The Mark Cuban Cost Plus Drugs Company (MCCPDC) plans to offer the leukemia therapy imatinib for $47 per month, for example, compared with $120 or more with a common voucher and a retail price of $9,657 per month.
Other examples of lower-priced generics include the ulcerative colitis treatment mesalamine, which goes for $32.40 per month on the new online pharmacy versus $940 per month retail. In addition, the MCCPDC will offer the gout treatment colchicine at a lower price, charging $8.70, compared with $182 per month retail.
Likely in part because of claims of significant cost savings and in part because of Mr. Cuban’s celebrity status, the new venture is getting widespread media attention. Forbes, NPR, and TMZ have shared the news since the new digital pharmacy was announced earlier this month.
The new venture plans to charge consumers 15% above the manufacturing cost for the generic medications, plus a $3 fee for pharmacists and $5 for shipping. People will still require a prescription from their doctor to get the medications.
Generic pricing and social benefit
The top 100 generic products account for about half of generic sales, and there is enough competition for these high-demand medications that “the prices have come down close to zero,” said William Comanor, PhD, a health economist and professor of health policy and management at the University of California, Los Angeles. The remaining generic agents have lower-volume demand.
One prominent example is Daraprim, a decades-old treatment for the life-threatening parasitic infection toxoplasmosis. The drug jumped into the spotlight in 2015 when Martin Shkreli and his company Vyera Pharmaceuticals bought the rights to make the generic drug and raised the price overnight from $13.50 to $750. In January 2022, a U.S. judge banned Mr. Shkreli from the pharmaceutical industry and ordered him to pay an almost $65 million fine.
Dr. Comanor agreed the price should have been raised – $13.50 “was not economically viable” – but not as steep as $750.
“Say Mark Cuban says he will cut the price from $750 to $300. He will still make money. There is a market for these low-volume products,” he said. “There would also be a social benefit.”
A direct-to-consumer digital pharmacy
MCCPDC is “cutting out the middleman” in two ways. The business model calls for charging consumers out of pocket, so insurance companies are not involved. Also, the company created its own pharmacy business manager firm in October 2021, allowing it to negotiate prices with drugmakers in house.
The company also announced plans to complete construction of a 22,000-square-foot pharmaceutical factory in Dallas by the end of 2022.
Reactions on social media ranged from celebratory to people disappointed their generic medication would not cost significantly less or is not provided by the digital pharmacy.
When weighted by the number of prescriptions, prices for generics have declined in the United States.
“Overall, U.S. generic prices are the lowest in the world,” Dr. Comanor said. “People say U.S. drug prices are the highest in the world. That’s true for branded, but it’s not true for generics.
“So if someone asks if U.S. drug prices are the highest or lowest in the world, the answer is both,” he said.
“Maybe there is a role to play for this new pharmacy,” Dr. Comanor said when asked if the initiative seems like a positive development.
The state of California also announced plans to provide its own generic drugs, he said.
“But you won’t see a lot of entrepreneurs getting into this because the volumes are so low. If Cuban called me, I would tell him to provide Daraprim and similar, low-volume products,” Dr. Comanor said of the billionaire. “He’s a rich guy; maybe he can do it.”
A version of this article first appeared on WebMD.com.