Mark Cuban’s new drug company shakes Medicare drug prices with potential savings of $3.3 billion

Billionaire entrepreneur Marco Cubano he’s making strides in his mission to disrupt drug prices in the United States through his company, Cost Plus Drugs. At a recent conference, Cuban shared exciting new developments with payers and pharmacists.

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Cuban revealed that his company has engaged with the Centers for Medicare & Medicaid Services (CMS) to discuss Medicare drug pricing. Cost Plus Drugs sent CMS a price list on April 3 that focused on generic specialty drugs like imatinib, which is used to treat certain types of cancer. A study published in the Annals of Internal Medicine last June found that if CMS had paid the same prices as the Cuban online drug company, it could have saved up to $3.3 billion in generic drug costs.

The study compared the prices of 89 generic drugs sold by Cost Plus Drugs in 2022 with the prices paid by Medicare Part D plans in 2020. The researchers found that Medicare paid the most for 77 drugs, for a total cost of 7, $8 billion compared to the $4.5 billion they could have paid by purchasing from Cost Plus Drugs.

Although Cost Plus Drugs has 1,100 generics and only four brand-name products, Cuban has expressed a desire to expand the company’s reach beyond generics by adding more brand-name drugs. Controlled substances and specialty drugs not authorized for mail order would be excluded from this expansion.

In an effort to increase patient access to mail order drugs, Cost Plus Drugs is working to expand its affiliate network with independent pharmacists and grocery retail chains. This would allow patients to pick up their prescriptions at local outlets rather than having to order them by mail.

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Cost Plus Drugs is entering a market that has long been dominated by pharmacy benefits managers (PBMs), but it appears they’re not the only ones challenging the status quo. Many other companies are offering alternative models to the traditional opaque and consumer-unfriendly practices of PBMs. This competition is making PBMs take notice, particularly as they face increased scrutiny from Congress, which is currently proposing regulatory reforms to address the problems.

According to Erin Trish, Ph.D., co-director of the Schaeffer Center for Health Policy & Economics at the University of Southern California, who recently testified at congressional hearings on PBM business practices, these new companies are responding to the distortions created by intermediaries in the pharmaceutical supply chain. They offer a transparent approach that is more focused on the consumer, rather than maximizing profits through hidden fees and markups. This change is likely to further test the market dominance of PBMs and could lead to much needed changes in the industry.

Invest in healthcare startups

Mark Cuban and other entrepreneurs are constantly finding new ways to revolutionize industries like healthcare. And thanks to the JOBS Act, a relatively new piece of federal legislation, anyone can invest in these disruptive startups. For example, iRemedy is a startup building an AI-powered healthcare procurement network to help reduce healthcare costs. Like Mark Cuban’s Cost Plus Drugs company, the industry is primed for innovation with out-of-control health care costs leaving families with huge debts. Startup Mark Cubans and iRemedy are employing new and disruptive solutions to reduce these burdens on families.

See more at startup investment by Benzinga.

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