Mark Cuban challenges Amazon, Walmart with discount online pharmacy
A billionaire “Shark Tank” investor is swimming in discount pharmacy waters.
Mark Cuban, billionaire entrepreneur, owner of the Dallas Mavericks and co-star of the TV show “Shark Tank,’ is launching an online pharmacy with an initial inventory of more than 100 generic drugs. The launch of the Mark Cuban Cost Plus Drug Company comes just a few weeks after the company’s pharmacy benefit manager (PBM) operation was established.
MCCPDC is a registered pharmaceutical wholesaler, which allows it to bypass middlemen and their associated markups. The pharmacy's prices reflect actual manufacturer prices plus a flat 15% margin and a $3 pharmacist fee, the company said. The goal of the new venture is to be "radically transparent" regarding price negotiations with drug companies, according to a report.
“We will do whatever it takes to get affordable pharmaceuticals to patients," said Alex Oshmyansky, CEO of Mark Cuban Cost Plus Drug. "The markup on potentially lifesaving drugs that people depend on is a problem that can't be ignored. It is imperative that we take action and help expand access to these medications for those who need them most. There are numerous bad actors in the pharmaceutical supply chain preventing patients from getting affordable medicines. The only way to ensure affordable prices get through is to vertically integrate."
Because MCCPDC will not pay spread prices to third-party pharmacy benefit providers in order to be allowed to process insurance claims, the online pharmacy will be a cash pay venture and not accept insurance plans. In November 2021 MCCPDC entered the PBM industry to serve companies providing prescription coverage in their employee benefit plans.
MCCPDC said it will be "radically transparent" in its own negotiations with drug companies as a PBM, revealing the true costs it pays for drugs. 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. 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.
MCCPDC is partnering with digital healthcare company Truepill in an effort to provide customers a seamless, secure e-commerce experience as they navigate the pharmacy's website, built and powered by Truepill's digital health platform. Patients will also receive prescription fulfillment and delivery through Truepill's nationwide pharmacy footprint.
Taking on Amazon and Walmart
MCCPDC is competing with some major players in its effort to provide a low-cost alternative to traditional pharmacies. Amazon launched Amazon Pharmacy, which allows U.S. customers to order prescription medications for home delivery, with free delivery for Amazon Prime members, in November 2020. Amazon Pharmacy is a distinct offering from PillPack, the online pharmacy startup Amazon acquired in 2018. Now known as PillPack by Amazon, it specializes in delivering presorted dose packaging for managing multiple daily medications for chronic conditions.
And in June 2021, Amazon and Walmart launched dueling programs designed to remove insurance companies from prescription drug payments, resulting in savings to the consumer. Walmart introduced a prescription savings program exclusively for members of its Walmart+ paid subscription service. The new Walmart+ Rx for less program is designed to deliver additional savings on the most commonly prescribed medications across a variety of health conditions, including heart health, mental health, antibiotics, allergies and diabetes management.
At the same time, Amazon began offering members of its Prime paid loyalty program six-month prescriptions starting at $6 for a selection of frequently prescribed medications. June 2021 also saw Walmart is diving deeper into health care with the launch of an exclusive private-label version of analog insulin under its ReliOn private brand of diabetes products.
With the launch of its online pharmacy's first inventory of 100 generic drugs in January 2022, Mark Cuban Cost Plus Drug Company is a vertically integrated pharmacy benefits manager. Construction of a pharmaceutical factory in Dallas slated for completion by the end of 2022.