You’ve lost count of how many times patients ended up back at the hospital because they couldn’t afford their medications. You’ve seen how desperate some can get and cringe when you hear that your patients buy medications from foreign countries, risking quality and safety. But you have no answers for them. This is where companies like Mark Cuban’s online discount pharmacy, Cost Plus Drugs, come in.
What is Cost Plus Drugs, and how is it different?
Traditionally, pharmacy benefit managers (PBMs) negotiate drug prices with the manufacturers on behalf of insurance companies, resulting in discounts and rebates for the PBMs. The problem is no one knows how much of those savings actually make it to patients.
So what happens when you cut out the middleman?
That’s the goal of the Mark Cuban Cost Plus Drug Company (MCCPDC), more widely known as simply Cost Plus Drugs, which the billionaire launched in January 2022. It provides high-quality and affordable generic medications with price transparency, and it negotiates prices directly with the manufacturer. Then, it adds a 15% mark-up and $5 pharmacy labor fee for each prescription (with a $5 shipping fee per order), passing the rest of the savings onto the patients.
Even though Cost Plus Drugs now offers more than 1,000 generic drug products, critics say the brand-name medications are what patients struggle to afford the most. Luckily, Cost Plus Drugs seems to be pushing to add those options as well. In April 2023, the company announced it will now carry 3 brand-name medications: Invokana, Invokamet, and Invokamet XR. According to the Cost Plus Drugs and GoodRx sites, patients using Cost Plus Drugs for these medications may save 60 to 80% on the cash price.
Part of affordability is also accessibility. Cost Plus Drugs is aiming to begin manufacturing drugs by the end of 2023. The company wants to manufacture drugs on shortage and partner with hospital systems. This way, buyers like hospitals may purchase products directly from them to increase availability and eliminate price gouging.
While this seems like a win-win for both hospitals and patients, Cost Plus Drugs is still a business that needs to be sustained. And no business is without competition.
How does Cost Plus Drugs compare to Amazon’s RxPass?
Just over 2 years after launching its pharmacy services, Amazon started its prescription savings program, RxPass, which is only available to Prime members. For an additional $5 per month, members can receive more than 50 generic medications for free.
Both RxPass and Cost Plus Drugs are fighting for access to affordable and quality medications, but there are some differences between the two companies:
Amazon RxPass | Cost Plus Drugs |
|---|---|
Just over 50 generic drugs | Over 1,000 generic drug products and 3 brand names |
$5 per month for Prime members (regardless of if a medication is filled or not) | Cost of med + 15% + $5 pharmacy labor fee |
Free shipping | $5/order for shipping |
Excludes Medicare and Medicaid patients | Medicare and Medicaid patients eligible |
Not available in 5 states | Available in all 50 states |
In-house pharmacy | Third-party pharmacy |
Does not manufacture | Hoping to manufacture by the end of 2023 |
*Both companies seem to offer a solution for different types of patients, so looking at them as direct competitors is difficult. Additionally, it’s going to take more of these companies to actually see a shift in drug pricing across the market.
What other companies are trying to disrupt drug pricing?
Business models like Cost Plus Drugs and RxPass continue to pop up on both large and small scales:
- DiRx works similarly to Cost Plus Drugs by skipping the middleman and negotiating directly with the manufacturer. You can pay by prescription or sign up for their Annual Savings Plan.
- CivicaScript currently manufactures the prostate cancer drug abiraterone 250 mg tab and sells it to trusted PBMs or pharmacies who will pass on the savings to patients. Patients are paying less than 10% of the cash price set at other companies.
- Walmart partnered with 2 manufacturers to provide lower cash price insulin through Walmart’s private brand ReliOn.
What does this mean for hospital pharmacies?
These new pharmacy business models may give patients better access to vital drugs that can decrease readmission rates, prevent delayed discharges, and improve overall patient health. The impact is only going to improve as Cost Plus Drugs expands its list of brand-name medications.
Down the line, once Cost Plus Drugs can start manufacturing drugs, it may help mitigate the drug shortages and price gouging that hospitals continually face. Ultimately, Cost Plus Drugs could be another resource for you to make it easier to provide exceptional patient care and transition patients’ home.
