Mark Cuban, the Dallas Mavericks owner and “Shark Tank” star, has been making headlines recently with his direct-to-consumer venture, Cost Plus Drugs. The company sells generic prescription drugs and boasts more than 2 million members. As a family medicine specialist who has firsthand experience with American households’ dissatisfaction with the state of the nation’s prescription drug marketplace, I believe the enthusiasm for Cost Plus Drugs reveals an appetite for alternatives to the status quo in the pharmaceutical industry.
Cuban claims the reason behind the success of Cost Plus Drugs is the company’s decision to bypass pharmaceutical benefit managers — the negotiating agents insurance companies hire to negotiate big pharma’s prices down. But that might not be the case. Instead, its success appears to lie in its choice to collaborate with affordable generic drug manufacturers rather than the major pharmaceutical companies.
Last year, the Department of Health and Human Services found that between July 2021 and July 2022, major pharma companies raised the list price on more than 1,200 drugs by an average of 31 percent. That’s 23 percent more than the country’s overall inflation rate during the same period. Meanwhile, generic drug companies saved the U.S. roughly $2.6 trillion from 2012 to 2021, according to the Association for Accessible Medicines, a trade group representing generic drug manufacturers.