Cost Plus Drugs: Key Updates from H1 ‘23
Mark Cuban’s Cost Plus Drug company is moving so fast that I’m struggling to keep up.
I last covered Cost Plus Drugs in January when I recapped the progress the company made in 2022. I was planning on waiting a year to do another recap, but for the sake of you and me, I need to do a mid-year recap. Cost Plus Drugs is an exciting company to be following.
In this article, I’ll quickly highlight what Cost Plus Drugs accomplished in 2022, catch you up to speed with the progress they’ve made so far this year, and why a partnership with CMS or the VA is needed.
A Quick 2022 Recap of Cost Plus Drugs
In its first year (2022), Cost Plus Drugs experienced rapid growth, surpassing $25 million in sales and acquiring 1 million customers within nine months. Much of this growth was driven by word-of-mouth referrals, aided by Mark Cuban’s influence.
Instead of creating its own Pharmacy Benefit Manager (PBM), Cost Plus Drugs opted for strategic partnerships with PBMs that aligned with its values, avoiding tactics like rebates and cost spreading. The partnered PBMs include Rightway Healthcare, EmsanaRx, and RxPreferred Benefits.
Additionally, Cost Plus Drugs partnered with Capital Blue Cross to expand its customer base to payers, and launched the Insulin Test Program to focus on making insulin affordable for folks with commercial insurance coverage.
And just to remind you how Cost Plus Drugs works: they’ve essentially created an integrated drug supply chain with strategic partners who align with their values of transparency.
H1 ‘23: Cost Plus Drugs
It feels like every week Cost Plus Drugs is announcing new services, medications, and partnerships. I’m obliged to keep you privy to it all. So, over the past six months, I’ve been bookmarking each new announcement and will detail them all below:
Team Cuban Card
Cost Plus Drugs announced partnerships with over 30 independent pharmacies nationwide that will accept a discount card called ”Team Cuban Card” to help patients purchase their medications at lower prices. The aim of the card is to address the preference of individuals who favor local pharmacies and have established relationships there, rather than opting for mail-order services.
Brand-name Drugs and Biosimilars
Cost Plus Drugs partnered with pharmaceutical company Janssen (a subsidiary of J&J) to offer Janssen’s popular, brand-name diabetes drug, Invokana. This is Cost Plus Drugs’ first brand-name drug offering that is around $400 cheaper than the brand-name price at other pharmacies.
Similarly, the company has partnered with biotech company Coherus to make Humira biosimilar YUSIMRY available to Cost Plus Drugs customers. Recall that AbbVie’s Humira—the most successful drug to ever hit the market—lost its U.S. patent exclusivity in January (I covered it here). Now, several Humira biosimilars are hitting the market this month, with the hope of offering cheaper alternatives to brand-name Humira.
Below are quick one-liners of other key partnerships Cost Plus Drug formed over the past 6 months:
- Zócalo Health: with Cost Plus Drugs, Zócalo Health can provide lower prescription drug costs for Latino communities.
- eNavvi: this company is one of the leading prescription marketplaces using technology to provide physicians with coverage details and cost information, allowing them to choose cost-effective options. With this partnership, eNavvi’s Marketplace will show Cost Plus Drug’s real-time cash prices directly to physicians.
- binx health: binx is a health tech and diagnostics company that offers at-home testing for conditions like diabetes. Through this partnership, patients will be able to receive affordable medications (e.g., for diabetes) through Cost Plus Drug’s marketplace.
- @ihadcancer: this company is a peer-to-peer support community for anyone that’s had cancer. With this partnership, @ihadcancer will provide affordable medications to their customers via Cost Plus Drugs.
- OncoPower: this company is a community for cancer patients. Through this partnership, OncoPower will allow patients to look up pricing for their medication and order cheaper alternatives through Cost Plus Drugs.
- SmithRx: this company is the first PBM to offer Humira biosimilar YUSIMRY for one-tenth of the list price of Humira. SmithRx will work with Cost Plus Drugs to cover YUSIMRY.
- RxEOB: through its RxWallet feature, RxEOB will allow its users to shop for cheaper prescription drug alternatives before arriving at their pharmacy. Cost Plus Drugs will be integrated into RxWallet allowing customers to shop Cost Plus Drugs’ cheap generics.
- Diathrive Health: this is a diabetes and chronic disease management company that will incorporate Cost Plus Drugs into their solutions, giving their community access to low-cost prescription drugs.
With the savings realized through using Cost Plus Drugs for generic medications (and now brand-name and biosimilars), I can’t fathom why CMS or the VA wouldn’t partner with the company. Perhaps they’re already engaging in discussions! I don’t know.
But the evidence is clear.
A study published in the Annals of Internal Medicine revealed potential prescription drug cost savings of $3.3 billion for Medicare Part D beneficiaries in 2020 if they had used Cost Plus Drugs, accounting for approximately 36% of total Medicare Part D spending. Note, I recently discussed the Medicare Drug Price Negotiation Program, which is estimated to save Medicare Part B and D approximately $9.6 billion annually over ten years by allowing Medicare to negotiate prices for selected high-cost drugs. Now, imagine the impact of a partnership between CMS and Cost Plus Drugs, potentially increasing Medicare’s prescription drug savings by 30% each year.
But there’s even more evidence that a CMS-Cost Plus Drugs partnership would be beneficial.
Another study in the Journal of Clinical Oncology analyzed potential cost savings for seven popular oncology drugs if beneficiaries were to use Cost Plus Drugs’ pricing instead of Medicare Part D pricing in 2022. The authors found $661.8 million (78.8%) of potential savings if the average Medicare Part D price for these seven oncology drugs were Cost Plus Drugs prices instead. Just incredible.
A Cost Plus Drugs partnership could even extend to the VA, which already negotiates drug prices for veterans, helping to minimize out-of-pocket costs. I haven’t found any studies yet analyzing potential savings if the VA’s negotiated drug prices were replaced with Cost Plus Drugs pricing instead, but I’m sure savings would be significant. Maybe I should do the study?
In summary, Cost Plus Drugs has forged numerous strategic partnerships to enhance the affordability and accessibility of prescription drugs over the past six months. With potential savings of billions of dollars for Medicare Part D, a partnership between CMS (or the VA) and Cost Plus Drugs could yield substantial benefits. I’ll write a 2023 recap on the company in January 2024!
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