Billionaire entrepreneur Mark Cuban is making strides in his mission to disrupt drug pricing in the United States through his company, Cost Plus Drugs. At a recent conference, Cuban shared exciting new developments with payers and pharmacists.
Cuban revealed that his company has been engaging with the Centers for Medicare & Medicaid Services (CMS) to discuss Medicare drug pricing. Cost Plus Drugs sent CMS a price list on April 3 focusing on generic specialty drugs like imatinib, which is used to treat some cancers. A study published in the Annals of Internal Medicine last June found that if CMS paid the same prices as Cuban’s online drug company, it could have saved up to $3.3 billion in generic drug costs.
The study compared the prices of 89 generics sold by Cost Plus Drugs in 2022 with the prices paid by Medicare Part D plans in 2020. The researchers found that Medicare paid more for 77 drugs, costing a total of $7.8 billion compared to the $4.5 billion they could have paid by purchasing from Cost Plus Drugs.
While Cost Plus Drugs has 1,100 generics and only four name-brand products, Cuban expressed his desire to expand the company’s reach beyond generics by adding more name-brand drugs. Controlled substances and specialty drugs not cleared for mail orders would be excluded from this expansion.
In an effort to increase patient access to mail-order drugs, Cost Plus Drugs is working to broaden its affiliated network with independent pharmacists and retail grocery chains. This would enable patients to pick up their prescriptions at local outlets rather than having to order them by mail.
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Cost Plus Drugs is entering a market that has long been dominated by pharmacy benefit managers (PBMs), but it appears that they are not the only ones challenging the status quo. Many other companies are offering alternative models to the traditional opaque and consumer-unfriendly practices of PBMs. This competition is causing PBMs to take notice, particularly as they face increased scrutiny from Congress, which is currently proposing regulatory reforms to address the issues.
According to Erin Trish, Ph.D., co-director of the University of Southern California Schaeffer Center for Health Policy & Economics, who recently testified at Congressional hearings on PBM business practices, these new companies are responding to the distortions created by intermediaries in the pharmaceutical supply chain. They offer a transparent approach that is more focused on the consumer, rather than on maximizing profits through hidden fees and markups. This shift is likely to further challenge the market dominance of PBMs and could lead to much-needed changes in the industry.
Invest in Healthcare Startups
Mark Cuban and other entrepreneurs are constantly finding new avenues to disrupt industries such as healthcare. And thanks to the JOBS Act, a relatively new piece of federal legislation, anyone can invest in these disruptive startups. For example, iRemedy is a startup creating an AI-based healthcare procurement network to help reduce healthcare costs. Like Mark Cuban’s Cost Plus Drugs company, the industry is ripe for innovation with out-of-control healthcare costs leaving families with massive debt burdens. Mark Cuban’s startup and iRemedy are employing new and disruptive solutions to reduce those burdens on families.
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