Cutting out the Middleman
Last updated: November 2022
I’m not a big follower of The National Basketball Association, but when Mark Cuban, owner of the Dallas Mavericks, told Forbes last year that the pricing for generic drugs was “ridiculous” I stood up and took notice.
You may remember Mark Cuban from the ABC reality series, Shark Tank. He also co-owns 2929 Entertainment, but his interests lie beyond basketball and reality shows. In an interview with Forbes Magazine, January 20, 2022, Cuban said that he wanted to “show that capitalism can be compassionate” and he added Cost Plus Drugs to his line of investments.1
My leukemia drugs are very, very expensive
I’m a leukemia patient and I’ve been prescribed imatinib to treat this blood cancer. In the United States the retail price of this medication is $9,657 per month. It’s not a price for the faint of heart and results in many blood cancer patients scrambling for their life-saving treatment.
Here’s where I get interested in what Mark Cuban is doing.
Imatinib is a generic drug. It is also sold under the brand name Gleevec. Not every drug has a generic version until the patent has expired and the drug is tested and approved by the FDA. This can take decades. The Wall Street Journal reports that in some cases the markup on generic drugs exceeds 1000%. Maybe this is why Imatinib is so expensive?
Saving money of drugs by cutting out the middleman
The Mark Cuban Cost Plus Drug Company (MCCPDC) cuts out middlemen. It is a registered pharmaceutical wholesaler and purchases drugs directly from manufacturers and works with drug manufacturers and pharmacies to negotiate rebates and cost-saving discounts.
The online pharmacy’s prices for generic drugs factor in a 15% margin on top of the actual manufacturer prices along with a $3 pharmacist fee. For someone like me, my leukemia drug (imatinib) now costs $47 a month!
Reducing markups all along the supply chain
“The Mark Cuban Cost Plus Drug Company is trying to reduce patient’s drug costs by really any means necessary,” said CEO Alex Oshmyansky in an interview with the Dallas Morning News January 19, 2022. “In our online pharmacy, we’ve essentially found a category of drugs which are extremely expensive, not really because of the price from the manufacturer, but because of the price markups due to middlemen in the supply chain, primarily pharmaceutical wholesalers and pharmaceutical benefit managers.”2
Oshmyansky said that thousands of people created accounts when the Cost Plus website launched in January 2022. The company only accepts cash, currently, but Oshmyansky hopes to be able to add insurance as a payment option in the future. Currently, most insurance deductibiles and co-pays are higher than the prices charged by Cuban's online pharmacy.
In order to order medications from the Cost Plus website, customers must contact their doctors for a new prescription.
Lowering the cost of drugs reduces the burden
Cutting out the middleman makes a big difference in the cost of generic drugs. Cholesterol medication Atorvastatin typically costs over $55. The Cost Plus charge is $3.60. Blood pressure prescription Amlodipine usually runs around $50. Cost Plus has it listed at $3.30. It’s all on their website.
I’ve been astonished at the prices of some of the drugs I've been prescribed. It can really place a blood-cancer patient in a bind. What meds are really necessary and what can I do without? This is one of the questions I’ve asked myself.
Has this ever happened to you too? I’d really like to hear about it in the comments below. Thank you so much for reading.
What blood cancer were you diagnosed with?