How Mark Cuban's New Drug Company Sells Medications With Huge Discounts - CNET

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What's happening

Mark Cuban started a institution that offers generic versions of medicine astatine highly debased prices. A caller survey calculated that Medicare could prevention billions with this concern model.

Why it matters

Life-saving medicine drugs successful the United States are often excessively expensive, particularly for radical without insurance.

Billionaire entrepreneur Mark Cuban's caller company, which is little than six months old, is selling hundreds of generic, commonly utilized medications with perfectly monolithic outgo cuts. And I mean massive. Perusing the terms tags volition marque your jaw drop.

The generic mentation of Actos -- prescribed for patients with diabetes and typically sold for $74.40 astatine modular pharmacies -- is disposable for $6.60, according to the website. The generic mentation of Apriso -- prescribed for patients with gastrointestinal illness and sold for $122.70 astatine modular pharmacies -- goes for $36.60

And that's conscionable a snippet. The medicine ledger of the Mark Cuban Cost Plus Drug Company (yes, that's the afloat name) is long. The drugs dainty conditions ranging from mild migraines to acerb reflux to crab to neurological disorders. It besides sells the generic versions of a assortment of intelligence wellness medications similar Wellbutrin, used to dainty depression, and Adapin, sometimes prescribed for anxiety.

Picked up 4 prescriptions yesterday, utilizing GoodRX astatine Walgreens: astir $240. Checked the terms connected CostPlus Drugs, $33.60 for each 4. Looks similar $5 shipping for each, truthful full would beryllium $53.60, 90 days worthy of each. Retail terms for each 4? $643.76. https://t.co/yiL2sKm8lr

— Hayley (they/them/squealing Jutty Taylor fanboy) (@undeclared_milk) June 19, 2022

Overall, Cost Plus Drugs appears to run successful the sanction of combatting a fewer precise pressing nationalist wellness issues successful the United States. "If you don't person security oregon person a precocious deductible plan, you cognize that adjacent the astir basal medications tin outgo a fortune," Cuban said successful the company's ngo statement. 

"Every American should person entree to safe, affordable medicines," helium adds, and "we besides deliberation that it is conscionable arsenic important to present transparency to the pricing of drugs truthful patients cognize they are getting a just price."

With respect to the latter, the Cost Plus Drugs website outlines precisely what you mightiness beryllium wondering close now. How is it imaginable to slash cause prices? 

The mechanics of Cost Plus

Generally, it's beauteous complicated however name-brand medicine drugs -- similar Humira, meant for patients with Crohn's Disease, oregon the EpiPen, employed to dainty terrible allergic reactions on-the-spot -- are priced. 

There are a batch of moving parts behind-the-scenes, involving the cause companies themselves and insurers, to sanction conscionable two. But astatine the extremity of the day, the outgo of name-brand medicine reflects its demand. 

Checked Mark Cuban’s Cost Plus Drugs to spot however overmuch my prescriptions would be. My monthly generic meds would beryllium little than fractional the terms of what my security charges me. Spread the word. This could beryllium a crippled changer. @mcuban @costplusdrugs

— mislaid miss (@VodkaMuse) June 20, 2022

That means prices aren't needfully dictated by what it took for cause manufacturers to stitchery ingredients and bash the enactment to really marque the medication. And portion the outgo of probe is sometimes utilized to warrant precocious prices, a 2016 study found that "there is nary grounds of an relation betwixt probe and improvement costs and prices; rather, medicine drugs are priced successful the United States chiefly connected the ground of what the marketplace volition bear."

For instance, EpiPen raised its terms by 500% betwixt 2007 and 2016, though that's decidedly a much extreme example of specified a change. 

Further, erstwhile compared with planetary medicine cause prices, "there are galore economical factors astatine enactment that pb the US to wage two-to-six times much for medicine drugs than different countries," John Clark, objective subordinate prof astatine the College of Pharmacy and manager of pharmacy services astatine Michigan Medicine, said successful 2020. Those factors are besides hidden wrong the analyzable ins and outs of cause manufacturing successful the archetypal place.

Cost Plus Drugs has rather a antithetic attack from the norm.

First, the institution aims to region each the elusive complexities down cause manufacturing. Second, it intends not to complaint overmuch much than manufacturing costs.

"Every merchandise we merchantability is priced precisely the aforesaid way," Cuban said successful the institution ngo statement. "Our outgo positive 15%, positive the pharmacy fee, if any." 

As an example, Cost Plus Drugs' outgo for albendazole is $26.08 per course, which is past marked up by 15% for institution costs to adjacent a full of $30. Add connected the pharmacy interest of $3 and you get a expansive full of $33. That's the last price, the institution states, not including shipping. 

"We started this institution arsenic an effort to disrupt the cause manufacture and to bash our champion to extremity ridiculous cause prices," Cuban said successful his statement.

Medicare could prevention billions

Like galore experts, Harvard Medical School researchers were intrigued by this ultra-money-saving pharmaceutical endeavor -- which is wherefore they decided to quantify precisely however adjuvant these low-cost drugs would beryllium connected a larger scale. 

They conducted a study, published Monday successful the Annals of Internal Medicine, to cipher however overmuch wealth Medicare could person saved successful 1 twelvemonth if each the generic drugs they offered to patients came from Cost Plus Drugs alternatively of pharmaceutical companies with modular retail prices. 

In short, billions. 

For 109 generic medications sold by Cost Plus Drugs connected Feb. 8 of this year, the probe squad identified the terms -- including pharmacy dispensing and shipping fees -- for the minimum and maximum quantities disposable to merchantability successful bulk. Minimum quantity referred to 30 count, and maximum to 90 count.

Then, the squad looked up 2020 Medicare Part D spending for 89 of those 109 drugs. They near retired 20 due to the fact that those were the ones deemed incomparable to parallel, retail generic medicine astatine a close-enough degree. 

After adjusting each collected prices to region immoderate confounding variables, similar constituent outgo betwixt 2020 and 2022, the squad concluded that if Medicare purchased generic drugs successful the maximum quantity supplied by Cost Plus Drugs, it could person saved $3.6 cardinal connected 77 of 89 generic drugs successful conscionable the twelvemonth 2020. If Medicare purchased them successful the minimum quantity, it could person saved $1.7 cardinal connected 42 of 89 of the drugs. 

The squad besides said this is simply a blimpish estimation because, since this analysis, Cost Plus Drugs had added a clump much medications. Nevertheless, the survey said, "our findings suggest that Medicare is overpaying for galore generic drugs."

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