Photo courtesy of Gage Skidmore, Flickr.
On Jan. 19 the pharmaceutical industry was rocked by the announcement that “Shark Tank” star and billionaire Mark Cuban would launch the Mark Cuban Cost Plus Drug Company, an online pharmacy that strives to make generic medications affordable. Upon opening, the company established its commitment to helping others by donating over 10,000 tablets of Albendazole to areas most affected by hookworm.
The website’s mission statement stresses transparency by providing a detailed explanation of how Cost Plus prices drugs. The generic drug price is marked up by 15% to cover costs of running the company and investing in disrupting unfair drug pricing. A $3.00 fee is added for the cost pharmacy partners charge Cost Plus to prepare and provide the prescription. The total is still usually far less than marketplace pricing.
National Public Radio (NPR) investigated how such low prices were possible. Cost Plus established its own pharmacy benefit manager (PBM). PBMs act as the middlemen between health insurers, drugmakers and pharmacies, influencing markups.
Cost Plus doesn’t accept health insurance, but people are still usually paying less than they would at a pharmacy. The company will eventually further lower costs by building a pharmaceutical facility where it can produce its own medicines.
Although Mark Cuban’s name is the one in all of the headlines, the credit is not his alone. The founder and CEO Alexander Oshmyansky is also known for creating Altitude Medical, a startup that aims to increase the sterility of hospitals to prevent the accidental spread of disease. In addition to working on this new Cost Plus project, he continues to practice as an emergency radiologist.
The disparity in credit being given in the media is mostly due to Mark Cuban’s reputation. Anyone would enjoy being known as the knight who slew the greedy American healthcare system. However, I am inclined to believe Cuban might have an additional motivation.
During the 2016 presidential election cycle, Cuban expressed interest in being a candidate’s running mate. He has discussed running in 2020 or 2024, but admitted his family opposed the idea based on the stress it would cause.
While being interviewed on a podcast by “Scoop B” Robinson, Mark Cuban stated that he would not run as a candidate in the 2024 presidential election on a whim. “I would only do it if I thought I was the right person. We’ve got time so there’s a whole lot of other qualified people out there too,” he said.
More recently, Cuban criticized the Biden administration for lacking charisma. "It may be unfortunate that it is even a consideration, but in a social media and sound-bite world where everyone is a performer, someone has to have some charisma that connects to people and overwhelms memes, headlines and soundbites as a source of information," he said, according to News Week.
This company seems like Cuban’s attempt to succeed where he believes Biden is lacking in preparation for running for office in 2024. I currently neither support nor oppose Cuban as a hypothetical candidate, but I will certainly follow headlines to see how he might continue to build a supportive base.
During my research, I realized the idea at the core of Cost Plus is not new. A 2020 episode of “All Things Considered” discussed Californian legislation that could allow the state to develop its own line of reasonably priced generic drugs. This was inspired by a desire to prevent price gouging and reduce shortages after the pandemic highlighted the cracks in the current healthcare system.
There are few updates about the legislation due to its lengthy implementation timeline. According to the National Academy for State Health Policy, the California Health and Human Services Agency “must submit an initial report to the state legislature by July 1, 2022” before further steps are taken.
Although Cost Plus has beaten California to the punch, I am excited to see if more entities, both federal and private, follow this trend of making healthcare more equitable. It’s rare for a wealthy person to change a system they benefit from, and I am disheartened by the possibility that Cuban’s motivations are political instead of charitable. However, any step in the right direction should be celebrated.
dbongiov@ramapo.edu
