Why Cuban put his Mark on Cost Plus Drugs
Had Cost Plus Drugs founder Mark Cuban been pitched the pharmacy benefit manager (PBM) model at Shark Tank, it would have been a hard no, he told Axios reporter Hope King at the Axios BFD on Wednesday.
"I would have f**ked them up," Cuban said.
Why it matters: Cuban's transparent, direct-to-consumer pharmacy model shines a light on inefficiencies in the current drug supply chain and reimbursement system, which includes wholesalers, PBMs, pharmacies and insurers.
The intrigue: Cost Plus is the only health tech investment that Cuban has put his name on.
- "I put my name on it because what we’re really selling is not medication, it’s trust," he told King.
Catch up quick: Cost Plus launched in January promising steep discounts on 100 generic medications. Its prices include a flat 15% fee and a $3 charge for pharmacists' labor.
- "Not everyone sets the goal of being the lowest cost producer and provider," Cuban told Axios in an email at the time. "My goal is to make a profit while maximizing impact."
- The company, which for the most part only accepts cash, uses Truepill’s platform to fill and deliver prescriptions.
- Cost Plus charges $47 a month for Imatinib (Gleevec), a common leukemia medication that typically retails for more than $9,600 a month or, with a drug voucher, would cost roughly $120 a month.
State of play: 1.2 million people have created accounts with Cost Plus, said Cuban, and the company now offers 1,000 generic medications.
- Rivals to Cost Plus include other digital pharmacies such as Ro and Amazon Pharmacy.
- "I had to tell [Jeff] Bezos, 'For your pharmacy business, your margin is my opportunity,'" said Cuban.
Meanwhile, the company is building an $11 million, 22,000-square-foot factory in Dallas that was set to be completed this past April.
Flashback: A research report published in June in the journal Annals of Internal Medicine suggested Medicare could have saved up to $3.6 billion a year had it purchased generic drugs from Cost Plus.
Yes, but: While Cost Plus offers price transparency and some drugs at significantly lower prices than other pharmacies, it's still possible to get other generics for less money from companies including GoodRx, for example.
What's next: "We want to be the low-cost provider for any available medication," says Cuban.
- As far as its Dallas manufacturing plant, Cuban says Cost Plus will start with injectables.
- Cost Plus is laser-focused on its mission to provide low-cost meds, with no intention to over-expand, Cuban says.
- "You’re not gonna see telehealth" on the site, he told King.
The bottom line: "The whole pharma industry is intentionally distorted," said Cuban, adding, "and now it’s my turn to f**k them up.