Mark Cuban Launches His Online Cost-Plus Pharmacy, Takes on Big Pharma with Low-Cost Generics

The Mark Cuban Cost Plus Drug Company aims to "disrupt and disable big pharma" by offering more than 100 generic drugs "at striking savings" direct to consumers on a cash-pay basis.

As a pharmaceutical wholesaler, MCCPDC says it can "bypass middlemen and outrageous markups" by simply charging a flat 15% margin and pharmacist fee. With an $11M plant going up now in Deep Ellum, Cuban clearly means business.

Mark Cuban Cost Plus Drug Company Dallas Deep Ellum

Mark Cuban launched his Dallas-based online pharmacy today, aiming to “disrupt and disable big pharma” by offering more than 100 generic drugs “at striking savings” direct to consumers on a cash-pay basis. 

Dallas Innovates first wrote about the Mark Cuban Cost Plus Drug Company (MCCPDC) last October when the venture was announced. Cuban and his co-founder and CEO, Dallas radiologist Alex Oshmyansky, were frustrated by the current system, where companies called pharmacy-benefit managers (PBMs) manage drug benefits for employers, health insurers, Medicare Part D prescription plans, and other payers.

Today they met their first goal, by launching their own “radically transparent” online pharmacy to battle skyrocketing prescription costs.

Bypassing middlemen and “outrageous” markups

As a registered pharmaceutical wholesaler, MCCPDC says it can “bypass middlemen and outrageous markups.” It’s buying its drugs directly from generic drug manufacturers including Amneal Pharmaceuticals.

The pharmacy’s pricing reflects “actual manufacturer prices plus a flat 15% margin and pharmacist fee.” How low can that make your drug prices? Mark Cuban Cost Plus offers three examples:

Imatinib, a leukemia treatment, retails for a staggering $9,657 per month. The lowest price with a common voucher is $120 per month. MCCPDC’s price: $47 per month.

Mesalamine, an ulcerative colitis treatment, retails for $940 per month. The lowest price with a common voucher is $102 per month. MCCPDC’s price: $32.40 per month.

Colchicine, a treatment for gout, retails for $182 per month. The lowest price with a common voucher is $32 per month. MCCPDC’s price is only $8.70 per month.

Alex Oshmyansky, co-founder and CEO of Mark Cuban Cost Plus Drug Company [Photo: Vision Radiology]

‘A problem that can’t be ignored’

“We will do whatever it takes to get affordable pharmaceuticals to patients,” Oshmyansky said in a statement. “The markup on potentially lifesaving drugs that people depend on is a problem that can’t be ignored. It is imperative that we take action and help expand access to these medications for those who need them most.”

Oshmyansky added a personal note when reached by Dallas Innovates today.

“I am a physician and have seen many people hurt due to the cost of the medications they need,” he told us. “It is unconscionable to cause that amount of suffering when it can be avoided.”

Refusing to pay ‘spread prices’ to third-party PBMs

The Mark Cuban Cost Plus pharmacy is a cash-pay venture for good reason. The company refuses to pay “spread prices” to third-party PBMs in order to be allowed to process insurance claims. (It says that’s one reason drug costs have spiked ever higher.) 

By offering its generic drugs directly to consumers on a cash, cost-plus basis, MCCPDC is asking them to forego whatever prescription drug plan their insurance may currently offer. But that can come with a real benefit, the company says: Its model allows patients to “immediately purchase a broad array of medications at prices often less than what most insurance plans’ deductible and copay requirements would total.”

Online pharmacy runs on platform from Truepill

The MCCPDC online pharmacy is built and powered by a digital health platform from Truepill, a digital healthcare company. Cuban’s startup says patients can expect “a seamless, secure e-commerce experience” on the site, with “reliable prescription fulfillment and delivery through Truepill’s nationwide pharmacy footprint.”

Launch comes after MCCPDC established its own PBM

The pharmacy launch comes just weeks after the company established its own PBM operation, Mark Cuban Cost Plus PBM.

Cuban’s PBM aims to sign up companies across the U.S. that provide prescription coverage in their employee benefit plans. MCCPDC has pledged to be “radically transparent” in its own negotiations with drug companies as a PBM, pledging to reveal the true costs it pays for drugs and “eliminating spread pricing and misaligned rebate incentives.”

Why would companies sign up? In a word, savings.

“Our pitch to companies is essentially that they are spending far too much on medications for their employees because of the cost of middlemen in the supply chain,” Oshmyansky told Dallas Innovates. “We can generally save them a lot of money.”

Oshmyansky noted that it generally takes a long time to sell benefit services to big companies.

“But we are now discussing having large companies covering millions of lives as clients,” he said. “It is definitely easier to set up services direct to an individual customer, though.”

MCCPDC says it can save employers ‘millions of dollars’

By eliminating the traditional PBM model, MCCPDC anticipates its PBM could save companies “millions of dollars” with no changes to benefits, depending on the size of the employer.

The company plans to integrate its pharmacy and wholesaler with its PBM. That will enable any company using its PBM to have direct access to wholesale pricing through its online pharmacy.

“There are numerous bad actors in the pharmaceutical supply chain preventing patients from getting affordable medicines,” Oshmyansky said in the statement. “The only way to ensure affordable prices get through is to vertically integrate.”

Mark Cuban Cost Plus Drug Company Plant in Dallas’ Deep Ellum [Rendering: Jacobs]

MCCPDC plant being built in Deep Ellum

Mark Cuban Cost Plus is building an $11 million, 22,000-square-foot plant in Dallas’ Deep Ellum neighborhood to manufacture a number of generic drugs, with plans to open in September 2022. Construction on the facility began in February 2021 with the remodeling and retrofitting of an existing building at 302 S. Walton St., the Dallas Morning News reported at the time.  

“At our manufacturing plant, we’ll be making drugs nobody else is willing to make at needed quantities due to a lack of profit,” Oshmyansky told us. “It will allow us to provide products which are in shortage and which otherwise have extremely high margins from manufacturers.”

He expects the plant to employ around 20 to 25 employees “from day one,” going up to 60 to 80 employees over time.

Dallas-based Jacobs won the contract to provide engineering services for the plant construction. The facility will be registered with the Food and Drug Administration to allow ultimate flexibility for rapid response to drug shortages, Jacobs noted on its website. The plant will support the formulation, filling, and packaging of sterile medicines.

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