The Good, The Bad, and the Missed Opportunity of Mark Cuban Cost Plus Drug Company

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The billionaire’s first venture into pharmacy launched earlier this year.

Ask any group of independent pharmacists their opinion on Mark Cuban Cost Plus Drug Company (MCCPDC), and their views may sway wildly from one end of the spectrum to the other, ranging from an appreciation for the light his adventure is shining on the unfair practices of traditional PBMs to the fear that this will further hurt the shrinking independent pharmacy industry. After speaking with many pharmacy owners and reading tons of comments on Facebook and LinkedIn, here is a roundup of the good, the bad, and the opportunities of billionaire Mark Cuban’s MCCPDC stepping into the online pharmacy space.

What is Mark Cuban Cost Plus Drug Company?

MCCPDC is a transparent, cash-based pricing model for hundreds of prescription products. The company's goal is to dramatically reduce the cost of drugs and, just as important, to introduce transparency to the pricing of medications. Hence, patients know they are getting a fair price.

Here is the MCCPDC pricing model:

  • Cost of the product
  • Plus 15% markup
  • $3.00 labor fee
  • $5.00 shipping fee

It is important to note the MCCPDC is not a pharmacy. They have chosen to partner with TruePill, a mail-order pharmacy and digital health platform. Currently, MCCPDC buys its medication on the open market. In the future, the company plans to leverage a manufacturing plant being built in Dallas, Texas, to produce their own pharmaceuticals at the lowest possible cost.

The Good

Independent pharmacies have been screaming from the rooftops for years about the unfair practices of PBMs—and for a good reason. PBMs continue to represent the biggest threat to our livelihood that this industry faces. Many believe that Mark Cuban, the man, is the perfect mix of investor smarts, business acumen, and celebrity influence to bring a wide range of attention to unfair, unregulated PBM practices. Many independent pharmacy owners believe MCCPDC will bring about a refreshed push for stricter regulations on a national level. While many individual states have passed policy changes in recent years, not much difference in the day-to-day practices of PBMs has been realized.

Other positive aspects include increased patient awareness and personal responsibility for medication choices and costs. When patients truly understand the cost of their therapy, they can make more informed health care choices. Many commenters—especially those outside the industry—see Cuban’s activities as a positive disruptor, breaking out of the status quo. There is a sentiment that our healthcare system is broken, and he is the one taking active steps to try and change it. Even if they don't fully understand the market, they like the shake-up.

The Bad

Although some indepdenent pharmacy owners are grateful for the publicity that MCCPDC is shining on unfair PBM practices, many still worry about the impact that this "shiny" new online pharmacy will have on their business, their patients, and their communities. The promise of steep discounts over "retail prices"—without regard for the services and prices that many independent pharmacies can provide—has many pharmacists hunkering down for another rocky season.

The Missed Opportunity

Many pharmacy owners were disappointed by MCCPDC's partnership with TruePill. It’s not a knock on TruePill itself; the disappointment comes from a nameless, impersonal mail order model. Many of the medications that MCCPDC sells are for chronic conditions. Typically, these patients are on multiple medications. Patients might fill some medicines through MCCPDC, and others through a traditional pharmacy, since MCCPDC won't bill insurance. Their prescriptions are now fragmented, and the dispensing pharmacists don't have the complete picture. MCCPDC could have achieved the best of both worlds if they had chosen to partner with independent pharmacies, providing low-cost, cash-based prescriptions and billing insurance for appropriate medications.

Transparent Misinformation

Another worry from independent pharmacy owners is misinformation. The blanket statement MCCPDC is touting—that they are the transparent pharmacy—implies that all other pharmacies are not. We all know that is not true. In fact, independent pharmacies cannot be transparent under some PBM contracts. Some contract language includes the requirement to bill all prescriptions to the PBM regardless of what is in the patient's best interest. At the same time, others prohibit pharmacies from discussing reimbursement rates with patients.

Higher Fees

Pharmacy owners are also fearful of the impact on their performance scores due to patients filling through MCCPDC or other cost-plus model pharmacies. DIR fees are already at excruciating levels. Patients could be deemed non-compliant by their insurance company if they get their medications filled outside of their insurance network, and the independent pharmacy that fills their insurance-based prescriptions is punished with higher remuneration fees when this happens.

The Opportunities

In this author's opinion, communities are better when they have a thriving independent pharmacy. While MCCPDC has been looked at as ground-breaking, those of us in the industry know that isn't the case. Independent pharmacies have been helping patients save on their prescriptions for decades. Many years ago, I had a program offering a 100-day supply for $18 in my pharmacy, and in my hometown, a friend started a cash-only, generic-only pharmacy in 2006! Newer startups such as Blueberry Pharmacy or ScriptCo have also garnered some media attention recently.

With all the attention on cash-based pricing, there is no better time to showcase your pharmacy's value to the community. Whether you offer low-cost prescriptions, amazing supplements, or unique services, your community is primed to take control of their health, and your pharmacy should be at the forefront of helping them succeed.

Take a quick inventory of all the uniquely special things your pharmacy provides that an online pharmacy can't:

  • What unique prescriptions do you dispense?
  • Who can help with consultations or medication questions?
  • What independent-only OTCs do you carry?
  • How many children have you impacted by sponsoring local sports teams?
  • One-stop shop for all cash-based, insurance, or OTC health needs for your community.

There is a lesson to be learned from MCCPDC and other recent disruptions: You need to be seen and heard. One of the reasons MCCPDC is news is that Mark Cuban’s name is attached to it. He is a celebrity, and celebrity sells. You can be the local celebrity of your community. Do a radio show and morning news tour. Write opinion pieces for your local newspaper. Publish your cash prices compared against the 'other guys.' Make a list of all the products and services you offer that make you stand out and ensure everyone in your community knows about them.

Authors Dr. Lisa Faast and Heather Haro are from DiversifyRx a company committed to helping independent pharmacy owners improve profitability. For any questions or comments, you can reach the authors at info@diversifyrx.com or www.diversifyrx.com.