Mark Cuban’s new company, which publicly started in January, sells hundreds of generic, regularly used pharmaceuticals at drastically reduced prices. And by big, I mean it. Looking at the prices will make your jaw drop.

The generic version of Actos, which is prescribed for diabetic patients and is generally sold for $74.40 at standard pharmacies, is available for $6.60 for 30 pills. Apriso’s generic form, which is indicated for individuals with gastrointestinal problems and costs $122.70 at regular pharmacies, costs $36.60 for 30 pills.

And that’s only a taste. The Mark Cuban Cost Plus Drug Company’s (yep, that’s the actual name) medicine ledger is lengthy. The medications are used to treat illnesses ranging from minor migraines to acid reflux, cancer, and neurological issues. Cost Plus Drugs also sells generic versions of some mental health pharmaceuticals, including Wellbutrin, which is used to treat depression, and Adapin, which is sometimes recommended for anxiety.

Overall, it appears that Cost Plus Drugs operates in the name of combating a few very important public health issues in the US. “If you don’t have high deductible plan or have a insurance, you know that even the most basic prescriptions may cost a lot,” Cuban noted in the mission statement of his organization.

“Every American should have got safe, affordable medicines,” adding that “we also believe it is equally critical to establish transparency into drug pricing so patients know they are getting a fair price.”

In terms of the latter, the Cost Plus Drugs website answers any questions you may have right now. How can medicine prices be brought down?

The Cost Plus Formula

In general, it’s confusing how prescription pharmaceuticals are priced, such as Humira, which is used to treat Crohn’s disease, or the EpiPen, which is used to treat severe allergic responses on the spot.

Behind the scenes, there are many moving components, including drug corporations and insurance, to mention a few. However, the price of name-brand medication ultimately reflects its demand.

Overall, it appears that Cost Plus Drugs operates in the name of combating a few very important public health issues in the US. “If you don’t have high deductible plan or have a insurance, you know that even the most basic prescriptions may cost a lot,” Cuban noted in the mission statement of his organization.

“Every American should get access to safe, affordable medicines,” he adds, adding that “we also believe it is equally critical to establish transparency into drug pricing so patients know they are getting a fair price.”

In terms of the latter, the Cost Plus Drugs website answers any questions you may have right now. How can medicine prices be brought down?

Cost Plus’s mechanics

In general, it’s confusing how prescription pharmaceuticals are priced, such as Humira, which is used to treat Crohn’s disease, or the EpiPen, which is used to treat severe allergic responses on the spot.

Behind the scenes, there are many moving components, including drug corporations and insurance, to mention a few. However, the price of name-brand medication ultimately reflects its demand.

That implies that pricing aren’t always determined by how long it takes drug producers to acquire materials and complete the work required to create the treatment. While the cost of research is sometimes claimed to explain high prices, a 2016 study showed “little indication of a link between research and development costs and prices; rather, prescription medications in the United States are priced solely on the basis of what the market will bear.”

For example, EpiPen increased its price by 500% between 2007 and 2016, however this is clearly a more extreme example of such a rise.

Furthermore, “there are several economic forces at work that lead the US to pay two-to-six times more for prescription pharmaceuticals than other nations,” according to John Clark, clinical professor at the College of Pharmacy and director of pharmacy services at Michigan Medicine, in 2020. These elements are also concealed inside the complicated intricacies of drug manufacture in the first place.

Cost Plus Drugs is an exception

First, the company intends to eliminate all of the enigmatic difficulties associated with drug manufacturing. Second, it plans to charge no more than the cost of production.

In the mission statement, Cuban stated, “Every thing we offer is priced exactly the same way.” “Our cost plus 15%, plus any pharmacy fees, if any.”

For example, the cost of albendazole, which treats tapeworms, at Cost Plus Drugs is 26.08 USD per course, which is then marked up by 15% for corporate costs to equal a total of $30. Add the $3 drugstore fee and you have a grand total of $33. According to the company, this is the final price, excluding shipping.

Furthermore, according to Cuban, the corporation has a second technique of keeping costs as low as possible: Cost Plus Drugs has no plans to spend money on marketing and will instead rely on word-of-mouth.

“We founded this company to disrupt the pharma sector and do our best to put a stop to exorbitant medicine prices,” he added in a statement.

Medicare could save billions of dollars

Like other experts, Harvard Medical School researchers were interested by this ultra-cost-effective pharmaceutical venture, so they tried to evaluate how beneficial these low-cost treatments might be on a bigger scale.

They conducted a study, which was published in the Annals of Internal Medicine in June, to assess how much money Medicare could have saved in one year if all generic pharmaceuticals provided to patients were from Cost Plus Drugs rather than pharmaceutical companies with conventional retail rates.

The study team identified the price – including pharmacy dispensing and shipping fees – for the lowest and maximum amounts available to sell in bulk for 109 generic drugs sold by Cost Plus Drugs on Feb. 8, this year. The minimum quantity was 30 and the maximum was 90.

The team then researched 2020 Medicare Part D spending for 89 of the 109 medicines. They excluded 20 because they were regarded incomparable to parallel, retail generic drug to a sufficient degree.

The team came to the conclusion that if Medicare had purchased generic pharmaceuticals in the maximum quantity given by Cost Plus Drugs, it could have saved 3.6 billion us dollars on 77 out of 89 generic drugs in just the year 2020. This was the conclusion reached after modifying all collected costs to remove any confusing variables, such as the cost of an ingredient between 2020 and 2022. If Medicare had purchased the bare minimum, it might have saved $1.7 billion on 42 of the 89 medications.

The authors also stated that this is a conservative estimate because Cost Plus Drugs has introduced a large number of drugs after this investigation. Nonetheless, “our findings show that Medicare is overpaying for numerous generic medications,” according to the report.