WASHINGTON (Legal Newsline) - Mark Cuban’s new prescription drug venture is unlikely to have an immediate impact on the market but when it does finally reach a tipping point, pharmacy benefit managers (PBMs) are likely to feel the pinch, according to a retired pharmaceutical executive.
“They are prescribing the top 100 drugs so it will take about five years to have an impact and it’s going to put pressure on pharmacy benefit managers,” said Elizabeth Reed Aden, a retired pharmaceutical executive, and author of the book, The Goldilocks Genome.
PBMs manage prescription drug benefits on behalf of health insurers.
“What it looks like Cuban is doing is he would pick up the prescription drugs pretty close to directly from the generic manufacturer and then put his own label on it," said Aden. "So, in theory, he has his own national drug code.”
Cuban is an entrepreneur, television producer, and majority owner of the Dallas Mavericks.
The Mark Cuban Cost Plus Drug Company (MCCPDC) had been a registered pharmaceutical wholesaler for more than a year until in January when Cuban expanded to include a cash-only, online pharmacy.
“It's likely not going to reach the employed population who get most their insurance through their employer,” Aden told Legal Newsline. “It might reach Medicare recipients depending on what kind of plan Medicare had for an individual retiree but it probably won't reach military veterans because the Department of Defense negotiates their drug prices directly. So, their drug prices are lower.”
A study published in the Annals of Internal Medicine this week found Medicare could save some $3.6 billion if it purchased 77 generic drugs in the maximum quantity from Cuban’s online pharmacy, according to media reports. That’s compared to saving $1.7 billion on purchasing 42 drugs in their minimum quantity.
Aden predicts the Medicaid market is next.
“I would bet that Medicaid does not have a whole structure of pharmacy benefit managers,” she said. “Because it's government, they have some infrastructure, but in theory, taxpayers are paying for that. So, they could get a better price through Cuban. That would be something I would explore if I were him.”