At the annual meeting of the Association for Accessible Medicines (Access 2023), Shark Tank’s Mark Cuban explained his dedication to and the inner workings of his online pharmacy that provides generic drugs to patients for significantly lower prices than traditional pharmacies.
At the annual meeting of the Association for Accessible Medicines (Access 2023), billionaire investor Mark Cuban detailed why he chose to develop an online pharmacy that specializes in low-cost medicines and acts as a disruptor to big pharmaceutical wholesale manufacturers.
Cuban is best known as an investor on ABC’s Shark Tank as well as the owner of the Dallas Mavericks. He started his career as an entrepreneur by creating MicroSolutions, a computer consulting service, which he sold in 1990 for $6 million. He announced the launch of his online pharmacy in January 2022.
The pharmacy, known as the Mark Cuban CostPlus Drug Company, is the only one of Cuban’s companies that he has directly attached his name to, which he said shows his determination and commitment to its mission.
“I've never put my name on any other company. And I thought it was important because we were coming out of nowhere. I wanted people to know I was committed to it financially, emotionally, intellectually, and I also wanted patients to know they can trust it—that I wouldn't put my name on it unless I was fully behind it.”
Although Cuban is worth an estimated $4.8 billion, he’s seen firsthand how price gauging on prescription drugs has affected people, sharing the story of a friend who became paralyzed, lost his insurance, and was charged $30,000 for a 3-month supply of draxidopa (Northera). Cuban said that in cases like this and with high-cost biologics, CostPlus is working with manufacturers and talking to them about federal- and state-supported payment programs.
So far, CostPlus only carries generic medications. However, Cuban said that he hasn’t ruled out adding biosimilars to the mix someday.
“We've stopped looking at it from the manufacturers’ perspective, because if you're able to increase the Rx fill rate, you mitigate the risk, which means you can charge less….If we can put together programs that increase that fill rate, not to make more money, patients will pay less, the cost to [companies] will be less, and everybody will benefit. That's where we hope to be on the expensive biologics. And will we get there tomorrow? No, but we'll get there.”
The company functions by working with nontraditional pharmacy benefit managers (PBMs). When a PBM signs up to work with CostPlus, it’s not allowed to do rebates or spread pricing, where a PBM will charge payers more for a prescription than what it will reimburse the pharmacy. Because of this promise, CostPlus is able to foster relationships between manufacturing companies and its partner PBMs.
Cuban said that a main focus of the pharmacy is to expand patient access to medicines, especially during times of nationwide struggle, such as the rise in inflation rates and drug supply shortages. Additionally, he seeks to increase price transparency and trust in the supply chain.
The website for CostPlus aims to make it easy for patients to sign up and contact providers about switching pharmacies. Patients can receive their medications in the mail and can directly see the list prices of the branded drugs and how much they save by switching to the listed generic. Cuban said that the company has not spent any money on advertising because word of mouth is valuable enough.
“We haven't spent a nickel on advertising, and we won't….Imagine if you need a medicine, you're telling everybody. You're telling your doctor, you're on online forums, you're speaking to everybody that you know that has the same ailment that you have. That's our marketing.”
When asked about why sometimes patients’ filled medications come in different colors or packaging, Cuban said that it was because manufacturers could change over time. However, he noted that feedback has shown that the change in generics has not posed an issue, which he attributed to CostPlus’ commitment to instilling trust with its patients.
Cuban explained that CostPlus’ biggest barriers are being new and companies being scared to work with PBMs.
“It took some time for people to think, ‘OK, it's just the Shark Tank guy. He's just messing around with this.’ And now, people are starting to realize we're real. Hopefully, by the end of this week, we'll have 2 million accounts set up….So, we're just going to keep on seeing where it takes us. I have this saying, when you run with the elephants, there's the quick and the dead. And so, we have to be quick. I don't think we've impacted anybody else's business in a big way, but we'll get there.”