Mark Cuban’s pharmaceutical company dives into the controversial world of pharmacy benefit management with the launch of a new company tasked with lowering drug prices for its customers.
The company, Mark Cuban Cost Plus PBM, will act as an intermediary to negotiate with drug manufacturers and pharmacies for discounts and rebates on behalf of employers, health insurers and government health programs.
Although PBMs play a vital role in drug pricing, they have come under scrutiny in recent years due to a lack of transparency regarding the amount of discounts and the share of cost savings actually passed on. on their customers.
It’s a story The new Dallas-based Cuban company says it wants to change.
“We have a double result. One is to be profitable because we have to be sustainable as a for-profit entity, ”said Alex Oshmyansky, CEO of Mark Cuban Cost Plus Drugs. “The other is to provide a public health benefit, and we take that very seriously.”
Discounts, which are often calculated as a percentage of the manufacturer’s quoted price, could cause PBMs to favor expensive drugs, thereby increasing drug costs. A 2019 study found that Texas taxpayers could save up to $ 90 million per year if the state fired PBMs handling the benefits of its privatized Medicaid program.
The development of new, smaller PBMs, like Cuban’s, indicates that customers of traditional benefit managers are frustrated with rising drug prices.
The company’s website openly shares this annoyance. “We hate PBMs” is the first post on its homepage, followed by the company’s plan to reinvent the way drug cost negotiators operate.
Mark Cuban Cost Plus PBM will share 100% of the discounts it receives from drugmakers, Oshmyansky said, along with details of its operating costs. The company undertakes to recover only its costs increased by a margin of 15%.
Breaking into the $ 458 billion PBM market will not be easy.
The Big Three PBMs – CVS Caremark from CVS Health Corp., Express Scripts from Cigna Corp. and OptumRx from UnitedHealth Group Inc. – processed 77% of all prescription requests in 2020, according to research from Drug Channels. The top six PBMs processed more than 95%.
Cuba’s new PBM plans to market its products to large employers and public entities through direct outreach. It will start bidding for clients next year before going operational in 2023.
Mark Cuban Cost Plus PBM is just one of several initiatives taken by Mark Cuban Cost Plus Drugs, which was first launched under a different name in 2018 as a generic startup.
“Basically the only way for us to ensure that we are really saving patients money on their drugs is to build a separate and parallel supply chain,” Oshmyansky said.
The company will soon open an online pharmacy that will sell 100 commonly prescribed generic drugs. It will charge customers a 15% mark-up plus a distribution fee of $ 3.
In February, the company requested construction of an $ 11 million, 22,000 square foot manufacturing plant in Deep Ellum, which is expected to be completed next year.
The namesake of Mark Cuban Cost Plus Drugs was deeply involved in the founding of the initiative, Oshmyansky said, although it was just one of many investments by billionaire entrepreneurs.
“He’s super involved. I think people are skeptical when I say that because he’s a famous billionaire, but he’s just very passionate, ”he said. “I think I probably got five or six emails from him today on various ideas and connections. “