Mira Miller is a freelance writer specializing in mental health, women's health, and culture.

Nick Blackmer is a librarian, fact-checker, and researcher with more than 20 years’ experience in consumer-oriented health and wellness content.

Exorbitant drug prices are keeping life-saving medications out of reach for millions of Americans. Now, billionaire investor Mark Cuban is trying to change that with a new transparent pharmacy.

Cuban launched the online pharmacy, called The Mark Cuban Cost Plus Drugs Company (MCCPDC), on January 19, 2022. As a registered pharmaceutical wholesaler that purchases drugs directly from manufacturers, MCCPDC aims to “shield consumers from inflated drug prices” by bypassing middlemen.

The need for affordable drugs in the U.S. is undeniable. A September 2021 Gallup poll found that 18 million Americans were recently unable to pay for at least one prescription medication for their household due to rising costs. One in 10 Americans has skipped doses to save money. 

MCCPDC aims to address this issue by reflecting actual manufacturer prices plus a 15% markup and a $3 pharmacist fee, offering 100 generic drugs at affordable prices.

Historically in the U.S. drugs have been marked up in price at much higher rates than 15%.

MCCPDC launched with an initial inventory of 100 generic life-saving drugs, with more to come. Generic drugs are just as safe and effective as brand-name drugs—the only real difference between the two is whether or not they’re patented.

Though the company does not accept insurance and requires customers to pay out of pocket, it says its drugs cost less than most insurance deductible/copay requirements.

Mary Youssef, PharmD, RPh, mobile IV infusion therapist for HealthIV, told Verywell this appears to be true, at least in some cases. For example, a gout treatment Youssef said she comes across almost daily, called colchicine, has a retail price of about $182 per month. It may be offered for as low as $30 a month at a local pharmacy, but the MCCPDC price is just $8.70 per month.

With costs this low, using MCCPDC may certainly be cheaper than paying with insurance in the long run, she said, but “it all depends on the exact insurance coverage a patient has, what [pharmacy benefit manager] (PBM) controls their coverage, and what the drug is.”

According to Youssef, a largely unrecognized component of pharmaceuticals—and often the reason for outrageous prices—is third-party PBMs.

A pharmacy benefit manager (PBM) is a company that administers, or handles, the drug benefit program for your employer or health plan. They process and pay prescription drug claims and are responsible for creating and updating your health plan’s drug formulary.

“The idea behind PBMs was that they could reduce the administrative burden on the insurance companies and negotiate drug prices with pharmaceutical manufacturers,” Youssef said. “From their formation, PBMs were able to negotiate prices through both upfront discounts and rebates following sales. PBMs created formularies—lists of preferred drugs—and insisted on certain discounts off the manufacturer’s price of a medication in order to have it included on the formulary.”

Formularies provide significant leverage for negotiating prices with drug makers because, without inclusion in formularies, insurers won’t cover the drug and physicians won’t prescribe it. This, according to Youssef, allows PBMs to control pharmacy reimbursements, drug prices, drugs approved per plan, and copayment amounts for patients.

In the case of Cuban’s new pharmacy, however, MCCPDC is operating as its own PBM. The pharmacy is vowing to be transparent in its negotiations with drug companies. The company plans on showing the true costs it pays for drugs and eliminating practices like spread pricing—the practice of charging payers like Medicaid more than they pay for the medication and keeping the difference as profit.

“MCCPDC anticipates its PBM could save companies millions of dollars with no changes to its benefits, depending on the size of the employer, because it will eliminate the traditional PBM model,” MCCPDC said in a statement. “The company plans to integrate its pharmacy and wholesaler with its PBM, so any company that uses its PBM will have access to wholesale pricing through its online pharmacy.”

Thanks to Cuban’s established wealth of resources, Youssef said taking on these PBMs may either cause PBMs to increase their yearly lobbying fees to ensure they retain influence or try and join forces with Cuban.

Either way, Youssef doesn’t believe they’ll relinquish their control anytime soon, “not when they control the market.”

Americans looking to fill prescriptions without breaking the bank can use MCCPDC to access 100 different generic drugs for affordable prices. You will need to request your prescriptions from your healthcare provider in order to get them filled through this pharmacy.

The only other retailer that even comes close to offering similar drug prices to MCCPDC is CVS Caremark, according to Youssef, as they own their own PBM and chain pharmacies.

She said CVS Caremark controls how much they can use their PBM to pay their own pharmacies, where patients can fill their prescriptions if they have a Caremark health plan, and exactly how much patients’ copayments will be.

“Local independent pharmacies, like the one I currently work for, Metro-Drugs Rx, must take the costs upon themselves to keep their patients, work back and forth with the doctor to provide a cheaper alternative for a disease state management, and accept negative reimbursements from these PBMs to maintain our loyalty to patients we have guided for more than 10 years,” she said.

Youssef, therefore, sees the launch of MCCPDC as a step in the right direction. While she’s confident the pharmaceutical industry will continue to make a profit, she said there is some hope that “this may dent the process PBMs have so closely held onto,” often at the expense of patients.

“This will make some much-needed drugs a lot more accessible to the average American, but some may be in the mindset that because they are insured and pay their insurance companies, they should not pay out of pocket for their needed medications,” Youssef said. “Elderly patients who may not be computer savvy or those without regular access to internet [may not be] able to utilize this service. The only way to truly see if this will make a difference is to put it in practice and make it available to all patients.”

By Mira Miller Mira Miller is a freelance writer specializing in mental health, women's health, and culture.

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