Jan. 28, 2022 – Mark Cuban, owner of the Dallas Mavericks basketball team and star of the TV series Shark Tank, is endorsing a new online pharmacy that aims to lower the prices people pay for 100 generic drugs.
For example, the Mark Cuban Cost Plus Drugs Company (MCCPDC) plans to offer the leukemia treatment imatinib for $47 per month, compared to $120 or more with a regular coupon and retail price of $9,657 per month.
Other examples of lower-priced generic drugs include mesalamine, for the treatment of ulcerative colitis, which is available at the new online pharmacy for $32.40 per month versus $940 per month retail. In addition, the MCCPDC will offer the gout treatment drug colchicine at a lower price, charging $8.70 compared to $182 per month at retail.
Probably due in part to claims of significant cost savings and in part to Cuban’s celebrity status, the new company is receiving widespread media attention. Forbes, NPR and TMZ have shared the news since the new digital pharmacy was announced earlier this month.
The new company plans to charge consumers 15% above the manufacturing cost of the generic drugs, plus a $3 pharmacist’s fee and $5 for shipping. People still need a prescription from their doctor to get the drugs.
Generic prices and benefits
The top 100 generics account for about half of generics sales, and there’s enough competition for these high-demand drugs that “prices have dropped to almost zero,” says Dr. William Comanor, health economist and professor of health policy and management at UCLA Fielding School of Public Health.
The remaining generics have less demand, he says.
A prominent example is Daraprim, a decades-old drug against the life-threatening parasitic infection toxoplasmosis. The drug came under the spotlight in 2015 when Martin Shkreli and his company Vyera Pharmaceuticals bought the rights to manufacture the generic drug, raising the price from $13.50 to $750 overnight. In January 2022, a US judge banned Shkreli from the pharmaceutical industry and fined him nearly $65 million.
Comanor agrees the price should have been raised — $13.50 “wasn’t economically viable” — but not as high as $750.
“Let’s say Mark Cuban says he’s going to lower the price from $750 to $300. He will still make money. There’s a market for these low-volume products,” he says. “Plus there would be a social benefit.”
A digital direct-to-consumer pharmacy
MCCPDC “cuts out the middleman” in two ways. The business model is to charge consumers out of pocket, so insurance companies are not involved. The company also formed its own pharmacy business manager firm in October, allowing it to negotiate prices with drug manufacturers in-house.
The company also announced plans to complete construction of a 22,000-square-foot pharmaceutical facility in Dallas by the end of 2022.
Reactions on social media ranged from jubilant to disappointed people that their generic drug wouldn’t cost significantly less or wasn’t offered by the digital pharmacy.
On the positive side:
So far, the Mark Cuban Cost Plus Drug Company has already beaten the price of Rosuvastatin Calcium 10mg Tabs (Generic Crestor), AND I had bypassed my own insurer’s pharmacy service to buy it cheaper elsewhere. Its cost: $7.50 for a 90 day supply, that’s half of what I paid. pic.twitter.com/9mCOwcw3pM
— Scott Strumello (@strumello) January 19, 2022
On the bottom:
Mark Cuban’s wholesale pharmacy would cost me more than the one I currently use and people here are talking like he solved our country’s health crisis.
— Jay 🌊🇺🇸🏳️🌈🗽 (@FerrazzanoJay) January 24, 2022
And of course someone posted what would have happened if Cuban had presented this idea on Shark Tank:
Mark Cuban has launched an online pharmacy offering over 100 generic drugs at an adorable price. Still, I’m sure Barbara would find a reason not to invest in this company. pic.twitter.com/z86kePTVbf
— Volv ☁️ (@getvolv) January 24, 2022
Weighted by the number of prescriptions, generic drug prices have fallen in the US
“Overall, generic drug prices in the US are the lowest in the world,” says Comanor. “People say US drug prices are the highest in the world. This applies to branded products, but not to generics.”
“So if someone asks if drug prices in the US are the highest or lowest in the world, the answer is both,” he says.
“Maybe this new pharmacy plays a role,” says Comanor when asked if the initiative appears to be a positive development.
The state of California also announced plans to provide its own generic drugs, he says.
“But you won’t see a lot of entrepreneurs going into it because the volumes are so small. If Cuban called me, I’d tell him to supply Daraprim and similar low-volume products,” Comanor says of the billionaire.
“He’s a rich guy; maybe he can make it.”
SOURCES:
William Comanor, PhD, Health Economist and Professor of Health Policy and Management, UCLA Fielding School of Public Health.
Forbes: “Billionaire Mark Cuban Launches Online Pharmacy to Offer Affordable Generic Drugs.”
NPR: “Billionaire Mark Cuban Launches Online Pharmacy to Drive Down Generic Drug Prices.”
TMZ: “Mark Cuban launches online pharmacy offering cheap generic drugs.”
Twitter: @strumello, January 19, 2022; @FerrazzanoJay, January 24, 2022; @getvolv, January 24, 2022.
Medscape: “US judge bans Martin Shkreli from pharma, orders $64.6 million payment”, “California Rx: State could dip into generic drug market.”
Damian McNamara is a staff writer based in Miami. He covers a wide range of medical specialties, including infectious diseases, gastroenterology and critical care medicine. Follow Damian on Twitter: @MedReporter.
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