- Millions of Americans struggle to afford prescription drugs every month because of rising prices.
- Billionaire investor Mark Cuban recently launched a new pharmacy to offer affordable medicines.
- While pharmacies don’t accept insurance and customers have to pay out of pocket, experts say it could make some much-needed medicines more accessible.
High drug prices prevent millions of Americans from accessing life-saving medicines. Now, billionaire investor Mark Cuban is trying to change that with a new transparent dispensary.
Cuban launched an online pharmacy called The Mark Cuban Cost Plus Drugs Company (MCCPDC) on January 19, 2022. As a registered pharmaceutical wholesaler that buys medicines directly from manufacturers, the MCCPDC aims to bypass middlemen “to protect consumers from rising drug prices”.
America’s need for affordable medicines is undeniable. A September 2021 Gallup poll found that 18 million Americans were recently unable to pay for at least one prescription drug for their households due to rising costs. 1 in 10 Americans skip pills to save money.
The MCCPDC aims to address this by reflecting the actual manufacturer price plus a 15% markup and a $3 pharmacist’s fee to provide 100 generic drugs at affordable prices.
Historically, U.S. drug prices have risen by well above 15%.
The MCCPDC launched an initial stockpile of 100 generic life-saving drugs, with more to come. Generic drugs are as safe and effective as brand-name drugs—the only real difference between the two is whether or not they are patented.
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Although the company does not accept insurance and requires customers to pay out-of-pocket, it says its drug costs are lower than most insurance deductible/copay requirements.
Mary Youssef, PharmD, RPh, a mobile IV infusion therapist at HealthIV, told VigorTip that seems to be true, at least in some cases. For example, Yusuf said she encounters a gout medication called colchicine, which retails for about $182 a month, almost daily. Prices at local pharmacies can be as low as $30 per month, but MCCPDC is only $8.70 per month.
Because the cost is so low, it will definitely be cheaper to use MCCPDC than to buy insurance in the long run, she said, but “it all depends on the exact coverage the patient has, what [pharmacy benefit manager] (PBM) to control their coverage, and what the drugs are. “
How does drug pricing generally work?
According to Youssef, third-party PBMs are a largely unrecognized component of pharmaceuticals—and often the reason for their ridiculously high prices.
What is a Pharmacy Benefit Manager (PBM)?
A Pharmacy Benefit Manager (PBM) is a company that manages or processes drug benefit plans for your employer or health plan. They process and pay prescription drug claims and are responsible for creating and updating your health plan’s drug formulary.
“The idea behind PBMs is that they can relieve insurers of the administrative burden and negotiate drug prices with drugmakers,” Youssef said. “From the time they were formed, PBMs were able to negotiate prices through upfront discounts and post-sale rebates. PBMs created formularies — lists of preferred drugs — and insisted on discounts to manufacturers’ drug prices in order to bring them into the formulary.”
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Formularies provide important leverage in negotiating prices with drug manufacturers because insurance companies won’t cover the drug and doctors won’t prescribe it if it’s not included in the formulary. According to Youssef, this allows PBMs to control pharmacy reimbursement, drug prices, drugs approved by each plan, and copays for patients.
However, as far as the new pharmacy in Cuba is concerned, the MCCPDC operates as its own PBM. The pharmacy has vowed to be transparent in its talks with drug companies. The company plans to show the true cost of what it pays for a drug and eliminate practices like spread pricing — charging payers like Medicaid more than they pay for a drug and taking the difference as profit.
“MCCPDC expects its PBM to save companies millions of dollars without changing its benefits, depending on the size of the employer, as it would eliminate the traditional PBM model,” MCCPDC said in a statement. “The company plans to integrate its pharmacies and wholesalers with its PBM, so any company using its PBM can get wholesale pricing through its online pharmacy.”
Taking over these PBMs could result in the PBMs increasing their annual lobbying costs to ensure they retain influence, or trying to join forces with Cuba, due to the wealth of resources Cuba has built, Yusuf said.
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Either way, Yusuf doesn’t believe they’ll give up control anytime soon, “not while they’re in control of the market.”
what does this mean to you
Americans looking to fill their prescriptions without breaking the bank can use MCCPDC to get 100 different generic drugs at affordable prices. You will need to ask your healthcare provider for your prescription to be filled through this pharmacy.
Are these prices available elsewhere?
According to Youssef, the only retailer that even comes close to offering similar drug prices to the MCCPDC is CVS Caremark, as they have their own PBM and chain of pharmacies.
She said CVS Caremark controls how much they can use PBM to pay for their own pharmacy, where patients can prescribe them if they have a Caremark health plan, and what exactly the patient’s copays are.
“Local independent pharmacies, like Metro-Drugs Rx where I work now, have to pay their own costs to retain patients, work back and forth with physicians, offer cheaper alternatives for disease state management, and accept the negatives of these PBMs. reimbursement to maintain our loyalty to the patients we have coached for over 10 years,” she said.
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As such, Yusuf sees the launch of the MCCPDC as a step in the right direction. While she believes the pharmaceutical industry will continue to be profitable, she said there is some hope “that this may undercut the process of PBM’s grip”, often at the expense of patients.
“This will make it easier for the average American to get some much-needed medicines, but some may think that because they have insurance and pay the insurance company, they shouldn’t pay for the medicines they need out of pocket,” Youssef said. . “Older patients who may not be computer savvy or have access to the Internet on a regular basis [may not be] able to use this service. The only way to really know if this will make a difference is to put it into practice and make it available to all patients. ”