All about Mark Cuban, his Cost Plus Drug company and its latest venture

Multi-millionaire investor Mark Cuban, who decided to reign anew after facing many setbacks at the professional front, today owns the National Basketball Association (NBA) team Dallas Mavericks, co-owns 2929 Entertainment and has investments in ABC’s reality TV show Shark Tank along with various other startups. Having an estimated net worth of USD 4.7 billion (INR 382 crores approx) as per GQ (2022), Cuban has also been interested in healthcare and is currently making headlines with his online pharmacy Cost Plus Drugs which was officially launched by Mark Cuban Cost Plus Drug Company (MCCPDC) on 19 January 2022.

With the motto “No middlemen. No price games. Huge drug savings,” Cost Plus Drugs provides over 800 (as noted by CNBC) generic drugs that treat common diseases such as leukaemia, cancer and dementia at the lowest possible price. A leukaemia medication called Imatinib, which has a retail price of over USD 2,500, is sold for just USD 14.40 at Cost Plus Drugs. The online pharmacy is different from other drug manufacturers and maintains a low price for everyone, regardless of health insurance.

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Here’s all we know about the new Cost Plus Drug venture

Why is there a need for low-cost medication in the US?

According to experts, exorbitant medication prices lead to most people in the US, including those with leukaemia or diabetes, skip their prescribed drugs.

A recent poll from Kaiser Family Foundation (KFF), reveals that eight out of ten adults in the US think the cost of prescription drugs is unreasonable. A part of the survey reads, “Affordability is a bigger issue for those who are currently taking four or more prescription medicines. Three in ten of those taking four or more prescription drugs say they have difficulty affording their prescriptions (32%), compared to one in five adults who currently take three or fewer prescription medications.”

Regarding groups in the society that find it most difficult to afford medication, the survey further points out that “certain groups are much more likely to report difficulty affording medication, including those who take four or more prescription drugs, those with chronic conditions in their households, and those with an annual household income of less than $40,000.”

The Mark Cuban Cost Plus Drug Company

Mark Cuban once told GQ that “whatever it is that you’re creating, you have to be able to sell because you don’t want to be in a position where you’re dependent on other people.” And transparency in their low prices is what Cuban chose to sell numerous stacks of safe and affordable medicine with Cost Plus Drugs.

Founded by Alex Oshmyansky and Cuban in 2016, Mark Cuban Cost Plus Drug Company (MCCPDC) is steadily disrupting the pricing of generic drugs and has a growing customer base of over 1.5 million.

As a public-benefit corporation, the company prioritises their “social mission of improving public health.”

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How did MCCPDC start?

According to an NBC interview, Cuban’s interest in the healthcare sector was piqued by Martin Shkreli, the ‘Pharma Bro,’ who received backlash for hiking the price of the medication ‘Daraprim’ (used to treat a parasitic infection that can strongly affect people with weakened immune systems, such as those with HIV and cancer) by more than 4,000 percent.

“If this Pharma Bro guy can raise prices 75%, 100%, there must be inefficiencies in this marketplace to reduce prices in the same manner,” says Cuban.

Cuban further reveals in the NBC interview that his interest to invest in healthcare solidified after a 2018 email from Dr. Alex Oshmyansky, a radiologist. Oshmyansky, who was then working in a medical diagnostic imaging centre in Dallas called Vision Radiology, had pitched the idea of a business solely focused on bringing down the high rates of prescription drugs.

“I started reading the email, and I’m like, ‘This guy gets it. I need to talk to him some more,” adds Cuban.

MCCPDC’s new online pharmacy venture

Two months after establishing its pharmacy benefit manager (PBM) operation, MCCPDC launched an online pharmacy in January 2022. The company has been a registered pharmaceutical wholesaler for quite some time now, only stocked a handful of drugs in its initial stage. However, after the launch of its new Cost Plus Drugs online pharmacy venture, they have started offering over 800 generic drugs at discounted prices.

Instead of negotiating prices through pharmacy benefit managers, Cost Plus Drugs directly negotiates with manufacturers to get generic drugs at wholesale prices. Their generic medications cost include a 15 percent markup, a USD 3 pharmacy labour charge and USD 5 for shipping.

 

 

 

 

 

 

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A post shared by Mark Cuban Cost Plus Drug Co (@costplusdrugs)

Talking about their affordable prices, Oshmyansky, CEO of Mark Cuban Cost Plus Drug said in an announcement, “We will do whatever it takes to get affordable pharmaceuticals to patients. The markup on potentially lifesaving drugs that people depend on is a problem that can’t be ignored. It is imperative that we take action and help expand access to these medications for those who need them most.”

How to order medication from the online pharmacy?

According to the Cost Plus Drugs online pharmacy website, the following steps are necessary to order medication in their online pharmacy:

• First search your required medication alphabetically or by medical condition on the online store.
• Once it is found, sign up for an account.
• Read the instructions carefully and then reach out to a doctor or provider with the provided contact-your-doctor link to receive the prescriptions.
• As soon as the prescription from your US-based provider or doctor is received, a notification to checkout will appear.
• Following this, the medications will be delivered straight to your door within a few days.

What is the next step of the online pharmacy?

In one of the NBC interviews, Cuban mentioned that the next step his online business will deep dive into is tackling the high insulin prices and making them affordable. He also pointed out that “adding insulin to the company’s offerings will be an expensive endeavour. The business has already spent $5 million  just to go through the initial phases of selling the medication and even considered spending another $150 million to $250 million to create a manufacturing plant.”

However, the entrepreneur is ready to invest more in lowering drug prices “as it’s the right thing to do,” Cuban tells NBC News.

The diabetes medications currently available at the Cost Plus Drugs company include Acarbose (Generic for Precose), Glimepiride (Generic for Amaryl) and Glyburide (Generic for Glyburide). As to when the online pharmacy venture will offer insulin directly to consumers, Cuban said, “It may be a month, it may be six months, it may be two years.”

NBC news also shares that as of now, Cost Plus Drug Co. is considering a test programme for an insulin set that will provide a 90-day supply of insulin, or a total of 12 vials, for USD 170. Apart from this, Cuban is currently focusing on partnering with insulin-makers for producing the drug at a large scale.

Once ready for sale, the diabetes medicine would join other generic drugs that the online prescription drug pharmacy now offers.

Hero and featured image: Courtesy sharktankabc/mcuban/Instagram

This story first appeared on Augustman Singapore.