While the Inflation Reduction Act looks to reduce drug prices according to Healthcare Finance, compared with 19% for all goods and services., the cost of prescriptions has become burdensome for Americans of all ages -- increasing by 35% since 2014
Some 18 million Americans can't afford their prescriptions, according to a 2021 Gallup survey, and 10% of adults actually skip doses as a way of cost-cutting.
To help alleviate the burden, billionaire entrepreneur Mark Cuban launched the Cost Plus Drug Company in early 2022. The offers prescription drugs at prices that are far lower than most retail pharmacies and even many discount sites.
"It's just wrong that people have to choose between eating, their rent, and taking their medications or buying their medications in the United States of America in 2022," Cuban told PBS in June. "It's just wrong. And it was obvious there was not going to be a political solution."
Should the clear Congress and get signed into law, it will give Medicare the chance to negotiate drug prices for the first time ever -- but only on a very limited number of medications.
And, Cuban added, "all these numbers work from artificially set retail and wholesale prices."
A June 2022 study in the Annals of Internal Medicine found that Medicare could have saved $3.6 billion in 2020 if it purchased prescription medications through Cuban's Cost Plus Drugs.
How does Cost Plus Drugs work, why are its prices so cheap and how can you take advantage of its low prices? We'll give you all the details.
What is Cost Plus Drugs?
Cost Plus Drugs was started in January by Dallas Mavericks owner Mark Cuban and radiologist Dr. Alexander Oshmyansky, now the company's CEO.
"When I see an industry that is just so convoluted and messed up like the pharmaceutical industry is, I saw it as a great opportunity," Shark Tank investor Cuban said on The View in February, "and that allows us to charge much, much less."
The Cost Plus Drugs site was launched with the aim of avoiding pharmacy benefit managers -- intermediaries who negotiate drug prices with manufacturers on behalf of health insurance providers. PBMs have come under criticism for pocketing negotiated savings, as well as for a practice called "spread pricing" -- charging payers like Medicaid more than they pay the pharmacy for a medication and keeping the difference (or "spread") as profit.
Shortly before its launch, Cost Plus Drugs created its own pharmacy benefit manager, allowing it to provide medications to companies with health plans. But Cuban has promised Cost Plus Drugs' PBM will be "radically transparent" in negotiating drug prices and will not employ spread pricing.
What medications are available at Cost Plus Drugs?
As of Aug. 4, Cost Plus Drugs offers 337 drugs including medicines for high cholesterol, kidney disease, mental health, diabetes, arthritis, migraines, allergies, cancer, HIV and many other conditions.
Cost Plus Drugs sells the top 10 most prescribed generic drugs in the US -- atorvastatin, levothyroxine, lisinopril, metformin, amlodipine, metoprolol, albuterol, omeprazole, losartan and simvastatin -- as well as many of the top 50 most prescribed medicines. Although Cost Plus Drugs warns that some medicines have limited stock due to supply chain issues, a random check of 50 of its 337 medications found all of them were available.
The company is constantly expanding its inventory and provides a form for submitting requests for new medications. On The View, Cuban said that he hopes to be selling 2,000 medications by mid-2023.
How much lower are Cost Plus Drugs prescription prices?
Drug prices in general will vary considerably based on the provider and PBM. Cost Plus Drugs provides a comparison of a listed retail price and its own price for every medicine it sells.
Some of the savings are remarkable: 30 tablets of the generic version of the bipolar disorder medicine Abilify (aripiprazole) retails for $678, compared to the same amount and dosage for $6 at Cost Plus Drugs.
However, retail prices of prescription drugs can skew higher than what many people actually pay. Discount online pharmacies like GoodRx, Blink Health and SingleCare already provide coupons that can lower prices considerably. Even so, prices at Cost Plus Drugs compare favorably.
For example, a box of 30 tablets of the generic version of Zegerid -- commonly prescribed for acid reflux -- currently sells for $20 at Cost Plus Drugs. Blink Health sells generic zegerid for $86, much lower than a listed retail price of $2,073, but four times more than Cost Plus Drugs.
The savings appear to be real for many prescription drugs. Thirty tablets of the generic version of the heart medication Toprol XL (metoprolol succinate) go for $3.90 at Cost Plus Drugs, compared to $24 per 90 pills (or $8 per 30) at Costco.
The generic version of the antidepressant Pristiq costs $18 at Cost Plus Drugs. Discount pharmacy GoodRx sells it for $25, the next lowest price we could find online. That's far lower than the average retail price of $290, but more than Cost Plus Drugs.
At CVS, a three-month supply of 20mg of generic Lipitor (atorvastatin), a commonly prescribed medication for high cholesterol, costs $362 without insurance.
At Cost Plus Drugs, the same three-month supply sells for $6.
The company is also in the process of constructing an $11 million, 22,000-square-foot facility in Dallas to manufacture its own versions of generic drugs, which could lower prices even further.
How do I order prescription drugs from Cost Plus Drugs?
First, you'll want to view the list of medications available at Cost Plus Drugs to see if it has the prescription drugs you need. If it does, you'll need to create an online account, verify your email address and enter basic information about your health history and any current medications you are taking.
After you're registered with Cost Plus Drugs, you can provide your doctor with a paper form that includes all of the information they'll need to submit your prescription.
Alternatively, you can ask your doctor to write a prescription that includes your name, email address, date of birth and any medications you take. The National Council for Prescription Drug Programs (NCPDP) Provider ID for Cost Plus Drugs is 4940208 and its telephone number for prescriptions is 833-926-3384.
Your doctor can also fax your prescription information or the paper form to 650-683-9775.
Why are prescription drugs so cheap at Cost Plus Drugs?
Unlike the mysterious calculations behind drug pricing at traditional pharmacies, Cost Plus Drugs uses a transparent method -- the wholesale price Cost Plus Drugs pays for the medicine plus a 15% markup, a $3 pharmacy fee and a $5 shipping charge. Prescriptions are filled by the pharmacy services startup Truepill.
On the company's mission page, Cuban specifically calls out the price of albendazole, a drug used to treat hookworm, which continues to thrive among poorer communities in the Southeast US. (In a 2017 paper, researchers found more than one-third of the people in one Alabama county were infected with hookworm disease.)
Normally, albendazole costs on average $441 for its daily dose of two tablets, which could be taken for up to 30 days. At a wholesale price of $26 plus $4 markup and $3 pharmacy fee, Cost Plus Drugs can sell those two tablets for $33, plus $5 for shipping. Multiply that $408 in savings for two tablets by 30 days and you're talking about a potential difference of $12,240.
Does Cost Plus Drugs take health insurance?
Cost Plus Drugs does not currently accept any health insurance. The site claims that "even without insurance, our prices are less than what you would pay when using your insurance at a typical pharmacy."
The company does work with some pharmacy benefit managers, though, and allows the use of prescription drug discount cards for their members. According to the Cost Plus Drugs website, PBMs that work with Cost Plus Drugs can have members pay the listed price on its website or the insurance co-pay amount, whichever is lower.
For more on drug prices, learn howto counter rising costs and how and subsidize the healthcare marketplace.