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