Mark Cuban’s New Online Pharmacy Provides Affordable Access to Some Common Prescription Drugs
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Mark Cuban, American billionaire entrepreneur, star of ABC’s “Shark Tank,” and owner of the Dallas Mavericks, has entered the online pharmaceutical industry. His latest business venture is the Mark Cuban Cost Plus Drug Company, which has promised affordable prices on all prescription medications and went live to the public on January 20, 2022. Its mission is to be “radically transparent” with its customers about drug costs.
For context, here’s a quick refresher on the current supply chain—what happens in the steps from the medication being created to a patient being able to access it—in the U.S.:
- The drug manufacturer makes the medication.
- The pharmacy benefit manager (PBM) acts as a broker between the manufacturer, pharmacies, insurance companies, wholesalers, etc. to finalize medication prices, including determining what dollar amount will be tacked on in addition to the base price of the medication as a drug rebate.
- The pharmacy dispenses the medication to the patient. If the patient has health insurance, they pay the rate negotiated between the manufacturer, the insurance company and the pharmacy. If the patient does not have health insurance, they pay the inflated price for the medication plus the additional costs from the drug rebate.
If this seems overly complicated and confusing, it’s because it is. Overhaul of the drug pricing and rebate system is a key conversation moving through U.S. federal and state government legislatures.
This is one of many reasons entrepreneurs are looking to enter and disrupt the prescription drugs market—because there is no universal federal healthcare or federal negotiation of drug prices in the U.S. (which means there is not yet a mechanism to negotiate or lower drug prices on a federal level), there are perceived opportunities for business people to reform the space based on pure market demand.
Enter: The Cost Plus Drug Company, which acts as both a prescription drug distributor and as their own PBM. The company states that they will ”share the details of its operating costs with clients and will share 100 percent of the rebates they receive from drugmakers.”
How does this work? The company states that they buy prescription drugs directly from manufacturers and sell them at a flat 15 percent markup with a $3 pharmacist fee. By cutting out the middleman (or, in this case, acting as their own middleman), they claim they can offer the lowest direct-to-consumer prices on more than 100 medications. They are registered as a pharmaceutical wholesaler.
Delivering to the 50 U.S. states, the company offers up to 90 percent savings on “ultra-high-cost drugs” by selling their generic versions, negotiating directly with drug manufacturers. According to their website, at this time, they do not deliver to American territories like the U.S. Virgin Islands, Puerto Rico or Guam, or outside of the United States. The company claims that their lower-cost model will improve adherence via increased access and affordability.
Savings vary by medication. For people with diabetes, for example, you can save as much as $16.40 on metformin. The listing price is $3.60 compared to the average retail price of $20. glipizide extended-release (ER) (Generic for Glucotrol XL) slashes typical retail prices in half, listing the medication at $6.23 instead of a $12.83 retail markup. Other diabetes drug savings that are listed include glimepiride (Generic for Amaryl), glipizide (Generic for Glucotrol) and metformin extended-release (ER) (Generic for Glucophage XR).
Diabetes patients may find that their generic prescriptions are still more affordable at retailers like Walmart. When searching for the best prices on your medications, it is always best to conduct a personal cost comparison analysis as different health insurance varies in coverage and access.
The prices listed on the Cost Plus Drug Company’s website have been calculated based on a 30-day supply of the lowest strength. So, depending on your needs, you may find that the final cost differs once your prescription is filled.
Medications for various conditions from diabetes to allergies to high blood pressure to hormone therapy and beyond are offered within the portal. Healthcare providers can fulfill prescriptions online or via phone, fax, or mail. To use the company as your pharmacy, talk to your healthcare provider about getting started. It is yet to be seen whether the company will expand into other medications beyond tablet form, such as insulin.
The Cost Plus Drug Company does not work with health insurance plans at this time, so this may impact the amount of money you pay out-of-pocket that is not reimbursable or applied towards your deductible.
When speaking with The Dallas Morning News, The Mark Cuban Cost Plus Drug Company CEO, Alex Oshmyansky, said, “(The company) is trying to reduce patients’ drug costs by really any means necessary. In our online pharmacy, we’ve essentially found a category of drugs, which are extremely expensive, not really because of the price from the manufacturer, but because of the price markups due to middlemen in the supply chain, primarily pharmaceutical wholesalers and pharmaceutical benefit managers.”
The company initially launched in 2018 under a version of Oshmyansky’s name as a startup, but Cuban went public with his backing a year ago. Oshmyansky was eager to include Cuban’s name in the company title after he offered it to prove that “capitalism can be compassionate,” expecting the affiliation to help garner more attention to the pharmaceutical.
Oshmyansky told The Dallas Morning News the initial investment Cuban made in his company was small, but Cuban was impressed with how much progress he made in a week and took on a more significant role as a result.
The company is building an $11-million, 22,000-square-foot manufacturing plant in Deep Ellum, a neighborhood in Dallas, Texas, with hopes to keep the enthusiasm around affordable access to prescription medications going and growing for years to come.
Editor’s Note: If you manage type 1 or type 2 diabetes without health insurance, get the help you need here.