The Mark Cuban Cost Plus Drug Co. (CPD) launched in January 2022 to distribute and home deliver prescribed generic medications to consumers. The Texas-based business seeks to reduce the prices of generic drugs by leapfrogging financial negotiators and going straight to drug companies for supply, according to a news release.1
“It’s crazy that medications are priced the way they are,” investor Mark Cuban told The Rheumatologist. “The pricing process has been distorted by the big incumbents.
Customers can visit costplusdrugs.com to find out if their prescription is offered and how much CPD charges for the drug. Anyone who wants to order must provide an email address, and request and obtain a new prescription from “a U.S.-based provider,” before the medication can be mailed, according to the website.2
Price examples of a drug from CPD vs. retail prices at other unnamed companies are posted on the company website. Low prices are maintained by cutting out pharmacy benefit managers (PBMs) and negotiating directly with drug manufacturers, according to CPD website FAQs.3
“We’re different from your normal drug wholesaler. We think you should know how much your medications cost and why,” states the company on the website.
An example CPD price on its website shows the drug imatinib for leukemia as $39 for 30 tablets (400 mg), compared with a retail price of more than $9,000. GoodRx.com, another online prescription service, lists the same drug price at $119, with a specific pharmacy coupon, compared with an average retail price of $4,430.2,4
Cash Model
Mark Cuban
Mr. Cuban entered the prescription drug arena to assist businesses that provide medications coverage within their employee benefit plans, according to the news release. The company model is to operate online and offer cash customers prescription medications at 15 percent above wholesale price, plus minimal shipping and labor fees.1 Plans call for adding insurance as a payment option in the future.
It is as much the cachet as the cash that the billionaire Mr. Cuban brings to the table in the world of PBMs, according to Robert Popovian, PharmD, MS, chief science policy officer for Global Healthy Living Foundation. Other companies, such as Costco, have cash payment models similar to CPD, says the pharmacist who coauthored a white paper with the Schaeffer Center about how consumers overpay for generic medications and the merits of paying with cash.5
“Mark Cuban has a megaphone, and he gets the word out much bigger, better than policy think tanks or companies like Costco,” says Dr. Popovian. “I think his visibility is what’s important here, not what he’s technically doing because there are other people that are better established in this market.”
For years, physicians have complained about obstacles constructed by PBMs that make it difficult to get needy patients affordable prescription medications, says Michael Schweitz, MD, a rheumatologist and action network president of Alliance for Transparent and Affordable Prescriptions (ATAP). Dr. Schweitz is optimistic that Mr. Cuban can shake up the world of powerful PBMs and bring more accountability to that industry, a stated goal of ATAP.
“He gets it,” says Dr. Schweitz. “That’s really important. No one in the policy world, no one in the business world really understood the activities of PBMs, what they did and how many dollars they took out of the system and what kind of shenanigans, I’ll say, they were involved in. So it’s good to see someone of importance and someone in a very visible large business environment come out and talk about, in detail, his understanding of the egregious activities of PBMs.”
PBMs work for health insurance companies and operate on a large scale, which allows them to negotiate lower prices and discounts for prescription medications. Often, the price breaks are from rebates that drug companies offer to get their medications on prime positions of drug formularies.
Yet prescription drug costs keep rising, along with public pressure on PBMs to be more transparent about pricing practices. For example, a patient may be unaware that a visit to the pharmacy for a prescription could be cheaper if paid for with cash, instead of paying a health insurance copayment.
Dr. Schweitz
“One of the things that is missing in the United States is that patients don’t know what the price is going to be for their out-of-pocket costs when they walk into a pharmacy or physician’s office or hospital,” says Dr. Popovian. “It’s a mystery.”
PBMs were formed years ago initially to get patients better deals on the skyrocketing cost of prescription drugs, says Dr. Schweitz. They set out with a rational purpose, to control costs for insurance companies and help manage the supply of increasingly expensive medications to make sure they got to patients who needed them, he says.
“Along the way, the pharmacy benefit managers found that there was gold in those hills,” says Dr. Schweitz. “So not only could they effectively manage who got the drugs, but they could actually control how they were priced and take a percentage of each prescription for themselves.”
Dr. Schweitz says the system of PBMs evolved into one that created a tall financial wall that hindered physicians trying to get their patients the medications they need. In response, ATAP was founded to help educate policy makers about PBM pricing activities and advocate for legislation and regulation that would improve patient access to affordable prescription drugs.
“[Mr. Cuban] has done something else that ATAP has been trying to do, which is to educate the business community [about] how these PBM activities impact their employees’ prescriptions and their flow of dollars into the healthcare system,” says Dr. Schweitz.
When Cost Plus Drug launched in January 2022, CEO Alex Oshmyansky, MD, vowed the company would do whatever it takes to meet its mission to deliver affordable pharmaceuticals to patients.
“The markup on potentially lifesaving drugs that people depend on is a problem that can’t be ignored,” notes Dr. Oshmyansky in the release. “It is imperative that we take action and help expand access to these medications for those who need them most.”1
Cost Plus Drug has announced partnerships or agreements with other companies in the industry, including Truepill, which fills and delivers prescriptions, and Rightway, a pharmacy benefit manager that uses a cell phone app to connect with customers.6
Mr. Cuban and Dr. Oshmyansky describe their new enterprise as a vertically integrated pharmacy benefits manager. In addition to working with other companies, they have plans to build a pharmaceutical factory in Dallas.
Dr. Popovian
It remains to be seen whether Mr. Cuban’s recent venture into the drug industry can change the financial sway of big PBMs. At least for now, small molecule drugs commonly prescribed by rheumatologists, such as methotrexate and hydroxychloroquine, could become more affordable in the generic forms, notes Dr. Schweitz.
“I think it’s an important first step,” says Dr. Schweitz. “I’m hoping that he’s going to be able to build on it, and that ultimately our patients will have better access at lower costs for medications they need to treat their diseases.”
The CPD website currently lists only leflunomide under the section labeled Rheumatoid Arthritis medications. A general search under all medications also indicates that methotrexate is available for purchase through the company.
Hopeful advocates for lower cost medications wonder whether Mr. Cuban’s company, if it succeeds with generic medications, will be able to also tackle the even higher costs of brand name drugs.
One thing is for sure, says Dr. Popovian: From a public affairs perspective, and a policy perspective, a lot more people are paying attention to this issue now that Mr. Cuban is involved.
Catherine Kolonko is a medical writer based in Oregon.
References
- Cision PR Newswire. Mark Cuban Cost Plus Drug Company’s online pharmacy launches with lowest prices on 100 lifesaving prescriptions. Mark Cuban Cost Plus Drug Company. 2022 Jan 19.
- Homepage of Mark Cuban Cost Plus Drugs. https://www.costplusdrugs.com/. Accessed 2023 Feb 14.
- Frequently asked questions: Mark Cuban cost plus drugs company. Mark Cuban Cost Plus Drugs Company. https://www.costplusdrugs.com/faq/. Accessed 2023 Feb 14.
- Imatinib generic Gleevec. Last accessed 2022 Dec 2. https://www.goodrx.com/imatinib
- Trish E, Van Nuys K, Popovian R. U.S. consumers overpay for generic drugs. USC Schaeffer. Schaeffer Center White Paper Series. 2022 May 21.
- Press release: Mark Cuban Cost Plus Drug Company, PBC integrates with Rightway to lower prescription drug costs. Rightway. 2022 Sept 22.
