Mark Cuban’s Online Pharmacy Projected To Disrupt The Prescription Drug Market, But With Caveats

Final week, Mark Cuban Price Plus Drug Firm (MCCPDC) launched an online pharmacy. The launch comes simply two months after its pharmacy profit supervisor (PBM) operation was established.

MCCPDC had been a registered pharmaceutical wholesaler for greater than a 12 months, however initially it solely stocked a handful of medication. It now purchases greater than 100 generic medications straight from producers, bypassing middlemen to considerably decrease costs. It’s primarily a 503(b) compounding pharmacy, targeted on medicine that seem on the Meals and Drug Administration’s scarcity record.

There isn’t a query that Mark Cuban’s enterprise will have an effect, however will it’s as disruptive to the prescription drug market as some within the media challenge? Not initially. The corporate’s influence on the drug market as an entire can be restricted by the quantity and kind (generic) of medication provided, in addition to it being a cash-only system.

The corporate’s origins return to 2018 when Dr. Alex Oshmyansky based Osh Inexpensive Prescribed drugs. Mark Cuban financially backed Oshmyansky’s efforts, and greater than a 12 months in the past the corporate was renamed.

The agency’s mission assertion describes how it’s devoted to producing low-cost variations of high-cost generic medicine. Right here, the said objective is to be “radically clear” in its value negotiations with drug corporations.

Cuban’s agency lets all stakeholders know what it prices to fabricate, distribute, and market its medicine. In response to the corporate web site, there can be no hidden prices, no middlemen, and no rebates which can be solely accessible to well being insurers or pharmacy profit managers. “All people will get the identical low value for each drug we make.”

The agency says it would purchase straight from third social gathering suppliers or manufacture its personal merchandise and promote at a steep low cost with a 15% mark-up, plus a $3 pharmacist price.

Particulars are nonetheless scarce on the place the corporate will initially supply its medicines, however it’s planning to finish the constructing of a brand new manufacturing website by the tip of 2022. 

Whereas MCCPDC will have an effect, as at the moment constituted, it gained’t be as disruptive to the prescription drug market as some within the media have forecast.

First, MCCPDC solely applies to generics. Whereas there are definitely points with specialty generics pricing, these pale compared to the issues with branded pricing, whether or not within the type of excessive launch costs or annual will increase within the record costs of sure present brand-name medicine that exceed inflation.

Second, there are a number of limitations relating to the net pharmacy’s scope. As of now, the variety of merchandise provided – 100 – is relatively small. Extra importantly, Cuban’s firm doesn’t settle for prescription insurance coverage. Clearly, for the uninsured this doesn’t matter, and getting access to sure low-priced generics from Cuban’s firm can be very useful. Likewise, for the insured with excessive deductibles or different protection gaps in insurance coverage, MCCPDC will help. However, past the deductible house, for many insured prospects, MCCPDC is much less interesting. In addition to, insured shoppers who make use of Cuban’s on-line pharmacy is not going to have their out-of-pocket prices depend in the direction of their insurance coverage deductible or different protection gaps. This can imply that for pharmaceuticals not accessible at Cuban’s on-line pharmacy – which is the overwhelming majority of medication – the buyer must spend cash out of pocket on merchandise the insurer covers earlier than insurance coverage kicks in.

On this vein, MCCPDC additionally doesn’t deal with the a lot bigger downside of conventional pharmacy profit supervisor (PBM) dominance. Three PBMs – CVS Caremark, Specific Scripts, and Optum Rx – management over 80% of the market. MCCPDC is competing with retail pharmacies who will stay below the stranglehold, if you’ll, of the massive PBMs. If a retail pharmacy have been to show down all the insurance policy that they handle and change into cash-only, they’d lose virtually all their enterprise.

Transparency is the buzzword in healthcare. It’s straightforward to know why. U.S. healthcare markets typically lack transparency. And, with out it, the market can not function optimally. Billionaire Mark Cuban is to be recommended for tackling the dearth of transparency.

Furthermore, by providing improved entry to sure lifesaving medicine that sufferers rely upon, MCCDPC is offering a beneficial service. In an announcement, Alex Oshmyansky mentioned “it’s imperative that we take action and help expand access to those medicines for individuals who want them most.” Certainly, MCCPDC at the moment affords medicine to deal with a wide range of sicknesses, together with diabetes, most cancers, bronchial asthma, and cardiovascular situations.

However, restricted choices and being a cash-only enterprise reduce the disruptive influence of Cuban’s modern on-line pharmacy on the prescription drug market as an entire.