You may have already heard of Mark Cuban’s drug cost plus program at the “Cost Plus Drugs” website, but you may not really understand what it is, so we’re here to tell you all about it. Basically Mark, a billionaire philanthropist (and many other things), got fed up with the pharmaceutical companies jacking up their prices beyond reasonableness, and so started a company where people could get lifesaving drugs at a reasonable price: cost plus. You might, in fact, think of Mark Cuban as the anti-Shkreli.
So just what does “drug cost plus” mean in this context? It means the manufacturer’s cost for the drug, plus shipping, plus $3, plus 15% to cover Cost Plus Drug’s operating expenses. Read on for more details of this.
Explains Cuban, “We started Mark Cuban Cost Plus Drug Company because every American should have access to safe, affordable medicines. If you don’t have insurance or have a high deductible plan, you know that even the most basic medications can cost a fortune. Many people are spending crazy amounts of money each month just to stay healthy. No American should have to suffer or worse – because they can’t afford basic prescription medications.”
Amen.
So how exactly does it work, in terms of pricing?
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Let’s take a real world example. Imatinib is a chemotherapy drug used to treat, among other things, leukemia. According to Mark Cuban’s Cost Plus Drug site, a 30-day supply of 400mg Imatinib retails for a whopping $9,657.40. Now because we weren’t just going to take Mark’s word for it, we went to GoodRX to see at what they had Imatinib priced.
Now of course the lower prices are “after discount”, much like Cuban’s prices are, but look at those retail prices!
Now consider that, according to Cuban, the manufacturer’s price for 30 tablets of Imatinib is less than $40!
Says Cuban (or at least the site), “Most generic drugs are very inexpensive to produce. For example, a 30 count supply of 400mg Imatinib costs just $38.40. We do our best to price our drugs as close to the manufacturer’s price as possible. By cutting out the middlemen, we are able to pass the savings on to you!”
What that looks like is the manufacturer’s cost, plus shipping to you, plus $3 to cover pharmacy labor (“Our pharmacy needs to keep the lights on, too. We pass on the true cost of our pharmacists’ time and materials to you with zero markup. This cost is always $3.00 per drug per order, so you will maximize your savings by ordering the largest quantity possible each time you checkout”), plus 15% to cover operating expenses (“We have a small team working hard to negotiate lower drug prices and add more products to our pharmacy every day. We ask you to pay just 15% more than the manufacturer’s price to support our operations. All other aspects of our price below are passed on to you with zero markup. For a 30 count of 400mg Imatinib, this 15% equals $6.00”).
What this means is that a 30-tablet prescription of 400mg Imatinib will cost you about $47.40, direct to your door. Far less than even the deepest discount available through GoodRX, and orders of magnitude less than retail pharmacies will charge you.
Currently Cost Plus Drugs has a list of a bit over 100 prescription drugs that you can get through them, with varying degrees of savings (some spectacularly substantial, some not as much).
In the Cost Plus Drugs Co. mission statement, Cuban promises that “Every product we sell is priced exactly the same way: our cost plus 15%, plus the pharmacy fee, if any. When you get your medicine from Cost Plus Drug Co., you’ll always know exactly how we arrived at the price you pay. And as we grow and our costs go down, we will always pass those savings on to you!”
Adds Cuban, “We started this company as an effort to disrupt the drug industry and to do our best to end ridiculous drug prices. Thanks for your support, and please let us know what you think!”
You can check out Mark Cuban’s Cost Plus Drugs here.
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