DIA 2023: Solving the Drug Pricing Problem

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Session explores practicality of models for selling low-cost drugs.

Moderator Nancy Brandish Myers, JD, CEO and founder of Catalyst Healthcare Consulting; Craig Barton, SVP of Policy and Strategic Alliances and executive director, Association for Accessible Medicines; Josie Cooper, executive director, Alliance for Patient Access; and Vinod Mitta, medical officer, Centers for Medicare and Medicaid Services (CMS) Innovation, participated in the panel, “Is Mark Cuban Really Solving the Drug Pricing Problem?” during Day 2 of DIA in Boston.

DIA session, "Is Mark Cuban Really Solving the Drug Pricing Problem?” June 27, 2023. DIA 2023, Boston. Image Credit: © Nicholas Saraceno.

DIA session, "Is Mark Cuban Really Solving the Drug Pricing Problem?” June 27, 2023. DIA 2023, Boston. Image Credit: © Nicholas Saraceno.

Myers began the conversation to stress how focused the US government is on drug pricing, centered around the launch of the Inflation Reduction Act of 2022 (IRA) last August (with the maximum fair price or MFP, shifting to Medicare Advantage and Prescription Drug plans with an inflation “rebate”), followed by in February 2023, CMS introducing a $2 drug program in which a list of 150 generic drug that address the most common conditions, will be introduced for the aforementioned $2 per month.

This is where Mark Cuban’s Cost Plus Drugs comes in. Essentially, it is an online-only pharmacy that negotiates directly with drug manufacturers, side-stepping pharmacy benefit managers (PBMs) and insurers to offer patients drugs at a lower cost. It offers over 1000 total generics, biosimilars, and brand-name drugs, and it is fair to point out that this compares with how drugs are paid now, with the likes of Walmart ($4/30 day or $10/90 day fill for over 100 generics) and Amazon (flat $5/month for Amazon Prime members that sign up for RxPass for unlimited number of covered scripts, and 30-day fill for 50 of the most common generic drugs). This comes at a time, Myers points out, when 90% of US prescriptions are generic, but 80% of US spending on drugs are branded, according to FDA data.

Is Cost Plus Drugs a ‘breakthrough’ delivery model?

Being that there are old mail-order pharmacies out there, Barton says, the “breakthrough” is the fact that the Cuban name is behind it; Cuban is also pointing out a market inefficiency, but he raises the question, can this model successfully go beyond generics and biosimilars?

Cooper agreed, pointing out that the entrepreneur does not normally put his name behind ventures, suggesting that he is supportive of cause disruption in the system—his model eliminates the intermediary (PBMs) and instead goes straight to the patient. However, there are currently only 2 million patients benefitting, a small subset of the population.

And just for context, Mitta reminded the audience that 15-20% of Part D beneficiaries use cash-pay pharmacies.

Time will tell in terms of how CMS’s MFP initiative will impact the marketplace for single-source drugs and biological products.

Reference: Is Mark Cuban Really Solving the Drug Pricing Problem? June 27, 2023. DIA 2023, Boston.

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