Prescription drug costs have been a tough pill to swallow, but badass billionaire Mark Cuban — and his game-changing online pharmacy — may be just what the doctor ordered.
“Mark”ed for Success
Innovative investor Mark Cuban is taking aim at the high-cost prescription drug market with his latest business venture. It’s not the first time Cuban has used his billionaire superpowers for good. But the Mark Cuban Cost Plus Drug Company is his most groundbreaking philanthropic endeavor to date as it’s cutting the cost of some of the most common — and most costly — prescriptions to a mere fraction of the typical retail price.
Unless you’ve been living under a rock for the past 20 years, you’ve likely heard of Cuban. The billionaire entrepreneur made headlines by buying a majority stake in the NBA’s Dallas Mavericks in 2000, and since 2011, he’s been one of the star investors on ABC’s Shark Tank. Now, with CostPlusDrugs.com, Cuban is angling to disrupt the pharmaceutical industry and revolutionize the way Americans get essential medications.
It’s no exaggeration to say Cuban’s efforts with Cost Plus make him the antithesis of notorious Pharma Bro Martin Shkreli, who was CEO of Turing Pharmaceuticals when it obtained the manufacturing license for the antiparasitic drug Daraprim — and jacked up the price by 5,000 percent!
By contrast, Cuban is cutting costs for consumers, while still turning a profit for his business.
Not unsurprisingly, Shkreli helped inspire Cuban’s latest venture. After Turing’s price hike, Dr. Alex Oshmyansky — now the CEO of Cost Plus — emailed Cuban and asked: “Look, if this guy can jack up the prices 750 percent for lifesaving medicines, can we go the opposite direction? Can we cut the pricing? Are there inefficiencies in this industry that really allow us to do it and really make a difference?”
Cuban clearly felt he could make a difference, and within months of connecting with Oshmyansky, the two partnered to bring the idea to life. And while Cuban could have easily gone with a plan that would maximize profits, he went in another direction.
“I could make a fortune from this,” Cuban, 63, told Texas Monthly magazine. “But I won’t. I’ve got enough money. I’d rather fuck up the drug industry in every way possible.”
And fuck it up he will, as Cost Plus has the potential to serve millions.
A September 2021 Gallup poll found 18 million Americans — or 7 percent of the U.S. population — regularly go without needed medications because of costs. Meanwhile, a 2019 study by the U.S. House of Representatives’ Ways and Means Committee found Americans spent more on medication, per capita, than the 11 other countries studied. And not only are Americans paying more, but in some cases, they’re paying as much as four times more than their counterparts in European nations.
Hell, it’s probably cheaper and easier for most Americans to get their hands on illicit street drugs than lifesaving pharmaceuticals. This leaves people in need with limited options to obtain necessary medications at a price they can afford. And too many forgo filling their prescriptions entirely.
America’s one percent, however, have no such problems. Not only are the nation’s rich and fabulous able to procure the medications they need, but they can afford so-called lifestyle treatments, too — such as pills that treat erectile dysfunction or hair loss.
Fortunately, at least one member of the one percent — Cuban — is looking beyond his own needs to start working on a real solution to at least one part of the seemingly never-ending health care crisis in America. As Cuban told Axios in January, “Not everyone sets the goal of being the lowest cost producer and provider. My goal is to make a profit while maximizing impact.”
With Cost Plus, some of the most commonly prescribed medications are available at a fraction of the retail price. To achieve such low prices for customers, Cost Plus marks up medications a mere 15 percent over the production cost, and then charges an additional $3 per order for pharmacy labor and $5 for shipping.
For each drug available through Cost Plus, shoppers see all the associated expenses itemized online. Consider atorvastatin, the generic version of Lipitor, which lowers cholesterol and triglycerides. It’s the No. 1 prescribed drug in the U.S., with 7.5 percent of the population being prescribed the medication in 2019. The average retail price is $55.60 for a 30-day supply of 10mg tablets. At Cost Plus, however, it’s a mere $3.60, and that price includes a $0.30 manufacturing cost, a $0.30 markup, and $3 in pharmacy labor. An additional $5 is charged for shipping on each order — whether it contains one or 100 prescriptions.
Cuban doesn’t plan to stop at just providing the drugs, either. While Cost Plus currently contracts out the manufacture of the medications they provide, the company is in the process of building their own compounding facility in Dallas, Texas, to make drugs themselves. That has the potential to bring significantly more medications to the public at huge markdowns.
For now, however, the company and Cuban are happy to bring the most common medications to Americans — without them having to mortgage their homes or file for bankruptcy.
Still, the billionaire could easily make more in profits by raising drug prices even a few percent above the current asking price on Cost Plus. Even doubling its existing prices would put them well below retail and make them cheaper than available discounts at other pharmacies. Those prices would still appeal to customers and raise eyebrows when compared to other sellers. And, in America at least, no one would bat an eye at a billionaire looking to make even more money off the hoi polloi — no matter how rich they already are. After all, even Shkreli has had his defenders.
But Cuban isn’t your typical businessman. He famously said, “It is so much easier to be nice, to be respectful, to put yourself in your customers’ shoes and try to understand how you might help them before they ask for help, than it is to try to mend a broken customer relationship.” And that’s what he’s doing with Cost Plus. He’s put himself in the shoes of the millions of Americans who lack access to safe, affordable drugs and made it as easy as possible for them to obtain the medications they need — without having to hunt for coupons, beg for samples from doctors or scour the internet for sketchy alternatives.
Cuban has also seen how Americans prefer to shop — online and from the comfort of their homes — and what they’re willing to pay — the cheaper the shipping costs, the better — and designed Cost Plus to meet their needs with all the possible desired convenience.
Anyone who’s followed Cuban’s career, though, should have seen this coming. He’s the man who said, “I’m not a fan of giving to charities. I have a few I support, but the overhead and inefficiencies really bother me. Instead, I pay people’s bills and help solve problems.”
So, Cuban starting a business that aims to solve one of the biggest problems facing Americans was inevitable, and he may just have the cure we’ve been waiting for.
Naturally we felt obligated to include the website link for Mark. That said, we have no comment one way or the other about anything else having to do with the service. … As a general principle, it sure seems like somebody should do something about prescription drug costs. We sure can’t wait on our elected officials to get off their butts and reach even a compromise. We should outlaw lobbying. … Yeah, THAT will happen.
