For those who don’t know, Mark Cuban recently co-founded an online pharmacy, focused on getting generic drugs to people are prices vastly cheaper than prices people are seeing at retail.
Name is costplusdrugs .com.
Some examples of deals offered from their website.
Abacavir
Retail-$1,096
Their price-$57.60
Bupropion
Retail-$67.52
Their price-$4.80
Naproxen
Retail-$16.64
Their price-$4.50
Hundreds if not thousands of examples exist like this, where the company is offering cheaper generic drug options at prices which in some cases are under 10% what the market is charging.
The company also isn’t a non profit and has a 15% profit margin on all products sold to consumers.
That all being said though, is this actually a big deal?
14% of the total cost of US healthcare is pharma products.
The big thing though is generic drugs are the majority of this market already.
88.5% of prescriptions filled in the US are generics.
8% are branded.
3.5% are branded generics. Sort of an oxymoron, but that’s the official term.
Which that’s a huge change from a decade ago, where name brand drugs held 23% market share and generics were at 70%.
This does bring up a valuable point on why people still buy generics in the first place.
Simple reason?
The people buying them have the money.
Cadillac healthcare plans
$200,000+ income households
There’s also the fact some branded drugs don’t cost that much more over generics.
The industry average is generics cost 80-85% less than branded drugs, but that isn’t every single brand, where some brands can be more price competitive with generics.
So why did Mark Cuban do this if it may not really be a big deal?
- It will still help some people
The US has 81,000 people employed as pharma reps, where that industry is notorious for giving doctors very bad information and often times using pretty corrupt methods to get them prescribing certain pills.
The press Mark Cuban has gotten is more than any company I can name doing this by far and can probably teach some consumers they have options and not break the bank as often on pharma products. - Extremely good PR on a low cost venture.
Mark Cuban is just buying pharma products directly from generic manufacturers, putting them on a website and adding a 15% markup.
The actual startup costs to this business are very low, but the way it changes public perception for the guy is insane.
In 2016, I contacted Cuban just through his public gmail about the idea of him running for president on the libertarian ticket, saying it’d be fast ballot access and I’d give like a 70% chance at it.
Shockingly he replied and had an email convo for about 3 days about it, which went for call it 20 emails. Entire reason I contacted was him saying he’d be interested in an interview and he said I could disclose the emails to people.
About 1-2 weeks later, my old roommate called me up saying Mark Cuban was on TV saying he was pitched to run via email as a third party, but said no.
Since that point though, he has brought up the idea at least once a year and after Trump won, Cuban wore a 46 jersey to a Mavericks game, to show how he could win.
I don’t think he will ever actually run, but I think he likes the idea and enjoys people asking him to.
The PR he’s gotten from this venture likely makes him feel good and feel if he ran, he’d have some sort of a shot.
Final thoughts on this.
Do I think this changes anything in healthcare?
88% of prescriptions filled are already for generics.
Only 8% are branded and that’s largely due to lack of caring from those consumers.
I don’t think this changes much, but I’m sure a handful of people will now due to the press know they have another option over what a doctor had an pharma rep push on him.