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Implications for the Generics Industry:  Mark Cuban’s Cost Plus Drug Company

In January of this year, billionaire investor Mark Cuban launched his latest venture, Cost Plus Drug Company. In partnership with digital healthcare company Truepill, Cost Plus Drug Co. is an online-only compounding pharmacy. This generic drug company aims to offer consumers cheaper alternatives and greater access while introducing transparency to the generics industry. The online pharmacy contains more than 100 generic drugs, at a fraction of the cost. From pricing and access to transparency and competition, Cuban’s Cost Plus Drug Co. is set to disrupt the generics industry as a whole. 

Lower Prices Means Greater Access 

A recent study released in December of 2021 found that, in the past year, 29% of participants reported not taking their prescription medicines due to cost. Cost Plus Drug Co. is set to reduce these financial restrictions on consumers, with its “cost plus” markup model. The company’s pricing includes manufacturing cost, plus 15%, and a $3 pharmacy fee. As a result, a majority of the generic drugs available on the site are cheaper than most insurance deductibles and copays. With its no insurance, online, and cash-only model, Cost Plus Drug Co. provides consumers with novel savings. While the pharmacy only includes generic drugs, it is targeting those on the FDA shortages list and expanding access amongst financially restricted consumers.  

Unprecedented Transparency Boosts Competition 

While introducing transparency into pricing, Cost Plus Drug Co. operates with sustainable and responsible practices. Unlike most pharmacies, Cost Plus maintains honesty in cost savings and rebates. This approach, along with its innovative pricing and accessibility, works to compete with pharmacy giants. It eliminates the pharmacy benefit managers (PBMs) and puts more money toward research and development. The company is not competing on the cost of manufacturing, but rather on cost transparency and direct-to-consumer distribution. For most generics, the cost of pill manufacturing is about 2 cents, which makes Cost Plus super expensive. However, due to the lack of PMBs and other layers of the supply chain, Cost Plus is set to be cheaper. With multiple generic drug manufacturers out there, Cost Plus Drug Co. has the ability to disrupt the market.   

Moving Forward 

As we move into the new year, generic drug shortages continue to wreak havoc on the industry. With new and innovative brands like Cost Plus Drug Co. emerging, consumers are presented with lower prices and greater access. From asthma and heart failure to cancer, Cost Plus provides consumers with their much-needed prescriptions at a fraction of the price. Remaining transparent with pricing and savings, this new company is competing with Big Pharma to meet consumers where they are and present novel generic drug pricing. 

Contributions by Rachel Ruth 

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Tags: Life Sciences Trends, Digital