September 21, 2023


Great Health is a Choice

A bold venture to cut Rx costs

Opinion editor’s note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.


Mark Cuban’s latest business venture may be even more watchable than his appearances on the “Shark Tank” reality show.

Even if you’re not a fan of that program, there’s good reason to keep an eye on what he’s doing. It could save you money — potentially a lot of money — on generic medications, though as always there are important consumer caveats.

The brash billionaire and owner of the Dallas Mavericks has launched an online pharmacy with a mission: upending the business model that makes prescription drug manufacturing and distribution reliably profitable. It’s a system that often leaves consumers struggling to pay for the drugs they need.

Cuban’s remedy for this longstanding affordability problem: the Mark Cuban Cost Plus Drug Co., which comes with its own easy-to-remember web address:

The new venture doesn’t manufacture drugs, at least not yet. Instead, it claims to find savings from bypassing various “middleman” entities in the distribution chain. Nor does it operate to extract maximum profit.

Instead, the company is a “public benefit corporation.” Unlike traditional corporations, these entities’ primary interest isn’t building shareholder value, according to Cornell Law School’s Legal Information Institute. Instead, they focus on “stakeholders’ pecuniary interests, the interests of those who are involved and affected by the corporation (such as employees and customers), as well as the advancement of their intended public benefit goal.”

That’s a fancy way of saying that keeping prices low for consumers is part of the company’s purpose. More specifically, the Cuban formula for savings involves limiting the company’s markup to 15%, in addition to excluding “middlemen” like pharmacy benefit management (PBMs) firms.

Examples of the drug savings touted on the website:

  • Atorvastatin. This is the generic form of Lipitor, a brand-name cholesterol-lowering drug. A 30-day supply of 10-milligram capsules would cost $3.60 (before a $5 shipping charge and $3 pharmacy labor fee) from Cuban’s pharmacy vs. $55.20 at other retailers.
  • Fluoxetine. A 30-day supply of the generic form of the Prozac antidepressant (20-milligram capsules) would cost $3.90 vs. $21.90 at other retailers. Again, there would be shipping and labor fees.

Cuban’s approach is the type of innovation sorely needed to help control American health care costs. His firm is one of a number of promising efforts to hold down medication costs to consumers. Civica Rx, for example, is a nonprofit generic drug manufacturer formed in 2018 by health care systems and philanthropies.

But several reality checks may temper consumer enthusiasm.

One caveat has already been noted: modest shipping charges. Shipping means there’s also a built-in delay. When drugs are taken long-term, as high blood pressure or cholesterol drugs are, that’s usually not an issue. But when you’re filling a prescription for pain or an infection, that likely wouldn’t work.

Another caution: Cuban’s pharmacy claims to offer “hundreds” of medications, but that’s still only a fraction of approved prescription drugs. What you need may not be available. A key reason is that it only carries generic medications. Many newer drugs may still be under patent protection and, thus, not available as a generic.

Cuban’s website also doesn’t accept health insurance. Consumers pay directly for their purchases, though they can use their health savings accounts. For those with insurance, it may be cheaper to fill prescriptions at a local pharmacy.

Stephen Schondelmeyer, a University of Minnesota College of Pharmacy professor and director of its PRIME Institute, is a fan of innovation. But he noted that pharmacists play a vital role in avoiding drug interactions. Filling prescriptions in multiple places (such as getting one drug from an online site and another locally) could undermine that.

Schondelmeyer also notes that independent community pharmacists can offer competitive pricing. For example, a 2016 Consumer Reports analysis found that chain pharmacies “charged the most.”

Cuban’s online venture is welcome but not a cure-all for holding down drug costs. More action is still urgent, particularly from Congress, to further assist consumers.