Mark Cuban desires to begin 2023 driving the momentum he is developed as the chief disruptor of the pharmaceutical business.
In one yr the 64-year-old tech entrepreneur has managed to do what Warren Buffett, Jeff Bezos and Jamie Dimon couldn’t do by uniting their names, their affect and the facility of their respective firms: sharply scale back the costs of prescribed drugs within the U.S.
To do that, Cuban, the proprietor of the NBA’s Dallas Mavericks, co-founded the on-line pharmacy CostPlus Drug.
And if anybody questions how significantly Cuban takes this cost-reduction effort, which many observers take into account subsequent to not possible, take into account this: The firm’s official title is Mark Cuban CostPlus Drug Co.
“It’s the only company I have ever put my name on,” the billionaire instructed TheAvenue in October. “I wanted drug manufacturers, providers, patients to know that I truly care and am committed to making this work.”
Cuban Leverages Word of Mouth for ‘Big Impact’
Thanks to Cuban’s vitality, the web pharmacy had a breakthrough in 2022, making the most of phrase of mouth on social networks and urging shoppers to decide on Cost Plus when the costs of the prescribed drugs they want preserve rising.
“Thanks @costplusdrugs a 90 day supply of my medication with expedited shipping was 1/4 of what the pharmacy wanted for 1 month supply with a discount card!” wrote one Twitter person on December 30. “Get your meds from Mark Cuban’s http://Costplusdrugs.com and save money ????”
Another Twitter person could not consider the value disparity between common pharmacies and Mark Cuban CostPlus Drug.
“@costplusdrugs I cannot thank you enough for this service. My scrip is normally $440 for 90 days. Your price is $40. ❤️,” stated the person.
TheAvenue cannot confirm the figures the tweets describe, however testimonials of this kind have been swarming on social networks for a number of months.
“Our goal isn’t to make a lot of money or sell the company,” Cuban instructed TheAvenue, by way of e mail on Jan. 3.
“Our mission is to be the low-cost provider of every medication we are allowed to sell. That’s not typical. We are a PBC. We aren’t looking for a big exit. We are looking for a big impact.”
PBC stands for Pursuit of Corporate Good, which signifies that administrators of Mark Cuban CostPlus Drug are required to think about a spread of things, not simply stockholder worth, after they make company choices.
Transparency is vital to the technique. CostPlus fills and delivers prescriptions at value plus a set 15% margin. “We show our cost, we show our 15% markup. We price on a cost-plus basis that users get to see,” Cuban stated.
Cuban is ready to present these costs as a result of there is not any distributor within the center. CostPlus bypasses well being insurers and negotiates instantly with drugmakers.
Ambition: ‘Push Pricing Down, Add Branded Drugs’
The firm is gaining prominence and is getting an increasing number of bold. Cuban tells TheAvenue that this yr some key aims of his on-line pharmacy is to decrease drug costs even additional and broaden its buyer base and drug choices.
“Add branded drugs. Push pricing down lower. Expand our reach to millions more patients,” the billionaire stated, setting bold targets that clearly ship a message to the present drugstore leaders, CVS Health (CVS) – Get Free Report and Walgreens Boots Alliance (WBA) – Get Free Report.
Cost Plus is promoting a 30-count provide of 100mg imatinib, which treats leukemia and different sorts of most cancers, at $14.40. A affected person saves greater than 98% from the retail value at different firms, $2,502.50. Imatinib is the generic model of Novartis’s (NVS) – Get Free Report Gleevec.
The on-line pharmacy has generic therapies for nearly 70 illnesses and well being points. Treatments accessible at Cost Plus embody medicine for bronchial asthma, breast most cancers, alcohol dependancy, diabetes, opioid dependancy, psychological well being, dental care, coronary heart failure, contraception and extra.
If Cuban achieves his aims, Cost Plus ought to develop into an actual risk to conventional distributors, forcing them to react so as to not lose important market share.
The billionaire is satisfied the wind is at his again. “People want to save money on their medications,” he stated. “That will drive out growth.”
He urges shoppers to ship him the names of medication which have outsized costs so he can attempt to discover a method to provide them and undercut the market costs.
“If there is a generic that you can not afford, or that is charged for hundreds or thousands of dollars to your employer’s insurance, please reply with the name and we will see if we can source it,” he wrote on Twitter in November.
Cuban Is Not Seeking New Investors in Cost Plus
The star of the hit TV present “Shark Tank” based the corporate in January 2022 with a associate, Alexander Oshmyansky.
Cuban doesn’t, at the very least for now, plan to open the capital of the web pharmacy to different traders. TheAvenue requested him whether or not he deliberate to usher in new shareholders this yr, and he stated: “Not at this time.”
Cuban’s pharmaceutical revolution has been hailed by research together with one from Harvard University.
“In 2020 alone, Medicare could have spent $3.6 billion less on generic acid-reflux, cancer and other drugs if purchased through Cost Plus Drug Co., a new online pharmacy backed by Mark Cuban,” a examine from Harvard Medical School researchers discovered.
The firm’s enterprise mannequin may profit well being insurers, together with Medicare, which spent an estimated $115.6 billion on pharmaceuticals final yr, or almost a 3rd of complete U.S. drug spending, the examine added.