episode 50: Shark Tank for Your Health
Heads up, there's a lot of swears in this one. Well-justified swears, we think, but if you have younger listeners nearby, you might want to put on your headphones.
Just this past week, billionaire Mark Cuban launched a new healthcare service called - because he’s a megalomaniac - the Mark Cuban Cost Plus Drug Company. The company claims to sell prescription drugs at more affordable prices. We claim that Mark Cuban is a full-on asshole. (Told you there'd be swears.) The site touts that all drugs sold through the service are offered at manufacturers’ cost with a 15% markup. But is it for real? Let’s break down what Mark Cuban is trying to do here – including whether this really is a viable solution for rising drug costs.
Show Notes
Mark Cuban, for those who don't know, is known for owning the Dallas Mavericks, selling early 90s internet provider Compuserve, and being the jerk on Shark Tank.
Mark is creating the Mark Cuban Cost Plus Drug Company with the goal of "saving America from high prescription drug prices." The company itself is a Pharmacy Benefits Manager (or PBM). ** Pharma Bullshit Mountain*** PBMs work directly with health insurers, drugmakers, and pharmacies to manage drug benefits and the cost of prescription medicine. CVS's Caremark is the largest PBM.
The MCCPDC currently has around 100 generic versions of popular drugs on its site for sale. Examples:
Imtanib, a leukemia treatment drug: Typically retails at $9,500+ a month, on the site it’s available for $47 a month. Metformin, a diabetes drug, sells for $3.90 a month versus the typical $20.
The MCCPD claims that it’s biggest benefit is its commitment to transparency and avoiding “middle men”; with every drug for sale, the company lists what drives the cost – from manufacturer price to pharmacy labor markups.
One big caveat: the company only accepts cash payments, not insurance. If you're uninsured, this may end up being a decent option, but not everyone is cash flush – especially if you’re a minimum wage earner. If you are a person with insurance who is struggling with high prescription drug costs, this won't help you.
More important context: they are only selling generic drugs. That was less than 11% of prescription drug spending in 2020. If you're struggling to afford a brand name drug, this won't help you either.
If we had to predict, this effort will probably be most beneficial to Mark Cuban, not patients.
Probably the long game: Eventually, they want to be making the drugs themselves, and then charging whatever they want.
This sounds a lot like GoodRX? Is it the same thing? For those lucky enough not to know what GoodRX is: GoodRX is a service when you have no other options to get your prescription. GoodRX provides discounts for prescriptions, but you can't use your insurance.
So they're similar in that these are both services for the uninsured - or people who are insured but aren’t getting their drug covered by insurance. So a pretty small percentage of the population.
The difference is that you can ONLY use GoodRX at in-person pharmacies, whereas Mark Cuban’s service is ONLY for mail order. Mail order will always be cheaper since you’re not paying for the pharmacy’s overhead.
The other difference is that GoodRX lets you shop the prices of multiple PBMs at any pharmacy - so for example, Caremark might have a lower price at a CVS since they’re OWNED BY CVS, while Express Scripts might have a better price at a Walgreens.
GoodRX launched itself as a publicly traded com...