Mark Cuban online pharmacy could be game changer for employee drug benefits

Your company could potentially save big bucks if employees buy their meds from a direct-to-consumer online pharmacy backed by NBA team owner, “Shark Tank” investor and billionaire internet entrepreneur Mark Cuban.

Launched in January, the Mark Cuban Cost Plus Drug Co. sells generic prescription drugs – and only generic drugs – at the cost of ingredients and/or manufacturing, plus a 15% markup and fixed pharmacy dispensing and shipping fees. More than 100 medications are available on the site.

For example, a 30-count supply of 100 mg tablets of the chemotherapy drug Imatinib, which could cost thousands of dollars at the retail price, is available for $14.40. The site breaks it all down: $9.90 to cover the manufacturing, plus $1.50 for the profit margin, $3 for pharmacy labor and $5 for shipping, which gets added at checkout.

With people watching every dollar they spend because of inflation, it’s the kind of relief your employees will want to know about. But your people also need to be aware they’ll be paying everything out of pocket because the online pharmacy doesn’t accept insurance – a part of its “cut out the middlemen” philosophy.

Also, what you pay won’t count toward your health insurance deductible or out-of-pocket maximum, according to a UPI report.

Different kind of online pharmacy

The online pharmacy company can afford to charge less because it eliminates the fees that would normally be paid to pharmacists, health insurers and pharmacy benefit providers by either buying drugs directly from third-party suppliers or manufacturing them themselves. It’s a variation on the FDA 503B compounding pharmacy designation, where a pharmacy registers to manufacture large batches of medications without patient-specific prescriptions.

By keeping those costs low for employees, it’s a potential win for employers looking to keep administrative medical benefit costs under control because employees can reasonably take on more responsibility for generic prescription drug costs.

The transparent, fixed-rate markup pricing model Cuban’s company uses certainly bucks the prevailing distribution and reimbursement system of the $365 billion (according to the Wall Street Journal) U.S. prescription drug market. The key players in the pharmacy benefit management industry are sure to be watching the performance of Cuban’s new venture closely. You might want to keep your eyes on it, too.