Mark Cuban Cost Plus Drugs Company To Lower Drug Prices
People are tired of paying a fortune for prescription meds.
Billionaire investor Mark Cuban thinks that the price of drugs is too damn high and so he wants his new startup The Mark Cuban Cost Plus Drugs Company to do something about that. The new firm The firm promises that it will only add a flat 15% margin to wholesale prices. The company states that this will ensure that it will remain viable and profitable.
Forbes estimates Cuban to be worth $4.2 billion and reports that he did not disclose how much of his own money the Dallas Mavericks owner invested in the new venture.
One of the biggest issues involved when then President Obama pushed through his Affordable Health Care Act was the high price of prescription medications. People without insurance find themselves footing the bill for expensive drugs when they get sick, or find out that their insurance provider does not cover the cost. And not that long ago investor Martin Shrkeli raised the price of medications provided by his Turing Pharmaceuticals company considerably. This included medications like insulin and the price of Daraprim, which is used to treat a terrible parasitic infection, went up 5,000% per tablet.
And right now one of the major problems involved in distributing the Coronavirus vaccines is whether or not governments will pay for it, or if local health care companies must cover the expense. The masses of people around the world are not able to pay for it out of pocket.
The pharmaceutical firms argue that they spend a fortune on research and development and most of that goes to medications that never get approved or which they fail to get to market before a competitor succeeds with its own version. They maintain that the prices which they charge for new medications reflect their need to cover all of that investment in R&D and is also why they rely on getting a copyrighted monopoly of any new medication for a medium period of time.
But social activists say that the cost of health care and specifically any medication which people need just to live should not be based on market forces. They would want government to cover the R&D costs to ensure less expensive medications. They also point out that insurance companies never pay the full list price anyway.
Founded in 2016 and based in Dallas, The Mark Cuban Cost Plus Drug Company declares that it is dedicated to producing low-cost versions of high-cost generic drugs. It pledges to provide radical transparency in how the company prices its drugs and that it will let everyone know what it costs to manufacture, distribute, and market their drugs to pharmacies.
The Martin Shrkeli scandal was a catalyst for the company’s formation. Mark Cuban Cost Plus Drug Company founder and CEO Alex Oshmyansky, who is also a practicing physician, told Forbes, “I was just so livid about that . I had patients have serious injuries from the high cost of drugs, which should have been very cheap. I’ve been angry about it for a long time.”
The company promises, “no hidden costs, no middlemen, no rebates only available to insurance companies. Everybody gets the same low price for every drug we make.”
Forbes reports that Cuban wrote in an e mail, “It’s ridiculous what the pricing for generic drugs is. Period end of story. I put my name on it because I wanted to show that capitalism can be compassionate and to send the message I am all in.”
But it should be remembered that the firm will only deal in the distribution of generic drugs. These are medications which have already been on the market long enough that their original copyrights have run out and so any company can now manufacture them. And it will not actually produce these drugs itself. So The Mark Cuban Cost Plus Drug Company will not be able to cause a reduction in the cost of new drugs or the production of generic ones.
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