Mark Cuban’s Cost Plus Drug Co. Partners with Emsana RX to Help Take on Big Pharma

Dec 16, 2022

[Photo: MCCPDC] Big pharma is called “big” for a reason. It’s hugely complex and deeply entrenched—and focuses more on boosting profits than making drugs affordable for all. So last week it took a big step of its own to “disrupt and disable big pharma.” MCCPDC announced a partnership with EmsanaRx, which calls itself “the only pharmacy benefit manager built by employers, for employers.” Together, the companies have collaborated on the launch of EmsanaRx Plus, a “first-of-its-kind supplemental drug discount product.” EmsanaRx Plus will give employers a pipeline for lower-cost medicines that have been contracted directly with drug manufacturers by Cost Plus Drugs. ‘Disrupting the current pharmacy supply chain’ Mark Cuban says his Dallas-based startup and Kentucky-based EmansaRx share a similar goal. “Like Cost Plus Drugs, EmsanaRx is working to disrupt the current pharmacy supply chain to eliminate the unnecessary markup and profiteering that is burdening businesses and consumers with high drug costs,” Cuban said in a statement. “By partnering with a company as committed to transparency as Cost Plus Drugs, and with the technological capabilities to customize to the needs of self-funded employers, we’re able to bring lower cost medicines to a wider swath of the American public,” Cuban added. Could lead to ‘deep discounts on medications’ EmsanaRx Plus will provide deep discounts on medications without employees having to go outside of their health plan benefits to realize those savings, ensuring greater continuity of care, the companies said. “Advocates” at EmsanaRX will help both employers and employees transfer their medications to a lower-cost option, while coordinating with providers on behalf of the patients. ‘Held hostage’ by an industry that’s ‘playing games’ Greg Baker, CEO of EmsanaRx, says employers are “being held hostage by a consolidated industry playing games that cost them more every year without adding value.” “In partnering with Cost Plus Drugs, we’ll help employers understand where high-cost drugs are a problem in their current benefit design and give them and their employees access to lower-cost alternatives,” Baker said in the statement. EmsanaRx was launched in October 2021 by San Francisco-based Purchaser Business Group on Health, with a goal of helping self-funded employers “provide high-quality, cost-effective medications to millions of Americans and their families.” The Purchaser Business Group is a coalition of 40 large employers, both public and private. A big shift: Mark Cuban’s company expands into the self-insured employer market Rendering of Mark Cuban Cost Plus Drug Company Plant in Dallas’ Deep Ellum [Image: Jacobs] Mark Cuban Cost Plus Drugs launched in January as a direct-to-consumer business, taking its online pharmacy live with a “radically transparent” offering: More than 100 generic prescription drugs could be purchased for a 15% markup plus a $3 pharmacist fee. The startup began building an $11 million, 22,000-square-foot plant in Dallas’ Deep Ellum neighborhood to manufacture its own generic drugs. Now the new partnership with EmsanaRx has taken Cost Plus Drugs in a new direction. “The partnership marks a strategic shift from operating exclusively in the direct-to-consumer market into the employer market,” noted Fierce Healthcare, a healthcare news service. ‘Could mean hockey stick type growth’ for Mark Cuban’s startup David Dobrzykowski—an associate professor of supply chain management at the University of Arkansas and director of its Walton College Healthcare Initiatives—sees big potential in MCCPDC’s move into the employer market. “This could mean hockey-stick type growth for [MCCPDC], which has the potential to further decrease drug costs for their customers,” Dobrzykowski told Advisory Board. “The move may also force the hand of PBMs to increase the transparency of their pricing and contract terms with manufacturers and self-funded employer health plans, both of which would bring enormous benefit to consumers.” MCCPDC is ‘pulling the rug out from under’ legacy pharmacy benefit managers Antonio Ciaccia, president of 3 Axis Advisors, says he understands why everyone from patients to employers to pharmacy benefit managers and insurers want to work with Mark Cuban Cost Plus Drugs. “It’s creating pressures on legacy PBMs to explain why their prices have been so bad relative to what a startup is offering,” Ciaccia told Advisory Board. “Cuban and his company are pulling the rug out from under them.” MCCPDC partnered with its first U.S. health plan in October The new move comes just two months after Cost Plus Drugs snagged its first partnership with a U.S. health plan. In October, Harrisburg, Pennsylvania-based Capital Blue Cross announced a collaboration that will enable Capital Blue Cross members to use their insurance cards at Cost Plus Drugs beginning in 2023, “further increasing access and lowering out-of-pocket costs for Capital members and their families.” Capital Blue Cross CEO Todd Shamash said the partnership will help bring “lower-cost medications to members and nonmembers alike” across the payer’s service area, providing some “much-needed relief to those struggling to pay for their vital—and sometimes life-saving—medications.” Get on the list. Dallas Innovates, every day. Sign up to keep your eye on what’s new and next in Dallas-Fort Worth, every day. One quick signup, and you’re done. R E A D N E X T The Mark Cuban Cost Plus Drug Company aims to “disrupt and disable big pharma” by offering more than 100 generic drugs “at striking savings” direct to consumers on a cash-pay basis. As a pharmaceutical wholesaler, MCCPDC says it can “bypass middlemen and outrageous markups” by simply charging a flat 15% margin and pharmacist fee. With an $11M plant going up now in Deep Ellum, Cuban clearly means business. The $11 million, 22,000-square-foot facility is expected to produce low-cost generic versions of traditionally overpriced drugs—and aims to be a designated site for producing drugs which other companies see as unprofitable to make. Two weeks ago, the MCCPDC launched its online pharmacy, offering 100+ generic drugs at manufacturer cost plus a flat 15% margin and a $3 pharmacist fee. Whether he’s buying a pro pickleball team or disrupting big pharma with his cost-plus drug company, Mark Cuban says he’s a “ready, fire, aim” businessman. So he surrounds himself with “ready, aim, fire” perfectionists to keep him from “screwing everything up.” That’s just one insight the billionaire shared in a fireside chat with Backstage Capital founder Arlan Hamilton at the Venture Dallas conference last week. “There’s always going to be somebody smarter, there’s always going to be somebody faster, better,” Cuban added. “I just try to work a little harder.” The charitable foundation of Dallas Mavericks owner and serial entrepreneur Mark Cuban—is teaming up with local tech firms to launch its free AI Bootcamps for high school students across North Texas and beyond. “These young leaders can now participate in the conversation around how AI should be developed and used,” Cuban has said. “We’re giving them a seat at the table.” Applications are now open. TAGS:

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