Cuban Cuts Costs- The Online Pharmacy Changing Medicine
Written by Pooja Suganthan
Edited by Elizabeth Badalov
“Shark Tank” billionaire Mark Cuban has started a low-cost online pharmacy. The Mark Cuban Cost Plus Drug Company (MCCPDC) seeks to sell common prescription medications at a discounted price.
On the Cost Plus website, Cuban advertises that "Everyone should have safe, affordable medicines with transparent prices.” The home page displays generic drugs at significantly discounted rates. For example, Imatinib, the generic version of Gleevec, has a retail price of $2,502.50, but MCCPDC sells it for $17.10.
Medication on Cost Plus costs the purchase price plus an additional 15% to cover company expenses. The company can offer such reduced prices because they do not accept health insurance. Cost Plus works directly with manufacturers and avoids negotiating with third-party pharmacy benefit managers. In traditional models, pharmacy benefit managers determine drug formularies and costs on behalf of health insurers, negotiate rebates from manufacturers, and distribute drugs to pharmacies for purchasers. Pharmacy benefit managers advocate for higher priced drugs because they received a higher rebate, but this works against consumers.
Stacie Dusetzina, a health policy professor at Vanderbilt University, said “They are avoiding the administrative challenge of working with health insurance and setting up reimbursement in those systems. So, in a way, this is just bypassing the paperwork aspect.”
Consumers with health insurance have to decide for themselves whether purchasing medication with cash or insurance coverage is more economical for them.
Considering the extortionate retail price of medication, Cost Plus is a promising alternative to a problem that the government has failed to solve. 7% of Americans have bypassed at least one prescription because they could not afford it. 10% of Americans under age 65 skip dosages to save medicine. Although Medicare helps cover prescription drug costs, most Americans under the age of 65 do not qualify. By selling prescription drugs at a lower price, consumers do not have to rely on health insurance to buy the medication that they need.
Mark Cuban’s Cost Plug Drug Company is a promising start to an amended drug market, but it has some limitations. For instance, the online pharmacy does not cover non-generic drugs. Further developments in online pharmacies can provide better alternatives for those who are uninsured, have high co-pays, or cannot afford their health insurance. The company's transparency and elimination of the middleman--pharmacy benefit managers--is reputable and creates positive strides in the realm of public health.
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