Mark Cuban has always been an innovator and a disrupter. It’s part of the reason he’s a successful billionaire. With his Cost Plus Drug Company, Cuban is looking to shake up the multibillion-dollar pharmacy industry by lowering healthcare costs for all.
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But what steps is Cuban actually taking to accomplish this? Here’s a look at the method behind Cuban’s mission.
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Using a Direct-to-Consumer Model
The savings with Cost Plus Drugs begins with its delivery model, which is direct-to-consumer. The process begins with the company buying drugs directly from manufacturers and then reselling them to the public with a markup of no more than 15%, plus a pharmacy service fee. According to Cuban, this allows his company to offer “the lowest prices on meds anywhere.”
Cutting out the middleman and limiting the markup on his drugs helps lower healthcare costs for consumers. Its direct, online model also makes it easier for consumers to get the drugs that they need by mail, potentially saving trips to a pharmacy or mailbox.
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Having Discussions With CMS
Cuban’s company is also bringing attention to just how expensive drugs often are. To that end, Cuban told the Becker’s Hospital Review Conference in 2023 that Cost Plus Drugs has had discussions with the Centers for Medicare & Medicaid Services (CMS) about Medicare’s drug pricing and how it can be lowered.
By discussing drug costs openly with as important a pricing mechanism as Medicare, Cuban is both bringing attention to the issue and giving notice that he’s going to use leverage to pull down healthcare costs. Of course, he is also publicizing his own for-profit business, but the net effect could be beneficial for all.
Cuban’s stance is backed up by an independent study published in the Annals of Internal Medicine. According to the study, if CMS paid the same prices as Cuban’s Cost Plus Drugs for 77 medications, it could have saved a whopping $3.6 billion in generic drug costs. This is a massive amount of savings and gives some indication of how much money Cuban’s drug company could save Americans.
Expanding Access
Cost Plus Drugs is working to broaden access to its mail-order drugs by establishing affiliated networks of both retail grocery stores and independent pharmacists. This allows more Americans, particularly those in rural areas, to gain access to lower-cost drugs, either via the U.S. mail or by picking up their prescriptions at local storefronts.
By expanding access to more affordable drugs, Cuban’s company can increase the number of customers who are paying less to get what they need.
Adding More Name-Brand Drugs
Cost Plus Drugs currently offers mainly generic medications. This was a good play early in the company’s life span, as generics typically sell for a fraction of the retail price of name-brand drugs.
However, to truly save customers more money, Cuban has expressed his desire to expand access to branded versions of drugs, Forbes reported. If Cuban and Cost Plus Drugs can find a way to sell name-brand drugs at a reduced rate, customers could end up saving much more.
A Contribution to Lower Costs
No one man or company can lower the cost of all drugs for all people. But Cuban’s Cost Plus Drugs is making strides. Simply by publicizing the high cost of drugs, Cuban is putting pressure on providers to make them more affordable.
The company, of course, has its own competitors, such as Costco, that also strive to lower costs for consumers. But the more that companies compete, the more affordable products become.
While he’s not solely responsible for lowering healthcare costs, Cuban and Cost Plus Drugs are making a contribution.
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Sources
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The Dallas Morning News, “Does Mark Cuban’s drug company offer the best prices? Kaiser Health News put it to a test.”
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Becker’s Hospital Review, “10 exclusives Mark Cuban told Becker’s in April.”
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Annals of Internal Medicine, “Potential Medicare Part D Savings on Generic Drugs From the Mark Cuban Cost Plus Drug Company.”
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Forbes, “Mark Cuban’s Cost Plus Drugs Sparks Others To Change How Rx Meds Are Priced.”
This article originally appeared on GOBankingRates.com: 4 Ways Mark Cuban Is Lowering Healthcare Costs
