Mark Cuban is tackling out-of-control drug prices
pharmaphorum.com
pharmaphorum.com
It's not a charity. It's a profitable business and a very profitable one at that.
Oh yeah, and the prices aren't lower than what you can get using GoodRX.
Wikipedia said (lightly shortened): "Civica Rx is a nonprofit generic drug company founded in 2018 by national philanthropies and leading U.S. health systems[1] to reduce and prevent drug shortages in the United States and the price spikes that can accompany them. .... While serving 55 health systems and 1,500 hospitals (or 1/3 of all licensed U.S. hospital beds), Civica also supplies the U.S. Department of Veterans Affairs, the U.S. Department of Defense, and “340B” hospitals caring for vulnerable patients in some of the country’s most underserved areas. As of January 2022, Civica provided nearly 70 million vials of essential medicines, enough to treat over 26 million patients across the United States. These numbers continue to grow as Civica moves from a start-up to a well-established societal asset, serving more patients every day. Most recently, eleven of Civica's 55+ medications are being used to help COVID-19 patients, including neuromuscular blocking agents, sedation agents and pain management medications for patients on ventilators." Etc. ( https://en.wikipedia.org/wiki/Civica_Rx )
https://www.fiercehealthcare.com/hospitals-health-systems/dr... (thanks to pottertheotter in another HN link/discussion about Mark Cuban, below)
Other prior discussion: https://news.ycombinator.com/item?id=25932233 ("The Mark Cuban Cost Plus Drug Company" about which I don't know anything more.)
And then you realize this is simply how capitalism is designed to work. People in the business of healthcare always try to dream up these complicated business models and because the other complicated business models inflate prices and their new and better business model is going to save the world. It almost never happens or works. Capitalism and the set of basic economic laws win every time.
The only real solution I could dream up is to implement price control. Where the consumer's cost is some function of the manufacturer's cost. Where the function/regulators should discourage price gouging and encourage manufacturing efficiencies. Unnecessary costs like mass advertising campaigns should be banned and the R&D side of the business should be separated from the the sales side. I personally wish all the IP generated in medicine was somehow publicly owned; either through purchase, initial funding, or... IDK I just think it would benefit all by having the scientific side of medicine unrestrained from IP.
FWIW, I'm pro-capitalism but don't feel it should be universal. Healthcare deserves a universal approach with a goal of maximizing access and thus affordability. And, I say that having personally built a decent career on the business end of healthcare that would likely evaporate if healthcare was truly "fixed" and I would completely accept that fate for the greater good.
That's called a monopoly. And while it is a natural tendency it's also a point of regulation. By preventing monopoly you keep the desirable part of capitalism (competition) without having to enforce less palatable anti-capitalist measures like direct price controls.
But, it's simply not regulated today. You'd have a hard time proving they are pricing in this way as a means to hold the monopoly. They could point to their margins and say, "plenty of room for competition" but meanwhile you can't force other manufacturers to ramp up production without even fatter margins. They'd need margin + market share to break even.
It usually only when the market is very large, manufacturing is not complex, or when the original manufacturer is still charging a lot for generic (sometimes only a bit lower than Brand). That another manufacturer will ramp up production. Often times, even manufacturing a generic drug requires steep initial investment and can be risky.
Even for generics with multiple manufactures, "multiple" might be only a handful. When you compare that fact, to the pricing trends they follow, it then is an effective oligopoly. And while I don't believe it to be the case, the pricing trends I've seen sure do look like collusion. My experience is it's more like an indirect collusion, where company A employs folks that have worked for competitors A, B, and C. So when they hear "through the grapevine" that company B is going to increase prices 10% next quarter, suddenly everyone is increasing prices 10% next quarter (give or take). [This I've witnessed myself a number of times]
You mentioned "access" and "affordability" but there is a third leg of healthcare in terms of "quality". How do you see your proposed approach affecting healthcare quality?
For example, does public-owned R&D lower incentives to generate new treatments? Or, conversely, does it raise incentives for higher quality drugs for underserved (and unprofitable) diseases?
> How do you see your proposed approach affecting healthcare quality?
In the business end of healthcare, quality is just a base assumption. You (Okay most) would never make a business decision that erodes quality and clinicians are trying to improve quality all the time. The companies I've worked for have entire departments named simply "Quality" with significant budgets/headcount. That said, from an economic standpoint, it just needs to be a part of that formula. The current real thing that comes to mind is CMS (Medicare) issues quality scores to hospitals (star ratings) and their reimbursements go down if their quality score dips. It also helps folks "shop" providers as the star rating is public information.
> does public-owned R&D lower incentives to generate new treatments?
I don't think it has to. Scientist want to do science. If funded, I believe they will. I'm more concerned with what science we're ignoring because it has no obvious GTM strategy, link to some ROI, &/ random business objective.
> Or, conversely, does it raise incentives for higher quality drugs for underserved (and unprofitable) diseases?
I think it does, or can. Because I think it opens the field for more exploration. I've never been very close to how pharma R&D is performed, but my understanding is it's rather narrow. For example, "we want to solve X because we can make $Y". Once we solve X, we can do X.a, X.b, X.c, etc. It doesn't matter that they could make the world a better place by solving Z and perhaps that's what the scientist would rather be doing.
I'd certainly entertain counter-arguements, this is just Sim City brain at work on hypothetical realities.
I somewhat disagree. I think the best solution is for payers (single or not) to set prices based on quality adjusted life years (QALY). This is done in some single payer markets and makes a lot of sense as it couples incentives with impact.
While cooperate Pharma pays most of R&D costs, Fundamental (extremely early) research is usually still publicly funded through academia. This is where the possible solutions to Z come from.
The "problem" is that R&D spend can have more impact (lives saved) on mainstream diseases than rare diseases. Public-funding/ownership doesn't solve this fundamental issue. You can direct funding to rare diseases by decree, but you are still saving fewer lives than you would otherwise.
I also tend to agree that we should be solving problems that affect folks the most and factoring for the magnitude of the issue which is what QALY seems to do to gauge impact, so I like that idea. However, in doing so, I expect you're casting a larger net and bound to stumble on something that serves a smaller market as a byproduct of the R&D. In the current reality, the byproduct would get shelved and never commercialized because it had no ROI, which is also a shame.
Which is how I assumed Amazon was going to enter the pharma space. But what do I know?
Any way, would such a move much change your analysis?
PS: I distinguish market capitalism and corporatism. One is pro competition, the other is utterly opposed to it.
If he begins manufacturing the products, I'm not sure how that works. But I believe there's a lot of regulations and issues around manufacturer-to-patient sales. Tides could be turning, my experience in this part of healthcare is a few years old now. In theory, I suppose Cuban could stand up a separate legal entity for manufacturing where he sells to his pharmacy legal entity at some low price to avoid the economic forces I described.
Sorry, I misread. Further, OC explicitly says "Truepill is a white-labelled pharmacy e-commerce platform that MCCPDC".
I should have read more closely. I think part of my confusion is from not seeing (or maybe not recognizing) any examples on costplusdrugs.com.
Regardless, your points about retail price equilibrium still stands.
The choices remain "hollywood accounting" (fraud) and price controls. I continue to hope there's a third option. Not for any moral reason. But rather to avoid the inevitable omgherd libertarian backlash about the authoritarian governmental depriving corporations their god given right to further impoverish sick people. Something like changing the market incentives from fee-for-service to rewarding wellness (eg capitation). But I have yet to imagine how that could work for pharma.
Anyhoo. Thanks for humoring my grasping at straws.
I follow Cuban on Twitter and he retweets people constantly who are saving substantial amounts of money. In their own words the savings are huge. Are you claiming these people are lying or fake?
Just out of curiosity, I looked at some of the costs for the most prescribed meds. All seemed to within the same price range. Personally, I liked the GoodRx UI better.
Not that what Cuban is doing is "bad" but I don't know that it needs to be characterized as some radical new alternative. That seems more like marketing hype to me but it does a good job of raising awareness.
2. Scroll down on GoodRx. $787 is the price from CVS; other pharmacies like Rite Aid offer it at ~$114.
Obviously still a jump! Just not a $700 one.
Because it's probably paid advertising. Almost every article is paid advertising.
Why do you have this reaction to just this particular business? Do you have it for other businesses? Like a low-cost supermarket opens up and you're upset that they're not really growing their own food? At this point, I would applaud any competition in the US health care space, especially if it adds transparency.
Cuban found there is margin that can be squeezed in the pharma market due to being a high margin product with inefficient distribution. He moved on a revenue opportunity, plain and simple.
The end result is the anti-fans come off delusional and out of touch with reality.
Regarding Musk's loop and Boring company, I would also consider those a mild good. Hyped to high hell, but I don't see how that ever becomes bad.
What is awful about cheaper all electric tunneling rigs? If if meets some of the claims, then cool, if it doesn't, then it is neutral.
I am honestly curious why you think it is pretty awful?
One major issue with their rigs would be the future impact of their tiny tunneling. They tunnel such small holes that make the actual end products weak. Their Vegas tunnel are so small. God forbid there’s an emergency while there’s a lot of traffic. Good chance lives will be lost.
Vs the amount of results for their main product they’ve done and sold that isn’t a blow torch: the Vegas loop. That’s what I was talking about. It seems to be an awful idea that is widely seen as a disappointment now. Their LA plan was by far much stupider. They were trying to do a tiny fraction of the traffic that an electric underground metro could do while being much less energy efficient since trains are more efficient than a lot of cars.
There’s a boatload of issues that make the tunnel awful and nothing more than a way to push Teslas more. All I can find are negative takes of the Vegas loop. I can’t add anything others aren’t saying.
It’s hard for me to see how the entire thing isn’t a scam to push Tesla. It’s mine boggling that this isn’t getting the same treatment as Morbius the film (intense loud continuous mockery). Then I remember the insane amount of fans and the push to keep everything Elon positive.
All of that said, I don't think that makes the idea BS. The company is able to save many people money on prescriptions, which is a good thing. That Cuban or his company makes money on the way shouldn't bother us in the least (unless/until we ever get single payer).
[1] Their website says they will start manufacturing drugs this year
If he saves the consumer a lot of money, does it really matter if he takes 15% of the txn? Secondly, dont people/companies deserve to be paid for value they add?
My US-specific experience is that customers are squeezed for a pound of flesh. These often come at the worst time, when you are sick, possibly really really sick. For example, you're deathly ill, on line at CSV, and you're arguing about a $200 mystery co-pay for a prescription you cant wait days for. Luckily for me as a SWE, I can afford $200 mystery charges. For some it could mean death.
Any way to create transparency of pricing is really important, and could lead to live and death moments. I dont think we should dismiss these lightly.
The actual business (so far) is pretty straight-forward: 1. Call an API to TruePill pharmacy 2. They fill it under the Costplus label and mail it. 3. Cost of drug is acquisition + a small markup that Costplus and Truepill share 4. Display the Truepill API fields in a NEXT.js website
I totally respect Truepill operational chops too. Pharmacy is a very tough business.
I am waiting for someone to figure out how to break the PBMs pricing-power (monoply-like) control over that business. That would be the true breakthrough. Maybe it would be costplus in a pivot. Or a regulatory change.
Also - I deal with CivicaRX in a daily basis. It is a valiant attempt, but they have major shortcomings.
FYI: If someone wants an API that really tells how much drug costs. (trust, but verify!)
https://data.medicaid.gov/dataset/dfa2ab14-06c2-457a-9e36-5c...
1. Your insurance can and will block certain pharmacies if they got big enough (see PillPack before the Amazon acquisition). They have their own pharmacies and route the most profitable scripts there.
2. You would run into market size limitation if you decide to never accept insurance
3. Getting someone to switch their pharmacy requires major effort on their part - as well as the cooperation of all their doctors. It's almost like switching IT vendors!!
That article is a bit short on details. Some other recent articles I thought were more helpful included https://www.healio.com/news/rheumatology/20220428/mark-cuban... and https://www.drugtopics.com/view/the-good-the-bad-and-the-mis... . The second article is written more from the perspective of independent pharmacies.
The first article includes this snippet: "If there is reason for optimism, though, it lies with the medical background of Oshmyansky, the company’s co-founder and CEO, according to Gewanter.
'The radiologist Cuban is working with knows the business,' Gewanter said. 'Between the two of them, it is not difficult to imagine that they will figure out where the gaps are and how to exploit them. We can only hope that when they do, our patients will be the beneficiaries.' "
I think YC made a fantastic choice including Alex's company in YC, and it's been a pleasure seeing what Alex has done and is doing. I'll stop there for now.
This is very interesting but not because Cuban's business model is unique. It suggests that this group, who are probably a bit more net savvy on average, were not aware of other similar businesses like GoodRX.
This implies that there is a highly in demand product (cheap medication) but the problem is awareness, so it's a marketing challenge. Cuban is very well positioned to solve this problem by using his personal brand and tools like these PR articles.
This is a good thing! He has the brand, marketing chops and resources to drive it forward. It will increase the size of the market, meaning more people have access to life changing affordable medication. This may spawn more clones of the business model, further increasing the market size, rinse repeat. If this market gets big enough maybe it will apply pressure for change upstream? That would be a great thing.
Here on HN we are heavily weighted in our thinking towards the value of product in business (which is normally undervalued) and that is great, but examples like this reveal a real blind spot. Sometimes the value of something like marketing is forgotten or even worse dismissed. But they're extremely powerful tools when used correctly. Apply good marketing to a good product and you have Apple.
There are folks in this thread alone finding CostPlus prescriptions for significantly less than GoodRx.
Your tone is dismissive - how confident are you that Cuban’s pricing is not actually cheaper, and is just glitz?
I can't find any magic numbers here that explains how the proposal here to replace the "middleman" lowers prices ... by just being another middleman...
Is my local CVS an "expensive pharmacy"? No clue, but before Cuban's website I didn't even consider that these type of businesses could help lower my drug costs even below what I pay WITH insurance.
There's also a huge disconnect between people who occasionally need prescriptions, and those that rely on prescription medication daily. If you get one script a year it probably doesn't matter, but if your disease requires a drug that costs $5K/month, you get very informed, very fast.
Except I work in industry, both specialty and retail pharmacies.
For any chronic disease (the ones this program benefits most), most doctors will get you setup with the cheapest option for your insurance / PBM. As cost of treatment is the #4 indicator whether people will fall off treatment in the United States[1]. Additionally, in a retrospective study, cost was cited as the main reason for non-adherence in 17% of cases, making it the #3 leading cause[2]. This number is as high as 55% depending on age / demographic... Doctors working in chronic diseases know this and have to deal with it like any other adherence issue.
For one off treatments, people usually just go to their grocery store or local pharmacy.
Are there patients who are over paying? Absolutely. Is this a cash grab by a multi-billionaire because its not actually addressing the issues resulting in expensive drugs? Absolutely.
[1] adherence to refills and medications scale [2]https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3934668/
> Are there patients who are over paying? Absolutely
But then, you dismiss all of that by implying this is a useless exercise because patients who need low cost meds are getting them.
Which one is it?
The insurance companies are one of the main problems. It sounds like this doesn't solve that.
I am all for picking whatever the lowest price is. That is the whole goal.
Anyone who claims the solutions to the U.S. healthcare problems are simple doesn't understand the U.S. healthcare system.
The problem with the "simple" solutions is they often assume we start from a blank slate. Acknowledging we're not starting from a clean slate where do you propose we simplify first? And before you reply can you think about 1) how will it be done, including the political aspect and 2) what is the potential unintended blowback from that change?
https://www.nhs.uk/nhs-services/prescriptions-and-pharmacies...
The US has one of the highest per-capita spends on healthcare in the world[1] for demonstrably poorer health outcomes[2].
[1] https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... and elsewhere
[2] eg the CIA factbook all-cause mortality table shows Bangladesh as having about half the mortality rate of the US. https://web.archive.org/web/20201010211308/https://www.cia.g...
Good to know.
But if he’s able to have a profitable drug company that doesn’t produce drugs that lowers costs for consumers.. Welp that kinda shows that the system is in need of some change.
Good on this company for helping that though. Hopefully the clever people in the industry take notice and further improve things.
Color me shocked if it ends up harming independent pharmacists, though... and I say that as someone who thinks universal healthcare is the way to go in the US. Wonder how long before he decides to sell this company to Walmart.
This will not save more money than GoodRx.
Should I care? They're still middlemen at the end of the day.
It's a good thing that people will receive drugs at low prices, but most drug companies have programs to deliver them for low prices anyway. When those local pharmacies die, then large companies will step in and jack up the costs anyway. And if you don't believe that Cuban would sell that company, then you haven't paid attention to his history. The man is many things, but altruistic isn't one of them.