Tribune of the Stars
Mark Cuban’s latest business venture is perhaps even more watchable than his appearances on the reality show “Shark Tank.”
Even if you’re not a fan of this program, there are good reasons to keep an eye on what it does. It could save you money – potentially a lot of money – on generic drugs, although as always there are important consumer caveats.
The brash billionaire and owner of the Dallas Mavericks launched an online pharmacy with a mission: to disrupt the business model that makes the manufacture and distribution of prescription drugs reliably profitable. It’s a system that often forces consumers to struggle to pay for the drugs they need.
The Cuban remedy for this long-standing affordability problem: the Mark Cuban Cost Plus Drug Co., which has its own easy-to-remember web address: https://costplusdrugs.com/
The new company does not manufacture drugs, at least not yet. Instead, it claims to find savings by bypassing various “middleman” entities in the distribution chain. It also does not work for maximum profit.
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Instead, the company is a “public benefit corporation”. Unlike traditional corporations, the primary interest of these entities is not to create shareholder value, according to the Legal Information Institute at Cornell Law School. Instead, they focus on “the pecuniary interests of stakeholders, the interests of those involved and affected by the company (such as employees and customers), as well as the advancement of their objective of interest. audience”.
It’s a fancy way of saying that keeping prices low for consumers is part of the company’s goal. Specifically, the Cuban formula for savings consists of limiting the company’s profit margin to 15%, in addition to excluding “intermediaries” such as pharmaceutical benefit management (PBM) companies.
Examples of drug savings advertised on the website:
» Atorvastatin. This is the generic form of Lipitor, a brand name cholesterol-lowering drug. A 30-day supply of the 10-milligram capsules would cost $3.60 (before a $5 shipping charge and $3 pharmacy labor charge) from the Cuban pharmacy compared to $55.20 from d other retailers.
» Fluoxetine. A 30-day supply of the generic form of the antidepressant Prozac (20 milligram capsules) would cost $3.90 compared to $21.90 at other retailers. Again, there would be shipping and labor costs.
The Cuban approach is the kind of innovation badly needed to help control health care costs in the United States. His company is one of many promising efforts to reduce drug costs for consumers. Civica Rx, for example, is a not-for-profit generic drugmaker formed in 2018 by healthcare systems and philanthropies.
But several reality checks can dampen consumer enthusiasm.
One caveat has already been noted: modest shipping costs. Shipping means there is also a built-in delay. When medications are taken long-term, such as blood pressure or cholesterol medications, this is usually not a problem. But when you’re filling a prescription for pain or infection, it probably wouldn’t work.
Another caveat: the Cuban pharmacy claims to offer “hundreds” of drugs, but that’s still only a fraction of approved prescription drugs. What you need may not be available. One of the main reasons is that it only carries generic drugs. Many newer drugs may still be patent protected and therefore not available as generics.
Cuban’s website also does not accept health insurance. Consumers pay for their purchases directly, although they can use their health savings accounts. For those with insurance, it may be cheaper to fill prescriptions at a local pharmacy.
Stephen Schondelmeyer, a professor at the University of Minnesota’s College of Pharmacy and director of its PRIME Institute, is a fan of innovation. But he noted that pharmacists play a vital role in avoiding drug interactions. Filling prescriptions in multiple places (like getting a drug from one site online and another locally) could hurt this.
Schondelmeyer also notes that independent community pharmacists can offer competitive prices. For example, a 2016 Consumer Reports analysis found that drugstore chains “charged the most.”
Cuba’s online business is welcome, but not a panacea to keep drug costs down. More action is still urgently needed, especially from Congress, to further help consumers.