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Mark Cuban’s Cost Plus Drug Company and Its Potential Impact on Drug Pricing and Shortages

Drug shortages have gone from being once in a while to a day-to-day occurrence. Health systems are also faced with managing cost containment. The impact of these constant challenges has left the need to find and explore affordable safety nets to ensure patient care is maintained.

Mark Cuban announced that he was joining the healthcare sector and recently launched the Cost Plus Drug Company. The mission of Cost Plus Drug Company is to alleviate shortages, reduce cost, and provide transparency in pricing. This new entrant has many of us wondering about its true impact and if it should be included in our procurement processes.  

Provided below is information and guidance on the Cost Plus Drug Company and how to best utilize it. We have also compared side by side the Cost Plus Drug Company and Good RX both which have similar direct-to-consumer business models. Lastly, we identified some medications and compared pricing across various pharmacy platforms

Frequently Asked Questions:

What is the Cost Plus Drug Company?

  • It is a direct-to-consumer company that manufactures and sells various drug products
  • Area of focus is to increase affordability, availability, and access of medications
  • Incorporates transparency in drug pricing

What kind of products does the Cost Plus Drug Company make?

  • At this time the drug product list consists mostly of tablets, oral suspension and inhalers
  • The company recently announced that it has started to manufacture epinephrine and norepinephrine 
  • If a drug is not currently listed on the product list, the official site does allow for submission of drugs the consumer would like to see added

How does Cost Plus Drug Company provide price transparency?

  • Cost Plus Drug Company guarantees that the below formula will be applied to all products to determine product pricing
  • Pricing Formula: (Price of the drug + 15% markup + cost of pharmacy charge which is $5.00)
    • EX) (Albendazole drug price is 26.08 ) + (15% markup) +  (5.00 pharmacy charge)                = final cost of $35.00

Does Cost Plus Drug Company have the lowest pricing on drug products?

  • Each product needs to be evaluated individually.  There are some products where the Cost Plus Drug pricing is lower and some products where it is not
  • See price comparison table of products below 

How is the Cost Plus Drug Company currently addressing drug shortages?

  • The corporate strategy is still being finalized. At this time, no key drug shortage products have been manufactured; however, the drug product list continues to be modified to add additional products
  • For example the following products are not available (Ozempic, Lorazepam, Adderall) 
  • Cost Plus Drug Company also has medications that are labeled as “Out of Stock” and has a way of notifying consumers when a product has made it back to stock and is available

What is HealthTrust/CHC’s current stance and guidance on Cost Plus Drug Company?

  • In evaluating Cost Plus Drug Company, although they promote addressing drug shortages and high cost medications,the current drug product list does not reflect this. Instead, it tends to be more heavily focused on generics and available products that  are cheaper or comparably priced within current distribution channels.
  • There are also operational concerns to consider such as (capability of DSCSA, Unit dose packaging is not available, products do not appear to have an NDC or scannable barcode
  • HPG/CHC will continue to monitor, value and assess should anything change

 

In summary, Mark Cuban’s Cost Drug Plus Company seems to have potential to make an impact in healthcare. At this time, the company appears to be heavily focused in the generic direct-to-consumer space. There appears to be little impact on drug shortage and high dollar medications at this time; however, the product list continues to be modified.  As patient care advocates, we will continue to monitor and evaluate its impact.

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