Billionaire mogul Mark Cuban has invested in a new business venture that will likely create waves in the healthcare industry. His new company, Cost Plus Drug Company, is attempting to offer affordable life-saving generic medications. The aim is to lower the cost of common medications that people need on a regular basis to keep their healthcare costs lower.
Now, you may not think that Mark Cuban knows anything about healthcare and pharmaceutical drugs and would be better off sticking to sports betting predictions and his Dallas Mavericks, but he is a businessman at heart. But how exactly is he making this venture happen? Let’s dive into the inner workings of how Mark Cuban’s Cost Plus Drug Company will offer lower-priced medications and attempt to lower medication prices across the board.
Cuban’s Goal
From the onset, Cuban’s goal is to offer 100 affordable generic drugs at roughly ten times cheaper than consumers can normally buy them through a pharmacy. He is attempting to achieve these lower prices by cutting out insurance plans and pharmaceutical middlemen who drive the prices of generic drugs way up. This will affect the supply chain of pharmaceutical drugs but in a positive way. These prices may also play an effect on other drugs and their costs as supply and demand will definitely be altered by this new company.
Traditional Supply Chain
The traditional supply chain goes from drug manufacturer to wholesaler to the pharmacy and then to the consumer, but inside of that, third-party negotiators get involved between those steps and help drive up the cost of the drug as it goes. These third-party negotiators also work closely with all the steps of the supply chain as well as the insurance companies to make decisions. These decisions are what drive the price and availability of certain drugs.
Along the supply chain, third-party negotiators help decide and influence how much of a certain drug will be produced and sold to consumers as well as influence what drugs will and won’t be covered by health insurance plans. There tends to be a lot of manipulation and backdoor deals that make the companies of the supply chain wealthy while passing the cost on to consumers.
There is very little transparency that goes on with this and little to no regulation, allowing drug companies, pharmacies, and insurance companies to have a stranglehold on consumers and the prices that they will pay at the counter to obtain the drugs they need to survive and stay healthy.
Cuban’s Supply Chain
Cuban’s supply chain would cut out the third-party negotiators and insurance companies out of the equation, thus lowering the price of drugs. With having drug manufacturing, wholesaling, and the pharmacy all under one roof inside the company, the Cost Plus Drug Company will have complete control overpricing.
Manufacturing costs of generic pharmaceuticals are fairly cheap, but there are other costs that incur during the process. Cuban’s company factors in the manufacturing cost, a $3 pharmacy labor fee, a 15% markup fee, and then $5 for shipping of the drugs. The 15% markup fee might seem steep to some, but a company must be profitable to continue growing. If this venture becomes sustainable, which it appears that it will be, if Cuban is heavily invested in it, more drugs will probably be added to the list of availability.
How To Sign Up
Signing up to get your prescription drugs through Cost Plus Drug Company is pretty simple. Go to their website and create an account. It will show you how to request your prescriptions through your healthcare provider. You will then be able to place your order and your prescriptions will be sent directly to your house via the mail.
Be sure to check out their medications list to check for the generic version of your medication. You will also be able to see the price difference between retail prices and the generic price they offer. For example, then generic medication for Medrol, a popular allergy pill, is $9 on their website versus $49.13 for retail. That’s a savings of $40.13 per month!
If you or someone you know regularly take medications and are looking for possible savings, give Mark Cuban’s Cost Plus Drug Company a try!
