Susan Ladika

Billionaire Mark Cuban’s Cost Plus Drugs venture, which is aimed at offering low-priced generic drugs, is gradually gaining traction, signing its first agreement with a health insurance company. Capital Blue Cross in Harrisburg, Pennsylvania, announced in October that it was teaming up 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 pharmacy strategy and services at Capital Blue Cross, said in an email.

Capital Blue Cross approached Cuban’s company to help provide “another option for people to obtain affordable medications,” Mistry said. “We want to increase access and affordability whenever and wherever possible.”

Cuban’s venture is based on low, transparent pricing. A consumer pays for the cost of manufacturing the drug, a 15% markup for each drug the company dispenses, $3 for pharmacy labor, and the cost of shipping.

For example, Cost Plus Drugs’ website features 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 brand-name version is Gleevec. At Cost Plus Drugs, it costs $39 plus shipping, whereas other pharmacies may charge more than $9,600.

Even on the price comparison website GoodRx, prices for imatinib 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 has done what he’s done,” says Karen Van Nuys, Ph.D., executive director of the Value of Life Sciences Innovation Project at the University of Southern California’s Leonard D. Schaeffer Center for Health Policy and Economics. In contrast, with some other companies, patients “are treated like piggy banks,” Van Nuys says.

Cost Plus Drugs now sells about 1,000 generic drugs. Mistry said Capital Blue Cross members can still use the payer’s formularies for drugs that Cost Plus Drugs doesn’t carry, “or whenever doing so is a better option for them,” Mistry said.

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

Rightway, a new PBM based in New York, announced this fall that it will add Cost Plus Drugs to its network. With that 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 with “empowering consumers by giving them more choices” as to where they fill prescriptions, Mistry said. By potentially reducing costs for its members, Capital Blue Cross hopes it will improve medication adherence. “There have been multiple studies showing a link between medication affordability and adherence,” Mistry said. A study by Aon found that the average cost for employers who pay for their employees’ healthcare is jumping 6.5% in 2023 to $13,800 per employee. For employees, premiums are projected to rise just 0.6% to $2,520, but out-of-pocket costs will climb 5.2% to reach $1,892.

These two partnerships with Cost Plus Drugs might just be the starting point for wider acceptance of Cuban’s company, says Van Nuys, who expects similar deals to follow. “I don’t think they will stop at two. This is like a snowball.”

This article originally appeared on Managed Healthcare Executive.

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Mark Cuban’s Cost Plus Drugs business has entered into agreements with Capital Blue Cross and Rightway.

Cost Plus Drugs Making Deals with Payers

Drug-related deaths are soaring among older Americans, driven by factors including unintentional misuse of prescription medications, self-medicating to treat pain, recreational drug use and social isolation.

In just a decade, the drug-related death rate doubled for those 65 years and older, climbing from 4.2 deaths per 100,000 in 2008-2010, to 8.4 deaths per 100,000 in 2018-2020, according to a report on senior health by United Health Foundation, which is part of UnitedHealth Group, earlier this year. The report drew on statistics from the Centers for Disease Control and Prevention. “It’s a really sad finding,” says Rhonda Randall, D.O., chief medical officer at UnitedHealthcare. “There’s a misperception that seniors may be exempt from this problem.”

While drug-related deaths increased across all age groups during the period the researchers studied, deaths among seniors increased the fastest, Randall says. Most of the deaths in the United Health Foundation study involved opioids, particularly synthetic fentanyl, she says.

A study focused solely on opioid deaths among older adults conducted by experts from Northwestern University’s Feinberg School of Medicine saw a similar surge in deaths. Findings from that study reported in 

 earlier this year showed opioid overdose deaths among those 55 years and older increased tenfold between 1999 and 2019.

The United Health Foundation report found that for those 65 years and older, men experienced drug-related deaths at twice the rate of women. For older men, the death rate was 11.7 per 100,000 population, compared with 5.8 for women. For African American adults 65 years and older, the death rate was almost 20 per 100,000 population.

Experts don’t know exactly why drug-related deaths are increasing; Randall says it is likely a combination of factors. People who are older are more likely to take prescription medications for chronic conditions, and they may inadvertently misuse medications such as opioids. Misusing medications is especially risky for older people because with age, the ability to metabolize medications decreases. Anxiety, depression and social isolation affect seniors, all of which have been exacerbated by the COVID-19 pandemic. Maryann Mason, Ph.D., an associate professor of emergency medicine at Northwestern and lead author of the 

 paper, says older Americans who are underserved by the healthcare system may “turn to unregulated drugs to self-medicate illnesses that emerge with age.” Another factor: Baby boomers are flooding the senior age brackets, and they were more likely to use illicit drugs when they were young than other generations.

It’s important for primary care providers to take the time to screen their older patients for prescription and recreational drug usage, Mason says. They also should devote time to educating patients about the possible dangers of drug use, in Mason’s view. She says that organizations that focus on substance abuse should reach out to older Americans in nonmedical settings such as senior housing complexes and community centers.

It’s also imperative for healthcare providers to be aware that opioid use disorder is an increasingly common problem among older patients, experts say. Providers can monitor their patients’ prescriptions or recommend alternative treatments for chronic pain, such as getting care from a chiropractor or acupuncturist. “Preventing this from the start is important,” Randall says.

Two reports show that drug-related deaths are skyrocketing among people 65 years and older.

Drug-related Deaths in Older Adults on the Rise

Tired of grappling with the rising costs and poor quality of healthcare, a coalition of major healthcare purchasers is taking things into its own hands, establishing a company that is designing healthcare products to meet its members’ needs. “There’s an incredibly high frustration level among buyers of healthcare,” says Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health (PBGH) in San Francisco.

The nonprofit PBGH represents almost 40 large private employers and public entities that together spend $100 billion each year on healthcare services for more than 15 million Americans and their families. PBGH members include Microsoft, Walmart and American Airlines.

The decision to create the company, Emsana Health, was made about two years ago, with the initial focus on “really understanding the needs on a deep level,” Mitchell says. The company officially launched in the fall, and its first venture is setting up a pharmacy benefit manager (PBM), EmsanaRx, which went started operating on Jan. 1.

EmsanaRx CEO Greg Baker says the PBM is different from its competitors because it was designed to answer to its group members. One of its objectives is to provide members with sound, actionable data, such as what drugs actually cost, as well as information on discounts and administrative fees, Baker says. Companies that use EmsanaRx will pay a fixed price per prescription and a fixed fee to EmsanaRx.

“We do hear the traditional PBMs talk about doing the right thing for their clients, being that a counterweight to the manufacturer, being that intermediary that America needs,” says Baker. “I guess I just fundamentally disagree with that.” Baker says PBMs may be passing on rebates to their clients, but they also charge a variety of fees: “Now I have got a formulary placement fee and a clinical management fee and price protection fees, and those fees do not benefit the employer. Those fees all go back to the PBM.”

Baker says the traditional PBMs often use long, complex contracts that are difficult for clients to understand. EmsanaRx will use simple-language, eight-page contracts, he says, and data will be shared in a way that clients can understand. The account managers will be clinical pharmacists.

EmsanaRx is operating as a for-profit company with shares owned owned primarily by PBGH and its members. There are also some outside investors. Baker, who wouldn’t disclose their identities, describes them as well-funded individuals looking to bring innovation to healthcare. He says there isn’t pressure on the nascent PBM to generate major profits and describes a three-year plan that involves serving the first clients this year, some PBGH members in 2023, and ramping up to becoming a full-fledged PBM in 2024.

“We’ll try to nudge this PBM industry into a better place. But it is really, ‘let’s start slow, let’s be deliberate, let’s do it right’ because I don’t have investors breathing down my neck saying, ‘We need profit today.’”

EmsanaRx, a pharmacy benefit manager launched by the Purchaser Business Group on Health, started operations in January.