Mark Cuban’s Cost Plus Drugs – An Option For Wise Shoppers?

24 Jan Mark Cuban’s Cost Plus Drugs – An Option For Wise Shoppers?

By Alisa MacQuinn

Here at 2ndVote, we pride ourselves as an organization dedicated to truth, transparency and driven by integrity. So you can only imagine our excitement when new companies emerge supporting the same mission. In the past few months, Mark Cuban’s Cost Plus Drugs has been forming their ranks against Big Pharma and it’s ridiculous tendencies to tack on charge after charge as it passes through more and more hands. In line with our focus on basic freedoms and eradicating legislative and corporate injustices in our beloved country, we wanted to take a closer look at Cost Plus Drugs and how they plan to tackle this issue and even potentially bring order to our broken healthcare system.

History of Cost Plus Drugs

You may have heard of Mark Cuban as one of the investors on the ABC’s Shark Tank – a television show that allows eager entrepreneurs to pitch their business ideas to wealthy investors for a chance to have their product or service financially backed for success. Mark is also the owner of the Dallas Mavericks, the professional basketball team of the NBA. But in addition to that, he is a strong advocate for healthcare reform and has openly stated a passion for repealing ObamaCare policies and looking at our options from a new approach. ObamaCare (the Affordable Care Act) violates our basic freedoms by forcing Americans to buy a product and punishing them if they cannot. 

Alex Oshmyansky (MD/PhD), a radiologist in Dallas, Texas had been developing the company under a different name since 2018. But when Alex was told that he lacked the financial startup expenses to truly take the company to the next level, he decided to email Mark for help. As it turns out, Mark Cuban reads all of his emails personally and was intrigued by the idea. Fast forward to today, and the company has a new name and its own 22,000 square foot pharmaceutical facility in Dallas that is set to officially open in September 2022.

Mission

By purchasing drugs directly from the manufacturer, when unable to manufacture the drug themselves, Cost Plus Drugs is able to cut out the middle men in order to keep drug prices at their lowest. They are also committed to being what they call “radically transparent” when it comes to their costs and pricing. From listing salaries to the cost of the pharmaceutical facility and the drugs they purchase from other manufacturers, Alex Oshmyansky pledges to publicly display it all.

In a statement from Mark Cuban on the Mission page of the Cost Plus Drugs website, he states: “If you are fortunate enough to have health insurance with a low deductible, the high cost of drugs is driving up the premiums that you or your employer pay, making getting health insurance expensive and challenging.Our goal is to dramatically reduce the cost of drugs…, but we also think that it is just as important to introduce transparency to the pricing of drugs so patients know they are getting a fair price.” (https://costplusdrugs.com/mission/)

Why are medications so expensive in the first place?

While Cost Plus Drugs will either manufacture their own medications or purchase directly from the manufacturer, most pharmacies frequently use primary wholesalers tied into drastic contracts in order to receive rebates at the end of each year. They coordinate these contracts through pharmacy benefit managers (PBMs). These are third-party administrators for prescription drug distribution for insurance companies and employers to utilize. Essentially, they are being paid for convenience and services such as developing and maintaining formularies, processing claims, and negotiating discounts and rebates between payers and manufacturers. 

Cost Plus Drugs refuses to pay these extra costs to third-party PBMs. In fact, the announcement of the pharmacy launch comes just a few short weeks after the company constructed its own PBM operation (Mark Cuban Cost Plus PBM). If Cost Plus Drugs can make an offer to the drug manufacturers that completely removes the middle man of PBMs, they can actually save them a lot of money and completely eliminate the binding contracts and typically worthless promises of rebates.

The Cost Plus Drugs Cost Breakdown

Cost Plus Drugs first takes the true cost of the medication, then adds 15% so they can continue to run the company and invest in disrupting the pricing of as many drugs as they possibly can. They then add on the actual cost that their pharmacy partners charge to prepare and provide the prescription to the consumer. This method is used on every single medication that Cost Plus Drugs offers.

So let’s look at two drastically different examples:

First, we will start off with Imatinib which is a medication used to treat leukemia. “The price of Imatinib usually retails at over $9,000 per month, and the voucher price is $120.” Cost Plus Drugs, however, will be selling the life-saving drug for just $47 per month.

Second, we will look at Albendazole – a drug that is often used in poverty stricken areas as it is used to treat worm infections. Typical retail cost of Albendazole can cost as much as $437 per course – a drug that is needed most for those that cannot typically afford high priced medications. Cost Plus Drugs is offering the same drug and dosage for $33. And if you needed even more of a reason to question Cost Plus Drug’s motives, they started out their company by donating more than 10,000 tablets of Albendazole to cure parasitic infections in the most affected areas of the southern United States.

Viability

So you may be asking yourself about the quality of the medications being offered on Cost Plus Drug’s website with the cost itself being so low. Well, rest assured that the company is accredited by National Association of Boards of Pharmacy (NABP) and Utilization Review Accreditation Commission (URAC) – both registered 501(c)(3) nonprofits that have been in business over 30 years.

Cost Plus Drugs fulfillment partner, Truepill, is a digital health platform that delivers diagnostics, telehealth and pharmacy infrastructure to power consumer health experiences in a “direct-to-patient healthcare” format and has been featured in publications for Forbes and Business Insider.

Common Medications available through Cost Plus Drugs

To check for more medications available through Mark Cuban Cost Plus Drugs Company click here: Medications | Mark Cuban Cost Plus Drug Company (costplusdrugs.com) 

Future

With the construction of the 22,000 pharmacy facility soon to be underway, Cost Plus Drugs will be able to offer even lower discounts to consumers by mass producing some of the most common prescription drugs directly on site. But will they stop at prescription drugs? I think I speak for all of us here at 2ndVote when I say we will be keeping a close eye on Mark Cuban’s Cost Plus Drug Company and what promise lies in wait for their effect on the healthcare industry as a whole. They are sure to ruffle some feathers with this focused business endeavor but I for one cannot wait to see what an impact they can truly make. 

Meanwhile, we encourage you to search the 2ndVote scoring database for your pharmacy to ensure that match your values, and consider shopping local until more transparency like this is available.

To watch an interview with CEO Alex Oshmyansky explaining how Big Pharma marks up medications over and over, and how Mark Cuban Cost Plus Drugs’ approach will save you hundreds to thousands on the medications we need, click here: https://youtu.be/2uUw64eVjS0