Even Mark Cuban wants in on healthcare
The cost of brand-name drugs has increased substantially in recent years. Billionaire investor Mark Cuban has established an online pharmacy that offers 100 generic medications at a low price in order to "radically transparent" with pharmaceutical firms during price negotiations.
Mark Cuban Cost Plus Drugs Company (MCCPDC) is a registered pharmaceutical wholesaler and purchases drugs directly from manufacturers, bypassing intermediaries to lower the price of more than 100 medications, it said in a statement.
Cuban, who owns the Dallas Mavericks basketball team, said he came up with the idea for MCCPDC while buying heart medicine for his team's injured point guard. "The price was outrageous, and the pharmaceutical company representative told me that they had an 85 percent market share, so their drug could cost twice as much as other generics," he said.
Cuban told CNBC that "the key is to source the medication directly from the majors via license agreements."
"We wanted to be radically transparent with our customers about our costs so they can judge for themselves whether it is fair," he said in the statement.
As such, MCCPDC provides an online list of its drug prices and allows shoppers to compare them against other retailers. It also offers a $5 discount on most orders and free shipping below $150.
Cuban agreed that the average consumer will pay less at MCCPDC than they would at traditional pharmacies or online retailers, "but how much less will depend on both the strength of our negotiating position with each major manufacturer and how many customers we attract to use our service."
In 2019, organizations such as Intermountain Healthcare, Mayo Clinic, Kaiser, and others formed a nonprofit generic pharmaceutical firm called Civica Rx to lower drug costs. This year, Civica Rx will make its debut on the retail pharmacy side.
We'll see how this pans out as MCCPDC and others try to seize market share away from the top retail pharmacy retailers such as CVS Health, Walgreens, Cigna/Express Scripts, OptumRx, Walmart, Kroger, and Rite Aid.