I am not a basketball fan, but that doesn’t mean I don’t know this guy. I am also not a fan of the “Shark Tank”, that CNBC television program.
But, Marc Cuban started a venture when he was 24 called MicroSolutions. This was one of the first system integrators and he sold it some 6 years later for about $ 30 million. Then he started Audionet (which became Broadcast.com) that he sold for the paltry sum of $ 5.7 billion in Yahoo stock!
Obviously, Marc is a serial entrepreneur. And, one of his newest ventures is Cost Plus Drugs Company. This online company delivers drugs to patients at low prices, which complete transparency as to costs. There are some 400000 subscribers to this service as of now.
Cuban purchases generic drugs from manufacturers and then marks those prices up 15% for sale directly to consumers. (There is also a $ 3 dispensing fee and a cost of $ 5 for shipping.) While this often provides drugs are remarkably lower prices, there is a problem. One’s insurance, one’s prescription plan is not a participant, so the price for the drug is exactly what one pays. There is no copay option. The cost for these drugs don’t count against insurance deductibles.
But, the concept is intriguing. Drs. HS Lalani, AS Kesselheim, and BN Rome (all from Brigham/Women’s Hospital, Massachusetts) analyzed 89 generic drugs offered by Cuban’s venture. In their study, published in the Annals of Internal Medicine. they attempted to discern how much Medicare could save by using that as a supply. Not surprisingly, the costs savings for aripiprazole, a single psychiatric drug, would have been more than $ 200 million in 2020! In other words, there are billions of dollars of savings (study suggest $3.6 billion in a single year) that can be obtained by a liaison with Medicare and Cost Plus Drugs. (Medicare dropped some $ 116 billion on prescription drugs last year.)
The researchers also mention that Cuban does not have a monopoly on this concept. Walmart, Costco, and GoodRx have similar concepts. And, Cuban’s venture doesn’t even hazard handling brand name drugs- including biologics and specialty drugs- yet!
The real trick is we need Congressional action. You know that component of the Build Back Better program that was scuttled. The drug portion is supposedly being revised as we speak. We need to kill the multiple actors in the supply chain that are aggrandizing costs.
I had investigated Cost Plus a few months ago, because my spouse goes into the donut hole each July due to an expensive medication that won’t go generic until 2026 at the earliest. They beat Good Rx on several generics we take (substantial savings), but, of course, you also have to depend on mail order. There are various reasons why we would rather not. Fortunately, I’m still working part time, but we may have to make that decision at some point to at least save money on generics. I already use Good Rx for some prescriptions and am thankful they exist. So sad Mark can only do what he is doing with generics.
Let’s hope Congress revamps the Medicare procurement, to lower costs for everyone.