Mark Cuban on His Online Pharmacy: 'Our KPI is How Much We Can Reduce the Stress of Our Patients' (techcrunch.com) 68
Mark Cuban's announcement over the weekend of an online pharmacy selling over a hundred generic drugs at near cost was totally unexpected but will likely be welcomed by millions who struggle to afford medication. The billionaire told TechCrunch that the business model is refreshingly simple: "Lower pricing reduces patient stress, and that will lead to more customers." From the report: The Cost Plus Drug Company aims very simply to provide as many common medications as possible in generic form at as low a price as possible. All cash, no IP deals, no insurance companies -- just buy pills for what they cost to make, plus 15 percent to cover overhead. Asked about ROI, Cuban admitted there isn't much to speak of, by design. "I want to be above break even while maximizing the number of people who can afford their medications," he said. "Shoot. I would be happy if we can make a little, but push pricing of generics sold elsewhere down significantly. Our challenge is to keep pushing prices lower," not compete with anyone, he continued. "Our KPI is how much we can reduce the stress of our patients who buy generic meds. When people save a lot of money on their medications, they often will tell others they know that have the same challenges. That word of mouth impacts our growth the most."
If this is legit and he can make it happen (Score:5, Interesting)
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Mod parent Funny and GP Interesting. I'm just saying that because I'm jealous I never get mod points to give anymore.
But I especially agree with the part about not liking Mark Cuban all that much, though as rich people go, he's almost a regular Joe. You all know a poor slob named Joe, right?
It's already up (Score:3)
https://costplusdrugs.com/ [costplusdrugs.com]
Re:If this is legit and he can make it happen (Score:4, Insightful)
On Shark Tank he regularly invested in people out of the goodness of his heart. He has a long track record of putting ethics above profit. If Kevin O'leary said the same quote, I'd be suspicious.
mind blowing! (Score:3, Insightful)
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This is an attempt to undercut the market, grab at market share, and then raise rates.
Well someone can just do the same thing again and undercut him.
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That's not how non-profit's work.
I'm not sure how much he'll undercut the market. On their front page they show Lisinopril, a common blood pressure medication. Click the link to get details and they show a 30-day supply of 20 mg tabs is $4.20, plus taxes and shipping. I just picked up a 30-day supply of 20 mg tabs as CVS the day before yesterday for $3.60 (insurance discount).
I think where they'll make a difference is for people who don't have insurance. I'm assuming their $24 cost for non-insured is accura
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Re:mind blowing! (Score:5, Informative)
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My Rx at walgreens would fill for $90
At walmart: $30.
Walgreens has a large markup.
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However these vouchers work, the "mark up" is very complicated.
I take a brand name drug that is just under $500/month before I hit my deductible, then it goes down to $35/month. However, with a coupon I found, I pay only $10/month including the time before I hit my annual deductible.
How does this work? How much is the drug company being paid? I have no idea. Note that the coupon doesn't work with medicare.
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It's called an inducement outlawed by Medicare (Score:2)
But the company has a program that lets me get it for $10/month, but ONLY if I have private insurance (so that they get the insurance company's share of the payment but not mine, basically). It doesn't work with government insurance for some reason which I won't care about until I turn 65 later this year. But the drug company basically sets the price to some level that gets them hundreds of dollars per month, whether I'm paying it or the insurance company is paying. The drug company takes in over $10 billion per year for this drug, last time I checked, so they're probably covering their costs OK.
It's called inducement. To expound on your case for everyone else: the drug company is basically giving you a huge rebate for your portion of the cost so it can charge the insurance company the huge remaining cost. Say your drug costs $600/month. You have a drug copay of $200/month, the insurance company might have a negotiated rate of $450. So it pays $250 of it and you're on the hook for $200. The drug company knows that's a lot of money and a lot of people would balk at paying that. So the drug company s
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Your comment is super helpful, but I'm struggling to understand it thoroughly. When you get to the part where the drug company "writes off $190" - I'm unclear what is happening. I think that you do not mean that the drug company reduces the price by $190, so now instead of $450 they are charging $260. That would result in the customer paying $200/month for the drug copay and the insurance company paying the other $60/month. Somehow, you are saying that the drug company is somehow telling the insurance c
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Your drug costs $600/mo retail price. Normally your insurance pays $400 of that (or some negotiated price, but we'll keep this for simplicity,) leaving you with $200 to pay the pharmacy. The drug company knows that if you are struggling to pay your $200 share every month, you are likely to drop it altogether and/or try to find another medication that works for you that you can afford. So they give you a $190 discount coupon to use. You pay $10 to the pharmacy, they still receive their cut of the $400 fr
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You haven't explained how it works when I have not met my annual deductible and the insurance company would normally pay $0. I can only assume the drug company only gets $10 of revenue (probably less, because the pharmacy must take a cut).
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> There is nothing altruistic about this business.
"Shell’s Massive Carbon Capture Plant Is Emitting More Than It’s Capturing"
https://www.vice.com/en/articl... [vice.com]
I think this is more honest than milking the green energy sector, which I see a lot of these days. At least he is providing an honest service.
You aren't going to find many people to start a business that loses money, because much like a fusion reactor, it isn't self-sustaining.
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From what I understand they are cutting out the middlemen. Just manufacture and sell direct to consumers. I believe he may also (if I read another article correctly) may be building his own facilities to manufacture generics directly further cutting out the suppliers).
All in all, even if it's not super impressive this is great for consumers and a LONG time coming in the medical world where a pill that costs a buck to make is sold for $1900 simply because they know you need it to survive and the cost to ente
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> I believe he may also (if I read another article correctly) may be building his own facilities to manufacture generics directly further cutting out the suppliers).
If I recall, and it wasn't too long ago, didn't we have an issue where all out PPE and drugs were being manufactured in China (PPE) and India (generic drugs) meaning when there is a global emergency we may have issues securing them?
This all sounds like a bad idea. /s
Re:mind blowing! (Score:4, Insightful)
These days, doing what businesses are supposed to do in a competitive market rather than crazy shenanigans is comparatively altruistic.
The massive price differences from things like a GoodRx card show that there are a lot of shenanigans in play.
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Last year, my insurance company dropped support for a generic medication that cost me $60/month so I could pay $350/month until I met my deductible, and then pay only $87.50. They're in on the scam.
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Perhaps you should move to a state with sane laws that doesn't allow this kind of fuckery.
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Who do you think writes these laws?
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It's very different because it's in the name: the prices are as low as reasonably possible above cost.
Other businesses are operating very differently, cost only sets a minimum, but the maximum can be, and often is enormously higher: 'price Rx like our other profit maximizing Rx companies which have fungible services. We all know the optimal strategy: price everything as high as possible and otherwise signal intentions to punish defectors'. Another strategy in play is a confusopoly: with so many price
Generics aren't hard to get at affordable prices (Score:5, Insightful)
At this point single-payer healthcare is the conservative approach. It has been tested and shown to work better than any other system. Conservatism means taking caution when making large changes. We took that caution and we know how healthcare systems work now in detail. The radical approach now is to keep are quasi free market solution where large players manipulate the market to our detriment and we all just pretend it's not happening.
Re:Generics aren't hard to get at affordable price (Score:4, Insightful)
I'm not sure radical approach is the right phrase there.. it implies there is some 'approach' being taken to benefit people with healthcare, when that cannot possibly lead to the system we have in the US where there are drugs that can, to take an example I personally witnessed, I had a prescription that would have cost $2402 to pick up at a Pavillions if I'd paid for it directly, but with a GoodRX card they were willing to part with the same exact pill bottle for $25.35. That goes far beyond a reasonable and even an unreasonable profit margin, it's a sign of societal disease.
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The problem is the way in the market works it's surprisingly easy to keep a drug patent it for 40 to 60 years by using various patent shenanigans coupled with manipulating the market
You can't extend patents. You can make newer and better versions of a drug based on the patent, but you can't block others from making a generic of the old version.
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It is possible to make a new version of the old drug and patent it. It is also legal to market the new drug to medical doctor's while mentioning how the old drug will not be available soon. 2 years before the patent on the old drug expires, discontinue production and force people to switch. When the patents on the old drug expire, there is no market for the generic.
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Cyberax claimed:
You can't extend patents. You can make newer and better versions of a drug based on the patent, but you can't block others from making a generic of the old version.
Wrong.
If you find a new application for a drug for which you hold an existing, unexpired patent, and you can convince the FDA it's a safe and effective treatment for that condition, you can get the Patent Office to extend your patent by issuing a new patent for it. That's what Pfizer did for their little, blue pill here in the USA. (The "new" application was to treat angina pectoralis - which was what Viagra was developed to treat in the first place. Pfizer, however, patented it as an erecti
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If you find a new application for a drug for which you hold an existing, unexpired patent, and you can convince the FDA it's a safe and effective treatment for that condition, you can get the Patent Office to extend your patent by issuing a new patent for it.
That's incorrect. Patent extensions from 9 to 14 years are more-of-less automatic, but you can NOT patent a drug again. You can patent new uses and design a drug label in such a way that is tricky for generics manufacturers to avoid infringement (this is called "evergreening" - https://en.wikipedia.org/wiki/... [wikipedia.org] ) and in the past it was a bit problematic. However this can be worked around easily if the drug in question is popular.
For example, patents for Humira (a profitable and popular drug) expired in 20
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The problem is the way in the market works it's surprisingly easy to keep a drug patent it for 40 to 60 years by using various patent shenanigans coupled with manipulating the market.
What you're describing is not how markets work, but how a government-managed monopoly combined with illegal exclusive control of generic sources (what Shkreli was convicted of) works.
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At this point single-payer healthcare is the conservative approach. It has been tested and shown to work better than any other system.
For the public, yes. But there aren't as many opportunities for the wealthy to exploit everyone else for profit and power, which is at least a major reason why it doesn't exist in the US.
best of luck competing with Walmart (Score:2)
Have to wish him luck on a positive (Score:3)
Politicians assign jobs to their donors, political hack friends and individuals with the right diversity score and then check the box off as problem solved.
Leaders assign the jobs the the most competent and stay in the loop to drive real solutions. This administration and Washington DC in general is filled to the brim with political hacks.
And that goes along way to explain the many failures of the current political hacks leading America today. Who is really calling the Shots? Anyone know?
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Who is really calling the Shots? Anyone know?
Nobody. That's the terrifying truth of it. Our system of government is using a popularity contest to put the most charismatic narcissists at the wheel, and then swap them out for a new set every few years.
Probably the closest thing to competent leadership that actually has real power would be bankers and insurance companies. Money make the world go round, and bankers don't lend for anything that can't be insured. So there are some levers there that can move the earth... but ask anybody who has actually rubb
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Probably the closest thing to competent leadership that actually has real power would be bankers and insurance companies.
I'm not sure that 2008-2009 supports your hypothesis.
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Probably the closest thing to competent leadership that actually has real power would be bankers and insurance companies.
I'm not sure that 2008-2009 supports your hypothesis.
Touche. We're all doomed. ;)
Insulin (Score:5, Informative)
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It's insane how expensive insulin has gotten
...in the USA. Literally a fraction of the price everywhere else out of pocket.
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Wife is a T1... it's not the insulin. Not even the fancy rDNA manufactured stuff that's the problem. It's two things:
1) the mechanics of manufacturing. How It's Made did a segment on insulin manufacturer. There is an ungodly tiny amount of insulin in that vial of U100. Several orders of magnitude of dilution. Think drops in a rather large tank. How to mix that so you end up with consistent yields within .01% when you fill that tiny little vial. Yes, it can be done at scale, but it's a non-trivial pr
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It's not necessarily the mechanics of the manufacturing that's the problem. To the extent that it's a manufacturing problem, it's that the quality control required of all drugs is incredible. Making insulin is cheap. Making insulin that meets all the FDA standards is considerably more expensive.
But realistically, the thing that makes it expensive is the patents. Prices keep going up, and it's not because it's gotten more expensive to manufacture. It's because the drug companies are trying to maximize
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Generic forms of insulin aren't outrageously expensive, but doctors will often prescribe non-generic forms that have been engineered to have desirable properties like being faster acting or longer lasting than natural insulin. Those properties make the insulin better at treating diabetes, but the engineering gives the companies a chance to patent their version and jack up the price. We could do better if doctors were better about asking what patients can afford and prescribing them cheap insulin when appr
Sounds like Amazon in the early days (Score:2)
Eh.. yea no... (Score:3)
So one of the first drugs I checked is wrong on the "retail cost" by +37%, and this isn't doing anything for you if you have insurance.
This guy is a Randian [wikipedia.org] LIbertarian (aka, not an altruistic bone in their body) who got lucky when he hit the Yahoo! dotcom lottery, and most recently was simping for /r/WSB while flirting with politics.
There is absolutely some business angle, what is it? net margin for manufacturers on generics is 18% (or was in 2015) [usc.edu] Assuming some efficiencies in the last 7 years, this seems pretty much in line with the industry...
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So one of the first drugs I checked is wrong on the "retail cost" by +37%, and this isn't doing anything for you if you have insurance.
This guy is a Randian [wikipedia.org] LIbertarian (aka, not an altruistic bone in their body) who got lucky when he hit the Yahoo! dotcom lottery, and most recently was simping for /r/WSB while flirting with politics.
There is absolutely some business angle, what is it? net margin for manufacturers on generics is 18% (or was in 2015) [usc.edu] Assuming some efficiencies in the last 7 years, this seems pretty much in line with the industry...
If I read correctly, they're misrepresenting one of my medicines...by cutting the "retail price" in half of what I was asked to pay before GoodRX, and their pricing is about half of what I pay with the GoodRX deals. Sincerely going to look into this myself. If the pricing they list is accurate, I'm going to probably go that route next refill.
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Which drug?
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Singulair (Montelukast), something I was recently prescribed but didn't take, it was $108 before my insurance, they have retail listed at $169.
But, it's interesting that they're also giving their numbers based on a 30 day supply of the lowest strength of whatever it is. Some insurance companies require 90 days, for example, regardless of dose.
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This has some more details (Score:2)
There was an interview with the CEO [youtube.com] a while ago.
What ??? (Score:2)
Americans getting access to drugs at similar prices to what everyone else pays for the exact same thing ?
Has the whole world gone mad !! Next thing Americans will be able to take vacations without worrying about being fired, or maybe get some paid maternity leave longer than a day or two ?
Insanity ! Won't someone please think of the job creators !?
Ivermectin (Score:1)
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"Nice, he isn't beholden to Big Pharma"
Hopefully he's also not beholden to the CDC, FDA and DEA who are in big pharma's pocket.
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I had hope, but people wouldn't even be outraged if the establishment brought down a low-priced pharmacy of generics, they're just too willfully ignorant.
Not bad prices (Score:1)
(Well, actually it costs me nothing but that's the price the insurer pays the pharmacy).
Regular Website (Score:2)
Because it's useless in real world scenarios? Unpossible.
Wrong (Score:2)
The cheapest drugs come from the crappiest companies in India. The crappiest companies in India buy their raw materials from the crappiest companies in China. FDA inspects these about once a decade and tells them well in advance. What could possibly go wrong?