Mark Cuban’s low-cost pharmacy strikes deals with payers

Billionaire Mark Cuban’s Cost Plus Drugs business, which aims to offer low-cost generic drugs, is steadily gaining traction, signing its first deal with a health insurance company. Capital Blue Cross in Harrisburg, Pa., announced in October that it is partnering with Cost Plus Drugs because the payer is “always looking for ways to control costs for our members and employer groups,” Samir Mistry, Pharm.D., MBA, vice president of pharmaceutical strategy and services for Capital Blue Cross, said in an email.

Capital Blue Cross approached the Cuban company to help provide “another option for people to get affordable medicine,” Mistry said. “We want to increase access and affordability whenever possible.”

Cuban’s business is based on low and transparent prices. A consumer pays the cost of manufacturing the drug, a 15% markup for each drug dispensed by the company, $3 for pharmacy labor and shipping costs.

For example, the Cost Plus Drugs website offers 30, 400-milligram doses of imatinib, a drug used to treat certain types of leukemia and several other types of cancer. Imatinib is available as a generic. The branded version is Gleevec. At Cost Plus Drugs, it costs $39 plus shipping, while other pharmacies may charge upwards of $9,600.

Even on the GoodRx price comparison website, imatinib prices with a coupon range from $115 at Winn-Dixie to over $5,500 at Walmart. “If you have leukemia and you need this drug, thank goodness Mark Cuban did what he did,” says Karen Van Nuys, Ph.D., executive director of the Value of Life Sciences Innovation Project at the Leonard D from the University of Southern California. Schaeffer Center for Health Policy and Economics. In contrast, with some other companies, patients “are treated like piggy banks,” says Van Nuys.

Cost Plus Drugs currently sells approximately 1,000 generic drugs. Mistry said Capital Blue Cross members can still use payer forms for drugs that Cost Plus Drugs doesn’t carry, “or whenever it’s a better option for them,” Mistry said.

Capital Blue Cross is one of the Blues plans that owns Prime Therapeutics, a pharmacy benefits manager (PBM) headquartered in suburban St. Paul, Minnesota. Starting Jan. 1, 2023, Cost Plus Drugs will be integrated with Capital Blue Cross drug benefits through Prime Therapeutics, so members can process prescription claims, Mistry said.

Rightway, a new PBM based in New York, announced this fall that it would add Cost Plus Drugs to its network. With this agreement, Rightway members have access to all medications available through Cost Plus Drugs.

For Capital Blue Cross, the addition of Cost Plus Drugs will help “empower consumers by giving them more choice” about where they fill their prescriptions, Mistry said. By potentially reducing costs for its members, Capital Blue Cross hopes to improve medication adherence. “There have been several studies showing a link between medication affordability and adherence,” Mistry said. A study by Aon found that the average cost to employers paying for employee health care jumps 6.5% in 2023 to $13,800 per employee. For employees, premiums are expected to increase by just 0.6% to $2,520, but payouts will increase by 5.2% to $1,892.

These two partnerships with Cost Plus Drugs could well be the starting point for wider acceptance by Cuban society, says Van Nuys, who expects similar deals to follow. “I don’t think they’ll stop at two. It’s like a snowball.

Susan Ladika is a health and business writer in Tampa, Florida.