Mark Cuban’s Generic Drug Pharmacy Could Save Medicare Billions of Dollars Each Year
A new analysis led by researchers at the Harvard Medical School shows Medicare’s prescription-drug program could save billions of dollars annually by purchasing generic drugs from the Mark Cuban Cost Plus Drug Company (MCCPDC).
The analysis compared the price of 89 generic drugs (treating things ranging from acid-reflux to cancer) sold by the MCCPDC to the price Medicare Part D plans paid in 2020, finding Medicare could have saved $3.6 billion on 77 generic drugs if it purchased the maximum quantity supplied by the MCCPDC.
If it purchased the minimum quantity available from the MCCPDC, it could have saved $1.7 billion on 42 drugs.
The potential $3.6 billion Medicare could have saved amounts to around 37% of its total spending on prescription drugs, while the $1.7 billion amounts to 18%.
In January, billionaire entrepreneur and owner of the NBA’s Dallas Mavericks Mark Cuban launched an online pharmacy selling over 100 generic drugs at the cost of ingredients and manufacturing, plus a 15% margin, $3 dispensing fee, and $5 for shipping.
The pharmacy sidesteps the traditional distribution models and negotiates directly with drug manufacturers to get better prices.
For example, a 30-day supply of the generic cancer drug imatinib costs $14.40 with MCCPDC, while it retails for $2,502 at other pharmacies.
Why it matters:
The researchers say the findings suggest Medicare is overpaying for certain drugs, costing taxpayers billions each year.
They also highlight the inefficiencies in the current generic pharmaceutical system and the need for policy reforms to improve transparent pricing and competition for high-cost generic drugs.