Mark Cuban Cost Plus Drugs Strikes First Deals with Insurer, Outside PBM

by Peter Johnson

 

Mark Cuban Cost Plus Pharmacy, the online pharmacy and generic manufacturing startup backed by the eponymous billionaire investor, recently struck its first deals with a health plan, Pennsylvania’s Capital Blue Cross, and a PBM, Rightway Healthcare Inc. The direct contracting deal represents a major step for the startup, which has done most of its business so far as a direct-to-consumer retailer — and one drug pricing expert tells AIS Health that the deals help Cost Plus moves toward its ambitious, disruptive goals.   Blues plan sought out Cost Plus Capital Blue Cross said in an Oct. 7 press release announcing its deal that it is “the first health plan in the nation to collaborate with the Mark Cuban Cost Plus Drug Company.”  “We approached Cost Plus Drugs in an effort to provide yet another option for people to obtain affordable medications,” Samir Mistry, Pharm.D., Capital Blue Cross’ vice president of pharmacy strategy & services, tells AIS Health. “We want to increase access and affordability whenever and wherever possible, and this relationship allows that to happen in a new way.” Mistry says that Capital Blue Cross’ pharmacy benefits contract will stay with Prime Therapeutics, the Blues affiliate-owned PBM. The insurer has held a stake in Prime since 2020. Mistry says that “this will simply be another pharmacy option for our members to choose when filling their prescriptions.” Cost Plus CEO wants to rival Express Scripts, Caremark as PBM Cost Plus CEO Alex Oshmyansky, M.D., Ph.D., told AIS Health in October 2021 that the firm wants the bulk of its business to be paid through patients’ pharmacy benefits, whether that comes through payer direct contracting along the lines of the Capital Blue Cross deal — or the bespoke PBM that Cost Plus launched last year. “I do think we’re going to try to be the primary PBM for employers. I do think that’s the best way we can line up saving employers money,” Oshmyansky said. He added that Cost Plus is “absolutely” trying to reach the scale of major PBMs like Cigna Corp.’s Express Scripts or CVS Health Corp.’s Caremark. Ge Bai, Ph.D., a professor at Johns Hopkins University’s schools of business and public health, says that there is ample opportunity for disruption in the PBM space.  “The incumbent, large, dominant PBMs — overly aggressive behavior on their side creates opportunities for disruptive players to enter,” Bai says. “Insured patients are facing high generic drug costs. That’s a direct result of PBMs’ very aggressive behavior in the generic space.” It's a “warning sign” to big PBMs that Cost Plus has been able to start working out deals with insurers “in such a short period of time,” Bai adds. “If you don’t improve your value to your clients, be ready to get disrupted — get ready to lose your market share.”

 

From Radar on Drug Benefits

 

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