Bottom Line Up Front
Mark Cuban started CostPlusDrugs.com to drive transparency into the generic pharmaceutical market for consumers. They publish the actual cost of the drug that is charged by the manufacturer, and then add a pre-defined mark-up, fulfillment, and shipping fee. For many generics, CostPlusDrugs.com pricing is a fraction of what consumers are paying today. At Resilient Medical Solutions, we are excited to see high-profile companies taking a similar approach to business in other sectors.
Mark Cuban, owner of the Dallas Mavericks and Shark Tank star, started CostPlusDrugs.com, a venture whose sole purpose is to drive transparency into pricing of generic pharmaceuticals. The model is simple, publish the actual cost of the drug from manufacturer, add a predefined markup, fulfillment charge, and shipping charge to deliver the drug to the patient. Cuban was recently interviewed at the Association of Accessible Medicine conference, and provided his view of the pharmaceutical industry and how his venture is disrupting it.
In summary, when a patient is prescribed a drug and gets it fulfilled by their pharmacy, there are many organizations that fit between the manufacturer of the drug and the fulfilling pharmacy. These are organizations like insurers, pharmacy benefit managers (PBMs), accumulators, data aggregators, and the communication channel for pharmacy benefits (the switch). All of these organizations benefit from the prescription being filled and charge differing amounts and styles of fees that ultimately end up costing the consumer, or consumers employer if insured, additional money. One example, an oncology drug called imatinib (generic for Gleevec) has a retail price in the market of over $2,500. It is available on CostPlusDrugs.com for $17 which includes the markup, fulfillment, and shipping fee.
Similar tactics that add layers of cost are used in the general medical supply market for commodity products. Suppliers of these products use tactics such as bundling and wrap agreements to drive the cost of these products higher and cloud what the actual OEM cost of the product is.
At Resilient Medical Solutions, we are excited to see companies in other areas of healthcare provide transparent models similar to ours.
Full interview transcript with Mark Cuban linked below: