Shark Tank investor Mark Cuban took to Twitter (TWTR) early on a Friday morning to break down exactly why medication prices have gotten so painfully pricey. The superstar business mogul says that "there are two key reasons for high drug costs."
"The first is that drug manufacturers price to value, rather than cost," he explains. "Meaning, they price based on the rate they believe they can charge and the number of customers who will pay that price." He goes on to explain how drugs for rarer conditions can be priced much higher just because they're in demand.
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In a continuing thread, he adds that "this is a function of middlemen helping to set prices rather than the ultimate buyer of the meds. When the patient, government, [and] business can remove intermediaries, prices can be set to meet the needs of the seller and patients[.]"
Of course, commenters were quick to point out a handful of additional theories as to why medications are so expensive. For instance, some believe that the FDA's efforts to increase generic drug competition could be increased. Others suggested that insurance companies were to blame.
But for Cuban, it's wise to focus on the middle man -- a role his venture, Cost Plus Drug Company, prides itself on eliminating. The company offers low-cost, transparently-priced medications purchased directly from manufacturers and, as of 2022, accessed through its online pharmacy.
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