Industry Watch I Is Mark Cuban a generic drug price killer?
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Do not know whether it is coincidence, or God's arrangement, the old Ma family often emerges to change the industry and even the era of heroes, such as the "three horses" - Musk, Ma Huateng, Jack Ma, and now a Mark Cuban, who promotes a transparent fixed gross profit plus drug retail business model in the United States.

On March 4, Cuban participated in the White House Roundtable on Reducing health care Costs, where Cuban and his company aspire to bring transparency to prescription drug middlemen. We found Cuban's point of view interesting and provocative, so we have compiled the following five points, the core of which is "The Five Deadly SINS that Big PBMS are harming American health care - and how Cuban can fix it" :

01   No transparency

The first rule when contracting with PBMS in the US is not to talk about PBMS and their contracts. They prevent everyone - suppliers, manufacturers, employers, and third-party pharmacies - from publicly or discussing any aspect of their pricing terms or contracts. If you do, they will be happy to Sue you.

0Fancy brand and pharmacy name

PBMS decide to take the drug they can charge the most for and call it a "specialty" drug. But most of these drugs are nothing special.
Many of these products are small molecule generics with nothing unique about them, which they call special versions and force customers to buy them from designated proprietary pharmacies. Patients tell us they pay up to 100 times more for specialty drugs like imatinib or drxidopa than they or their employers pay for cost-plus drugs.

0PBM rebate distortion

Cuban has been outspoken in pointing out that pharmaceutical ceos don't understand how their health care costs work, especially when health care costs are applied to the rebates they receive from PBMS. They tend to view rebates as cash payments from drug manufacturers.
In fact, rebates are one way PBMS undermine and distort employer programs to the detriment of employees. That's because drug manufacturers don't pay rebates. Their salaries are paid by the company's sickest and oldest employees.
These rebates can be used to reduce employee deductibles or actually cover drug costs. Instead, these companies raise deductibles by forcing sick and older workers to use after-tax funds to pay out of pocket. Because "specialty" drugs are expensive, employees are likely to hit the out-of-pocket cap while still facing high monthly out-of-pocket costs for chronic disease medication.

04 Only rebates are available on prescription sets

Rebates are also why large PBMS limit the drugs they are allowed to dispense.
PBMS typically only reimburse drugs with significant rebates and exclude those without rebates from their formulary. When you can charge employers more than $8,000 a month for Humira (Adamyzumab), why give up a Humira biosimilar like YUSIMRY, which has a real price of $594 on Cost Plus Drugs? The PBM formulary should not exist. The doctor should decide which brand of medication the patient needs to get, not the PBM.

0Independent press pharmacy

Cuban couldn't find a better word than "S -- ing" to describe the financial abuses we hear about from non-proprietary pharmacies.
These pharmacies have zero leverage, so when the PBM says they have to pay the Direct and Indirect compensation (DIR) fee that the PBM arbitrarily calculates, they have to pay it. If the PBM decides to audit a pharmacy, it may "create" the problem because it knows the pharmacy is powerless to fight it.
Cuban once spoke to an independent pharmacy pharmacist who faced a $200,000 fine, which would put them out of business. Another pharmacist spoke out about patients being fined if they didn't pick up their medication within 30 days.
The situation is only going to get worse as these pharmacies buy their branded drugs from distributors at a fixed price. When a patient carries a prescription drug covered by Medicare Advantage, traditional Medicare, or an employer plan, the PBM may not be able to reimburse the pharmacy in full for that drug.

Cuban's ambitious transparent fixed gross mark-up drug retail business model

Cuban founded Cost Plus Drugs two years ago, and the product they sell is billed as "trust." They believe that with trust comes transparency. Cuban's transparent fixed gross mark-up drug retail business model is very simple: They source drugs and distribute them B2C or B2B. No complicated kickbacks, no tricks, no deceit. They keep business processes as simple and clear as possible, and they do their best to keep prices as low as possible. Cost Plus Drugs offers 2,500 legally approved drugs with complete drug procedures. When a patient goes to Cost Plus Drugs and finds the medication prescribed by their doctor, they will show you the Cost Plus Drugs actual procurement Cost, what the patient actually pays, the 15% markup on Cost Plus Drugs, and the $10 pharmacy packaging fee and shipping. If patients want to pick up their prescription at a nearby pharmacy, they can choose a pharmacy in the Team Cuban card network for the same price, plus pay a fee to an independent pharmacy. The prices of all supplied drugs are completely transparent and can be seen by anyone at any time. In fact, Cuban is happy to send the full price list to anyone, anywhere, and the Cuban team makes the take-home price of North American drugs no longer a secret or metaphysical.

Lindmik view

Mark Cuban was born in Pittsburgh, Pennsylvania, and grew up Jewish in Pittsburgh. Cuban moved to Texas in 1982 and went on to run several companies. In 1998, Cuban founded, a successful web company. He became rich when he sold to Yahoo (YHOO) in 1999 for a whopping $5.9 billion. On January 4, 2000, Cuban purchased the ownership of the NBA's Dallas Mavericks for $285 million, and remains the owner of the Mavericks until today. On a global scale, Cuban's business model is not the first, and this transparent profit markup retail model has been popular in China for many years. Of course, it is difficult for Xiaobian to judge that fat East gave Kuban inspiration to carry out the exploration of this distribution model in the pharmaceutical field. Fat east in addition to the boss body management is very good a bit of false propaganda suspicion, other products and services are very thoughtful and transparent. Many merchants regard the reserve price as the core secret of business, but the opacity has brought about an increase in the cost of trust, which has hindered the smooth completion of the transaction behavior, and the "sincere" business model of Fat East and Cuban has achieved great commercial success. Such business models can be traced back to small commercial retail explorations such as buffet breakfast shops and self-service newsstands. Nowadays, the difficulty of new drug development and the number of investment resources in the global pharmaceutical industry are increasing geometrically, and the industry is becoming increasingly internal. In the development of new drugs, improve the production efficiency and quality of preparations, fill market gaps or market relative monopoly situation is an innovation, can benefit patients. Similarly, innovation in the establishment of sales models and channels can also produce huge economic and social benefits, so that more patients can get better and cheaper drugs as early as possible, and remember the name of the company that provides these preparations.

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