Mark Cuban’s Cost Plus Drug Company and Independent Pharmacies: the Road to Equitable Access to Prescription Drugs

Written by: Lexie Brzoska

Reviewed by: Sai Rachakonda

Design by: Ashna Sai

“No middlemen. No price games. Huge drug savings” (Cuban). Mark Cuban’s Cost Plus Drug Company launched in January 2022 with 100 generic drugs available for order through its website (Brady, 2022). Since then, the company has expanded its inventory to over 800 of the most commonly prescribed generic medications, such as Albendazole and Azithromycin. The business is continuing to grow its supply in an effort to disrupt the drug industry and mitigate erroneous drug prices. The company’s mission is to make essential prescription medications more accessible and increase drug pricing transparency so patients are able to make informed healthcare decisions (Cuban).

For the past decade, Cuban has starred on the television show “Shark Tank” where he and other successful entrepreneurs choose whether to invest in various business opportunities based on pitch presentations. In 2018, however, he received an unexpected email from radiologist Dr. Alex Oshmyansky who “pitched the idea of starting a business dedicated to bringing down the high cost of prescription drugs” (Lovelace, 2022). From there, Cost Plus Drug Company was born and has been a success ever since.

In partnership with TruePill, a mail-order pharmacy and digital health platform, the process of accessing prescription drugs through Cost Plus has been made relatively simple. The customer simply checks the list of medications that are offered through the online pharmacy, obtains a prescription from their doctor, and sends this information to Cost Plus. Although Cost Plus does not take insurance, Oshmyansky states that “in most cases, even without insurance, [their] prices are less than what you would pay when using your insurance at a typical pharmacy.” Customer testimonials have also exemplified how pleased people are with the company’s initiative. Liz, a customer from Dallas, Texas, explained that she and her husband save around 45 dollars per month on medications by filling the generic versions of them through Cost Plus Drugs. John from Norristown, Pennsylvania says that he began using Cost Plus after getting laid off from work, and without insurance or discounts, his 30-day supply of Bupropion was $270. With a GoodRx coupon, CVS pharmacy charged him $75, but through Cost Plus, he paid $18.70 including shipping. By using Cost Plus, John is able to save around $250 a month - money that can now be used to cover other necessary expenses like rent, gas, or groceries (Brady, 2022).

While many professionals in the medical community can acknowledge that Cost Plus has shed light on unfair pharmacy benefit manager (PBM) practices, there are quite a few independent pharmacy owners that point out areas of concern. Those who are speaking up say that although they are appreciative of Cuban’s efforts, they mention how there seems to be a disregard for the services and prices that their independent pharmacies can provide, which is leaving “pharmacists hunkering down for another rocky season.” A suggestion made by these independent pharmacy owners was that Cost Plus “could have achieved the best of both worlds if they had chosen to partner with independent pharmacies, providing low-cost, cash-based prescriptions and billing insurance for appropriate medications” (Faast, 2022). 

While many individuals are used to filling their prescriptions by chain pharmacies such as CVS and Walgreens, it is important to discuss that independent pharmacies have various benefits. First, like other locally-owned businesses, independent pharmacies are able to provide better customer service since they are “not bound to the same bottom lines as corporate pharmacies”. They are typically more focused on their relationships with the patients they serve rather than meeting a quota. According to a study conducted by Consumer Reports, over 50% of patients who filled out prescriptions at an independent pharmacy noted that their pharmacist knew them by name. These personal relationships are harder to build in big-box pharmacies because these businesses are typically not as involved with the surrounding community. Additionally, Consumer Reports also found that independent pharmacies operate more efficiently compared to chain pharmacies. Specifically, independent pharmacies had significantly lower wait times and a greater number of one-on-one consultations. Lastly regarding affordability, as big box pharmacies have the advantage of size and scale, they should be able to offer lower prices in comparison to independent pharmacies. However, another study by Consumer Reports showed that independent pharmacies are, on average, able to offer lower prices on medications than chain pharmacies. Furthermore, while prices vary from pharmacy to pharmacy, independent pharmacies are more willing to have lower profit margins on medications compared to chain pharmaceutical companies (Community Pharmacy, 2021). 

Although independent pharmacies can foster these close pharmacist-patient relationships, some may argue that they are not always the best option if you are looking for convenience. Chain pharmacies such as CVS and Walgreens are widely dispersed across the nation, and they also tend to offer more pick-up and delivery options. Moreover, as a result of independent pharmacies operating on a smaller scale, their hours are typically tighter, meaning they may not stay open as late or as early as chain pharmacies (Community Pharmacy, 2021).

As for how these independent pharmacies benefit healthcare as a whole, they are less likely to experience miscalculations, confuse prescriptions, or wrongly file patient information. The connections they build with patients naturally enable the pharmacy employees to be more conscious and thorough, which potentially saves the business money, addresses patient's health conditions with the right medications, and creates a trusted environment where patients feel comfortable to ask questions about their health prior to consulting their physician, potentially eliminating the need to incur more medical expenses at the doctor's office (RxLocal, 2021). Another important way in which independent pharmacies positively impact the healthcare system is by providing healthcare advice amongst rural populations, where medical expertise is particularly scarce. There are ongoing discussions about how to effectively supply rural communities with proper access to medical care, as healthcare deserts become increasingly common in surrounding areas. Independent pharmacies could be used as a medical intervention of sorts that grants patients access to healthcare advice when they are unable to travel as far as they would need to go to a hospital; this could prevent patients from neglecting medical conditions altogether and consequently worsening them (Munger, 2021).

Along with not partnering with independent pharmacies, some pharmacy experts say that Cuban’s company also does not completely solve a big issue: brand-name drugs. Brand-name drugs cost about 80% to 85% more than generic drugs (Nguyen, 2022). As a result, many Americans are constantly being forced to either cut back on necessary medications or not take them at all (Twenter, 2022). According to the FDA, the active ingredient in the generic medicine is the same as in the brand name drug/innovator drug. The generic medicine has the same strength, dosage form (such as a tablet or an injectable), and route of administration (such as oral or topical). The generic medicine is also manufactured under the same strict standards as and is bioequivalent to the brand-name medicine. This evidence raises questions as to why brand-name drugs then charge such exorbitant prices. The FDA further explains that generic medicines usually cost less than their brand-name counterparts because they do not have to repeat animal and human clinical studies that are required of the brand-name medicines to demonstrate safety and effectiveness. As a result of conducting significantly fewer tests, generic companies are able to sell their product around 30% cheaper, sometimes even reaching price drops of nearly 85%. Even with Cuban’s efforts, one of the main growing concerns patients have regarding the healthcare system is the lack of price ceiling placed on drug companies. This is a major issue since brand-names are the first to design innovative drugs, but they invest in patents that prohibit others from selling generics of the same drug, creating a period of marketing exclusivity which impacts the timing of generic drug approvals (FDA, 2021).

While Cuban’s company may not be perfect, it is a great starting point for increasing prescription drug accessibility. Through this initiative, various social drivers of health are being addressed. First, the business model of having a three dollar pharmacy dispensing fee, five dollar shipping fee, and a 15 percent profit margin with each order allows customers to save around 90% on “ultra-high-cost-drugs” regardless of insurance status - addressing economic stability and access to health services. Saving patients’ money that would have been spent on these higher-priced drugs can now be used towards food security and housing. Moreover, transportation is not required in the process to obtain prescriptions since they are delivered to the customer’s home in all 50 states (Cuban).


Mark Cuban’s Cost Plus Drug Company is trying to tackle the various ways in which drug pricing is inequitable. However, policy interventions are needed to make long-lasting impacts in this industry. For example, the United Kingdom’s Pharmaceutical Price Regulation Scheme (PPRS) uses a value-based pricing mechanism and limits the profits that pharma companies can make from drug sales. South Africa implements capped annual price increases and mandatory generic substitution for branded drugs that goes beyond patent protection. China has a set medicine pricing policy and their hospitals purchase drugs direct from wholesalers (Lo, 2018). Thus, the United States needs to follow suit with similar reforms and implement new drug pricing policies to make a real change.

References

Brady, S. (2022, September 1). Can Mark Cuban's Pharmacy Help You Save On Prescription Drugs? Forbes. Retrieved January 11, 2023, from https://www.forbes.com/advisor/personal-finance/cost-plus-drugs-mark-cuban/

Community Pharmacy. (2021, November 2). Independent Pharmacy vs. Chain Pharmacy: What are the Differences?Community Pharmacy. Retrieved February 13, 2023, from https://communitypharmacy.com/2021/03/independent-pharmacy-vs-chain-pharmacy-what-are-the-differences/ 

Cuban, M. (n.d.). Mission of Mark Cuban Cost Plus Drugs: Mark Cuban Cost Plus Drugs Company. Mission of Mark Cuban Cost Plus Drugs. Retrieved January 11, 2023, from https://costplusdrugs.com/mission/

Faast, L. (2022, February 15). The Good, The Bad, and the Missed Opportunity of Mark Cuban Cost Plus Drug Company. Drug Topics. Retrieved January 11, 2023, from https://www.drugtopics.com/view/the-good-the-bad-and-the-missed-opportunity-of-mark-cuban-cost-plus-drug-company

FDA. (2021, November 1). Generic Drug Facts. U.S. Food and Drug Administration. Retrieved February 13, 2023, from https://www.fda.gov/drugs/generic-drugs/generic-drug-facts#f1 

Lo, C. (2018, February 12). Cost control: drug pricing policies around the world. Pharmaceutical Technology. Retrieved February 13, 2023, from https://www.pharmaceutical-technology.com/features/cost-control-drug-pricing-policies-around-world/

Lovelace, B., Dunn, L., & McFadden, C. (2022, December 20). Mark Cuban's next act on drug costs: Tackling insulin. NBC News. Retrieved January 11, 2023, from https://www.nbcnews.com/health/health-news/mark-cubans-act-drug-costs-tackling-insulin-rcna61807

Munger, M. (2021, July 14). The US Health Care System Needs Independent Pharmacies. Pharmacy Learning Network. Retrieved February 13, 2023, from https://www.hmpgloballearningnetwork.com/site/pln/commentary/us-health-care-system-needs-independent-pharmacies 

Nguyen, J. (2022, February 2). Mark Cuban's Cost Plus Drug Company offers discounted drugs, but can it change the pharmaceutical industry? Marketplace. Retrieved January 11, 2023, from https://www.marketplace.org/2022/02/02/mark-cubans-cost-plus-drug-company-offers-discounted-drugs-but-can-it-change-the-pharmaceutical-industry/ 

RxLocal. (2021, June 4). 10 Reasons To Love Your Local Independent Pharmacy. RxLocal. Retrieved February 12, 2023, from https://www.rxlocal.com/blog/reasons-to-love-your-local-pharmacy 

Twenter, P. (2022, July 28). Critics say Mark Cuban's pharmacy isn't tackling the big issue: brand-name drugs. Becker's Hospital Review. Retrieved January 11, 2023, from https://www.beckershospitalreview.com/pharmacy/critics-say-mark-cuban-s-pharmacy-isn-t-tackling-the-big-issue-brand-name-drugs.html