Mark Cuban isn’t solely on a mission to lower the price of popular prescription medications you might purchase from your favorite pharmacy. The billionaire entrepreneur and cofounder of the Mark Cuban Cost Plus Drug Co. wants to make so-called specialty drugs more accessible too.
The Shark Tank alum discussed his disruption of the “opaque” pharmaceutical industry during last night’s Fortune Brainstorm Tech dinner at CES in Las Vegas. Cuban directed much of his ire at pharmacy benefit managers (PBMs), third-party intermediaries between drug manufacturers and health insurance providers that he’s accused of price-gouging at patients’ expense. At dinner, he told Fortune’s Andrew Nusca that PBMs’ industry takeover extends to specialty pharmacies.
“[PBMs] invent all these special categories,” Cuban said. “For most of the drugs in specialty pharmacy, including generics, there’s nothing special about them. They’re just pills.”
Perhaps your experience with specialty pharmacies has been like mine—I’d never heard of them until a few years ago, when I needed a medication that could only be procured through one. My doctor didn’t so much write me a prescription as pen a letter to my health insurance company, arguing my need for the drug ahead of surgery. He told me he was prepared for his plea for preauthorization to be rejected, as had happened with other patients. I was lucky, though; I required the meds for only six months, and my insurance approved it the first time around.
Specialty drugs, according to the National Association of Specialty Pharmacy (NASP), are “more complex than most prescription medications and are used to treat patients with serious and often life-threatening conditions including cancer, hepatitis C, rheumatoid arthritis, HIV/AIDS, multiple sclerosis, cystic fibrosis, organ transplantation, human growth hormone deficiencies, hemophilia, and other bleeding disorders. These medications may be taken orally but often must be injected or infused and may have special administration, storage, and delivery requirements.”
A decade ago, the Congressional Research Service identified specialty drugs as one of the fastest-growing areas of health care spending and said such meds accounted for one-third of prescription drug spending. They represented half of all drug spending in 2021, according to the Office of Science and Data Policy. NASP says it recognizes specialty pharmacies’ duty to “support patients who are facing reimbursement challenges for these highly needed but also frequently costly medications.” But to Cuban, not enough is being done to lower the cost of specialty drugs to begin with.
Cost Plus Drugs, which is weeks away from its third anniversary, offers common prescription medications at low costs, plus a 15% markup, and prides itself on transparent pricing. That includes some specialty drugs, Cuban told Nusca.
“A drug like imatinib (an oral medication used to treat certain types of leukemia, other cancers, and blood disorders), before we got in the business, they would charge $2,000 for a 30-day supply,” he said. “We came in, cost plus 15%, now it’s about $21.”
As of Jan. 7, Cost Plus Drugs listed 30-day supplies of imatinib, generic for Gleevec by Novartis, as $13.18 for 100-milligram tablets, a savings of $2,489.42, and $34.50 for 400-milligram tablets, a savings of $9,622.80. What specialty medications the company doesn’t sell, it’s working to get, Cuban says. He used the plight of a friend as an example.
“I had a friend from college who was in this horrific car accident, and a mutual friend of ours emailed me last year,” Cuban said. “He said, ‘Look, Landon…lost his insurance and he needs this drug, droxidopa. And they’re gonna charge him $10,000 every three months. Can you guys get this, ’cause I didn’t see it on your list.’
“We checked into it, we got it. Instead of $10,000 every three months, it was $180 every three months. And now we’ve got it down to about $90 every three months.”
Cost Plus Drugs listed 90-day supplies of droxidopa, generic for Northera by Lundbeck, as $32.28 for 100-milligram capsules, a savings of $1,419.42, and $75.93 for 300-milligram capsules, a savings of $7,967.37, as of Jan. 7. Costs were unavailable for the 200-mg capsules, which were out of stock.
Cuban said of the chasm between his and others’ specialty drug prices, “You’ve got an industry where it’s just a mess.”
For more on the Mark Cuban Cost Plus Drug Co.:
- Mark Cuban’s $141K mistake: The Cost Plus Drugs cofounder says CEOs don’t understand health care coverage, and it’s costing them big
- Mark Cuban: “There’s nobody who looks at the health care system or the pharmaceutical industry and says ‘wow, that’s well run’”
- Mark Cuban’s Cost Plus Drugs to begin manufacturing its own medications
- A doctor says a patient saved over $1,000 a month by ordering prescriptions through Mark Cuban’s online pharmacy
- Mark Cuban has been taking on the drug industry. But which one?
