Mark Cuban's pharmacy teams up with 1st PBM, won't make its own

Mark Cuban's generic drug business, Cost Plus Drug Co., won't build its own pharmacy benefit manager after snagging its first PBM to integrate its services, Cost Plus Drug Co. founder and CEO Alex Oshmyansky, MD, PhD, told Becker's

Members of Rightway — a pharmacy benefit manager that aims to reduce prescription drug costs, has no rebates and no spread pricing — now have access to the nearly 1,000 generic drugs offered by Mark Cuban Cost Plus Drug Co. 

"It's turned out to be much more efficient to partner with transparently minded and innovative PBMs like Rightway," Dr. Oshmyansky said. "Why build all that infrastructure ourselves when there are good actors in the space who already have done it for us?"

For future partnerships, Dr. Oshmyansky said the company wants to avoid the "de facto bribes" pharmacy benefit managers can get for adding drug wholesalers to their formularies. 

When the online pharmacy launched nine months ago, it sold about 100 generic drugs with a $3 pharmacy dispensing fee, $5 shipping fee and a 15 percent profit to each order. Now, the generic drug company has more than a million customers, hundreds of generics — some of which are 99 percent cheaper than retail prices — and its own $11 million manufacturing facility set to open in November.

Adding brand-name drugs is also on the horizon in the next few months for Cost Plus Drug Co. 

Mr. Cuban first announced his drug company in 2021 with the goal to lower generic drug costs and "provide radical transparency." In October 2021, a few months before the online pharmacy launched, Cost Plus Drug Co. said it would create its own PBM that would be fully operational in 2023. The partnership with Rightway ended that plan. 

"We looked for great partners in the ecosystem we can work with to really deliver this vision, and for us, Mark Cuban Cost Plus Drug Company was one of those partners that fits perfectly into our model that, I would argue, doesn't fit into the rest of the PBM infrastructure," Rightway CEO Jordan Feldman, who applied to work with Mr. Cuban's Dallas Mavericks NBA team 15 years ago as a college freshman, told Becker's

Dr. Oshmyansky said Cost Plus Drug Co. got overwhelmed with demand while "people are getting terribly ripped off on their cholesterol medicine, on their antidepressants, drugs that should be very cheap," which spurred the decision to partner with Rightway.

Currently, about three payers control 80 percent of the nation's PBM market, and six control 97 percent. The FTC began investigating the PBM industry in June, and Alvaro Bedoya, an FTC commissioner, recently said the probe is a "personal top priority."

"Employers we work with every day are tired of these misaligned incentives, of these games and gimmicks," Mr. Feldman said. "They want better. They want different. Rightway's PBM is delivering that. Being the first PBM partner for Mark Cuban Cost Plus Drug Company acknowledges that when you have a better model, when you get rid of all those misaligned incentives, you can start to create some really transformational change in the pharmacy benefit space."

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