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Mark Cuban's Cost Plus Drug Company Could Save Taxpayers Millions

U.S. Government Could Save Taxpayers Between $228 million - $2.15 Billion Yearly

Published: 2023-06-12 - Updated: 2023-06-27
Author: Vanderbilt University Medical Center - Contact: vumc.org
Peer-Reviewed: Yes - Publication Type: Study
Related Papers: Latest Items - Full List

On This Page: Summary - Defining Mark Cuban Cost Plus Drug Company (MCCPDC) - Main Article - About/Author

Synopsis: U.S. government could save taxpayers $228 million - $2.15 billion yearly if insurers who operate its Medicare Part D plans purchased 7 generic oncology drugs at the same prices obtained by the Mark Cuban Cost Plus Drug Company. Founded in January 2022 by Cuban and Alexander Oshmyansky, MCCPDC sells hundreds of generic drugs using a cost+15% pricing strategy, a $3 pharmacy fee, and a $5 maximum shipping cost per 30-day, 60-day or 90-day prescription. Both doctors and patients should be aware of cash-pay options available that might offer lower prices to beneficiaries purchasing outside of their health plans and the impact that this drug price stewardship could have on Medicare and Part D sponsors.

Definition

Mark Cuban Cost Plus Drug Company (MCCPDC)

Mark Cuban Cost Plus Drug Company (MCCPDC), doing business as Cost Plus Drugs, is a public benefit corporation (PBC) with its primary headquarters located in Dallas, Texas. The company is focused on the pharmacy distribution of drugs with a stated goal to lower the prices for generic drugs by removing intermediaries and moving to a cost-plus pricing strategy. As of June 2022, the company has a selection of over 100 generic drugs. The drugs are sold for a price equivalent to the company's cost plus a 15% markup and a $3 pharmacy service fee. The company currently ships to all 50 U.S. States.

Main Digest

"Projected Savings for Generic Oncology Drugs Purchased via Mark Cuban Cost Plus Drug Company Versus in Medicare" - Journal of Clinical Oncology.

The U.S. government could save taxpayers between $228 million - $2.15 billion a year if insurers who operate its Medicare Part D plans purchased seven generic oncology drugs at the same prices obtained by the Mark Cuban Cost Plus Drug Company (MCCPDC), according to a study published in the Journal of Clinical Oncology.

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The Vanderbilt University Medical Center (VUMC) study, led by Ruchika Talwar, MD, a urologic oncology fellow, estimated potential savings by switching to MCCPDC prices with the implication that Medicare, Part D plan sponsors and beneficiaries are likely overpaying for these self-administered generic oncology drugs.

"Both doctors and patients should be aware of cash-pay options available that might offer lower prices to beneficiaries purchasing outside of their health plans and the impact that this drug price stewardship could have on Medicare and Part D sponsors," Talwar said. "These findings are of utmost importance."

It is the second VUMC study in the last year to examine cost savings by purchasing through the MCCPDC. A previous Journal of Urology study led by Talwar estimated that taxpayers could save could save patients $1.29 billion a year based on 2020 Medicare Part D expenditures on just the nine most popular urological drugs.

Founded in January 2022 by Cuban and Alexander Oshmyansky, MCCPDC sells hundreds of generic drugs using a cost+15% pricing strategy, a $3 pharmacy fee, and a $5 maximum shipping cost per 30-day, 60-day or 90-day prescription.

Study authors obtained public formulary data from MCCPDC that identified the seven generic oral oncology drugs offered by the company - abiraterone, anastrozole, imatinib (100 mg and 400 mg), letrozole, methotrexate, raloxifene and tamoxifen - their dosages, and associated prices offered in December 2022, finding a potential savings of $661.8M (78.8%) if median Medicare Part D unit prices were replaced by MCCPDC prices.

Total savings ranged from $228.1M (56.1%) to $2,154.5M (92.4%) when assuming plan prices were equal to the 25th or 75th percentiles of Q3-2022 Part D plan unit prices.

The drug abiraterone (brand name Zytiga) is used in combination with prednisone to treat a certain type of prostate cancer that has spread to other parts of the body. Study authors calculated its median cash-pay price at $562.49, in comparison to a 30-day prescription offered under the MCCPDC model at $44.60.

The median price for the cancer growth blocker imatinib 100 mg (brand name Gleevac) was $442.32 and 400 mg at $1,480.29, as compared to imatinib 400 mg at $44when purchased under the MCCPDC model.

"The MCCPDC is one of several companies that aim to address a real problem for consumers - the costs of generic drugs," said co-author Stacie Dusetzina, PhD, professor of Health Policy. "This study highlights that, in some cases, Part D plans and their pharmacy benefits managers aren't doing a good enough job at getting favorable prices for generic drugs for Medicare and its beneficiaries. In some cases, we find that Medicare beneficiaries would overpay by a lot if they used their Medicare benefit to fill one of these cancer drugs. That shouldn't happen."

Other median cash-pay prices under Q3-2022 Medicare Part D for a 30-day prescription were: anastrozole $11.18, letrozole $12.02, methotrexate $23.75, raloxifene $44.55 and tamoxifen $17.94.

Other cash-pay prices under the MCCPDC model for a 30-day prescription were: anastrozole $10.70, letrozole $10.70, methotrexate $15.80, raloxifene $11.60 and tamoxifen $14.90.

Median savings for each drug using Part D plan unit prices were:

Talwar said she hopes future studies will continue to spread awareness to patients and physicians about MCCPDC, to hopefully ease the burden of financial toxicity and improve access to essential cancer medications.

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Attribution/Source(s):

This peer reviewed study article relating to our Pharmaceutical Information section was selected for publishing by the editors of Disabled World due to its likely interest to our disability community readers. Though the content may have been edited for style, clarity, or length, the article "Mark Cuban's Cost Plus Drug Company Could Save Taxpayers Millions" was originally written by Vanderbilt University Medical Center, and published by Disabled-World.com on 2023-06-12 (Updated: 2023-06-27). Should you require further information or clarification, Vanderbilt University Medical Center can be contacted at vumc.org. Disabled World makes no warranties or representations in connection therewith.

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