benefit managers prohibits it from processing insurance claims. So, the online pharmacy is a cash-payment venture.
Consumers will have access to more than 100 generic medications at prices Cost Plus Drug officials say are often less than what insurance plans’ deductible and copay requirements would total.
Cuban says he wants to bring transparency to the generic drug pricing process and pass on a greater percentage of the savings to the customers.
The company will buy directly from third-party suppliers and, soon, manufacture its own products.
An $11 million, 22,000-square-foot factory in Dallas is expected to be ready to roll by the end of the year.
The company will sell at a discount with a 15 percent markup plus a $3 pharmacist fee.
Lucia Mueller is vice president of operations and communications at PharmacyChecker, a company that helps people find the lowest prices on prescription medication among licensed U.S. and international pharmacies.
They describe themselves as the only independent company monitoring and verifying the credentials of international online pharmacies and comparing prices of the prescription drugs available from these licensed pharmacies.
Mueller works to promote online access to safe and affordable medications and educate and warn consumers about the risks of rogue online pharmacy websites.
“Cuban’s supposed aim to cut out middlemen and lower medication costs is a worthy pursuit given the very dire consequences of high healthcare costs in this country,” Mueller told Healthline. “People are completely forgoing their drug therapies due to high costs.
“Unfortunately,” she added, “Cuban’s new venture currently only gives price relief for certain generic drugs, so patients are still locked outside in the cold when it comes to brand drugs.”
Mueller noted that users of the PharmacyChecker website are mainly scrambling to find affordable brand name medicines that do not yet have a generic counterpart available in the United States.
“The price differential of Januvia 100 milligrams ordered internationally versus bought in the U.S. is striking,” she said.
“But the price for the same amount from Turkey is just $40.70, from Canada, $150,” she noted. “Brand drugs that are the highest burden on patient’s finances, like Januvia and Eliquis, are nowhere to be found on Cuban’s site.”
Cost Plus Drug represents the evolution of Osh Affordable Pharmaceuticals, founded by Dr. Alex Oshmyansky, a radiologist, who told Cuban about his concept.
“I met Mark in a cold email that I sent to him on a whim,” Oshmyanksy told Healthline. “He is a genuinely good dude who likes people.”
Oshmyansky started that first company as a nonprofit to help people who could not afford their prescription drugs.
“I had seen enough patients have bad health outcomes and could not afford their medicines,” he said.
Cuban was impressed with Oshmyanksy’s pitch and agreed to support him. He changed the company name and hired Oshmyanski as the CEO.
Cost Plus Drug, as a public benefit corporation, is required to produce one or more public benefits and to operate responsibly and sustainably.
“We will do whatever it takes to get affordable pharmaceuticals to patients,” Oshmyansky said in a press statement.
“The markup on potentially lifesaving drugs that people depend on is a problem that can’t be ignored. It is imperative that we take action and help expand access to these medications for those who need them most,” he added.
Cost Plus Drug is already in business as an online pharmacy selling more than 100 medications, including for asthma, heart failure, and Parkinson’s disease to mental health, allergies, and cancer.
Although insurance is not accepted, Oshmyanksy says the price of the drugs is still less than what people pay even with insurance.
For example, the company sells imatinib, the generic cancer drug for Gleevec, for $17.10. The consumer saves $2,485.40, Oshmyansky says.
Cuban is also bringing the digital healthcare company Truepill on board to make the process seamless and assure a secure e-commerce experience as customers navigate the pharmacy’s website.
Since Cost Plus Drug deals only with generic drugs, that could limit its influence to some degree.
In the United States,
However, a generic drug can be marketed only after the brand-name drug’s patent has expired, taking up to 20 years after the patent holder’s drug is first filed with the FDA.
Before the COVID-19 pandemic, about 32 percent of the U.S. public had a positive opinion of the pharmaceutical industry.
That number has risen to 50 to 60 percent since the COVID-19 vaccines were introduced.
However, drug costs remain an issue for many U.S. consumers.
A Gallup poll in September reported that 18 million people in the United States could not afford at least one doctor-prescribed medication in the previous 3 months.
The president, who has also praised pharmaceutical companies for their work on the COVID-19 vaccines, bemoaned the price of prescription drugs.
He singled out the price of insulin to treat type 1 diabetes, which he said costs consumers $375 to $1,000 a month.
Biden’s measure, passed by the House of Representatives but not the Senate, would cap insulin prices at $35 a month.
“I think it’s safe to say that all of us, all of us, whatever our age, wherever we live, we can agree that prescription drugs are outrageously expensive in this country,” Biden said.
However, Oshmyanski says the pharmaceutical companies aren’t the biggest problem.
It’s the pharmacy benefit managers.
“The candid truth is that pharma hates the [managers] too because they cost the drug companies money,” he told Healthline.
“What we’re doing is a win-win-win. We decrease the administrative burden so pharma has more money for research and development, people save capital, patients get the drugs, and the health system saves on the whole,” he added.
Cuban summed it up on his company website by saying, “Everyone should have safe, affordable medicines with transparent prices.”