February 28, 2022
Mark Cuban is making headlines, and not for the reason you’d think.
The billionaire investor seized the opportunity to eliminate profit-hungry middlemen in America’s prescription pharmacy system and save consumers money through his new, online pharmacy for generic medications.
Back in January, Cuban launched “Mark Cuban Cost Plus Drug Company,” a new venture that bypasses Pharmacy Benefit Managers (PBMs) and offers discounted prescription medications straight from the manufacturer to the consumer—and at a much lower price. In fact, Cuban’s pharmacy sells more than 100 drugs at their original cost plus a flat 15% markup and a $3 pharmacy fee for each order. These affordable medications treat everything from asthma to Parkinson’s disease, and they’re making swift attempts to add more drugs to its growing inventory.
This move comes as PBMs, the corporate middlemen that manage prescription drug benefits for health insurers, consistently take the spotlight in the media and on Capitol Hill for their practice of driving up drug costs by pocketing rebates intended for patients at the pharmacy counter.
Unfortunately, PBMs have the healthcare industry in a tight grip and repeatedly get away with their egregious behavior. Don’t believe us? Recent data shows that the top three PBMs—CVS Health/Aetna, Express Scripts, and OptumRx—control nearly 80% of the prescription drug market and have very minimal oversight. Talk about a power trip.
Cuban’s new pharmacy ends the hierarchy and confirms there’s plenty of room for disruption in the current system.
You may be wondering, how Cuban’s company is able to dodge these middlemen? Cost Plus Drug Company functions as a pharmaceutical wholesaler and does not accept insurance, which means it can avoid paying PBMs spread prices required to process claims. As a result, his reinvisioned pharmacy model shields consumers from extreme markups on prescriptions.
It’s as simple as that.
Even government officials like Federal Trade Commission Chair Lina Khan strongly oppose PBMs’ recent business practices and want them closely investigated.They recognize that there is no room, especially during a pandemic, for PBMs to stand in the way of patients affording treatments—a life-or-death decision for some.
If Congress genuinely wants to lower drug costs for patients, maybe they should take another look at how greedy middlemen are driving up costs in the current model. Plenty of people look to Mark Cuban for business advice. Maybe the government should too.
