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Jun 21, 2022 - Health

How much Medicare could've saved with Mark Cuban's generic drug company

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Illustration of medical pills with half of the capsule created from paper money.

Illustration: Rae Cook/Axios

Medicare could have saved up to $3.6 billion in a single year if it were purchasing generic drugs as billionaire businessman Mark Cuban's online pharmacy does, says a research report published in the Annals of Internal Medicine.

Why it matters: Medicare is overpaying for some generics, the authors said.

Details: The Mark Cuban Cost Plus Drug Company (MCCPDC) launched in January, selling more than 100 generic prescriptions at the cost of ingredients and manufacturing plus a 15% margin, $3 pharmacy dispensing fee and a $5 shipping fee.

  • So the researchers from Brigham and Women's Hospital and Harvard Medical School compared the price of 89 generic drugs sold by the company to the price Medicare paid in 2020.
  • Medicare could have saved up to $3.6 billion, or 37% of total spending, on 77 generic drugs if it purchased generic drugs in the maximum quantity supplied by MCCPDC.

The lower drug prices from a direct-to-consumer model highlight inefficiencies in the current drug supply chain and reimbursement system, which includes wholesalers, pharmacy benefit managers, pharmacies, and insurers.

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