Mark Cuban’s Cost Plus Drugs Offers Prescription Medications at Huge Discounts

What’s taking place

Mark Cuban began an organization that gives generic variations of medicines at extraordinarily low costs. A latest research calculated that Medicare might save billions with this enterprise mannequin.

Why it issues

Life-saving pharmaceuticals within the United States are sometimes too costly, particularly for individuals with out insurance coverage.

Billionaire entrepreneur Mark Cuban’s new pharmaceutical firm, which publicly launched in January, is promoting lots of of generic, generally used drugs with completely huge value cuts. And I imply huge. 

The generic model of Actos — prescribed for sufferers with diabetes and sometimes offered for $74.40 at normal pharmacies — is out there for $5.40 for 30 tablets, based on the web site. The generic model of Apriso — prescribed for sufferers with gastrointestinal illness and offered for $122.70 at normal pharmacies — goes for $36.60 for 30 tablets.

And that is only a snippet. The remedy ledger of the Mark Cuban Cost Plus Drug Company (sure, that is the complete title) is lengthy. The medication deal with circumstances starting from delicate migraines to acid reflux disease to most cancers to neurological issues. Cost Plus Drugs additionally sells the generic variations of quite a lot of psychological well being drugs like Wellbutrin, used to deal with despair, and Adapin, generally prescribed for anxiousness.

Overall, Cost Plus Drugs seems to function within the title of combatting a number of very urgent public well being points within the United States. “If you don’t have insurance or have a high deductible plan, you know that even the most basic medications can cost a fortune,” Cuban mentioned within the firm’s mission assertion. 

“Every American should have access to safe, affordable medicines,” he provides, and “we also think that it is just as important to introduce transparency to the pricing of drugs so patients know they are getting a fair price.”

With regard to the latter, the Cost Plus Drugs web site outlines exactly what you may be questioning proper now. How is it doable to slash drug costs? 

The mechanics of Cost Plus

Generally, it is fairly difficult how pharmaceuticals — like Humira, meant for sufferers with Crohn’s Disease, or the EpiPen, employed to deal with extreme allergic reactions on-the-spot — are priced. 

There are a variety of shifting components behind-the-scenes, involving the drug corporations themselves and insurers, to call simply two. But on the finish of the day, the price of remedy displays its demand. 

That means costs aren’t essentially dictated by what it took for drug producers to assemble components and do the work to really make the remedy. And whereas the price of analysis is usually used to justify excessive costs, a 2016 research discovered that “there is no evidence of an association between research and development costs and prices; rather, prescription drugs are priced in the United States primarily on the basis of what the market will bear.”


For occasion, EpiPen raised its value by 500% between 2007 and 2016, although that is positively a extra excessive instance of such a change. 

Further, when put next with world prescription drug costs, “there are many economic factors at work that lead the US to pay two-to-six times more for prescription drugs than other countries,” John Clark, medical affiliate professor on the College of Pharmacy and director of pharmacy providers at Michigan Medicine, mentioned in 2020. Those elements are additionally hidden throughout the complicated ins and outs of drug manufacturing within the first place.

Cost Plus Drugs has fairly a unique strategy from the norm.

First, the corporate goals to take away all of the elusive complexities behind drug manufacturing. Second, it intends not to cost rather more than manufacturing prices.

“Every product we sell is priced exactly the same way,” Cuban mentioned within the mission assertion. “Our cost plus 15%, plus the pharmacy fee, if any.” 

As an instance, Cost Plus Drugs’ value for albendazole, which treats tapeworms, is $26.08 per course, which is then marked up by 15% for firm prices to equal a complete of $30. Add on the pharmacy price of $3 and also you get a grand whole of $33. That’s the ultimate value, the corporate states, not together with delivery. 

And, per Cuban, the corporate additionally has a second technique of conserving prices as little as doable: Cost Plus Drugs does not intend to spend any cash on advertising, however somewhat depend on word-of-mouth. 

“We started this company as an effort to disrupt the drug industry and to do our best to end ridiculous drug prices,” he mentioned in his assertion.

Medicare might save billions

Like many consultants, Harvard Medical School researchers had been intrigued by this ultra-money-saving pharmaceutical endeavor — which is why they determined to quantify precisely how useful these low-cost medication can be on a bigger scale. 

They carried out a research, printed in June within the Annals of Internal Medicine, to calculate how a lot cash Medicare might have saved in a single yr if all of the generic medication they supplied to sufferers got here from Cost Plus Drugs as a substitute of pharmaceutical corporations with normal retail costs. 

In quick, billions. 

For 109 generic drugs offered by Cost Plus Drugs on Feb. 8 of this yr, the analysis staff recognized the value — together with pharmacy allotting and delivery charges — for the minimal and most portions accessible to promote in bulk. Minimum amount referred to 30 depend, and most to 90 depend.

Then, the staff regarded up 2020 Medicare Part D spending for 89 of these 109 medication. They disregarded 20 as a result of these had been those deemed incomparable to parallel, retail generic remedy at a close-enough diploma. 

After adjusting all collected costs to take away any confounding variables, like ingredient value between 2020 and 2022, the staff concluded that if Medicare bought generic medication within the most amount equipped by Cost Plus Drugs, it might have saved $3.6 billion on 77 of 89 generic medication in simply the yr 2020. If Medicare bought them within the minimal amount, it might have saved $1.7 billion on 42 of 89 of the medication. 

The staff additionally mentioned this can be a conservative estimate as a result of, since this evaluation, Cost Plus Drugs had added a bunch extra drugs. Nevertheless, the research mentioned, “our findings suggest that Medicare is overpaying for many generic drugs.”

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