This is the dream of every entrepreneur: You suddenly send an e-mail to Mark Cuban with an idea that can change the industry. Then he not only replied-he said yes, made you the CEO, and built a factory to do it all.
This is not a dream. This actually happened to Alex Oshmyansky, a Dallas radiologist, who was frustrated with the current system, which was called the Pharmacy Benefit Manager (PBM) for employers, health Insurance companies, Medicare Part D prescription plans, and other payers manage drug benefits.
As an intermediary between many insurance companies, pharmaceutical companies, and chain pharmacies, PBM should help reduce drug costs.
But according to regulatory agencies such as Federal Funds, PBM “may also tend to favor higher-priced drugs over more cost-effective drugs. Because they usually receive rebates calculated as a percentage of the manufacturer’s brand price, PBM’s rebates for expensive drugs The rebate is greater than for drugs that may provide better value at a lower cost."
According to the Federal Fund, drug manufacturers said they were forced to raise prices as they paid more and more rebates to PBM. An analysis recently cited by the organization showed that drug manufacturers’ rebates for PBM increased from US$39.7 billion in 2012 to US$89.5 billion in 2016.
According to the Wall Street Journal, several state attorneys general are investigating PBM pricing and rebate practices. The federal government is reviewing a new medical insurance rule that will require PBM to negotiate rebates to reduce patient costs.
Alex Oshmyansky, co-founder and CEO of Mark Cuban Cost Plus Drug Company [Photo: Vision Radiology]
According to the Wall Street Journal, about three years ago, Dr. Oshmyanski sent his "cold mail" to Mark Cuban, which received a very positive response from the billionaire owner of the Dallas Mavericks. Cuban told the Wall Street Journal that after receiving the publicity, he agreed to provide funding for the company with the goal of selling generic drugs at a transparent, fixed interest rate markup.
To achieve this goal, the new startup Mark Cuban Cost Plus Drug Company will launch an online pharmacy that will sell 100 of the most commonly used non-patent prescription drugs.
The new company promises to provide "thorough transparency" in how to price its low-cost versions of high-cost generic drugs.
The company stated on its website: “We will let everyone know the cost of manufacturing, distributing and selling our medicines to pharmacies.” “We added a fixed profit of 15% to get our wholesale prices. This ensures that we maintain Vitality and profitability. There are no hidden costs, no middlemen, and no rebates that only insurance companies can get. The price of every drug we produce is the same."
The startup’s first product will be albendazole, an antiparasitic drug, currently priced at approximately $225 per tablet. Mark Cuban cost plus retail price? Only 20 dollars.
"At Mark Cuban Cost Plus Drug Company, our cost of producing and distributing this drug is approximately US$13 per tablet," the company said on its website. "We increased the profit margin by 15% and charged a wholesale price of $15 per tablet from pharmacies, clinics, hospitals and other institutions. Then we set the manufacturer’s suggested retail price to $20 per tablet. If you have insurance, The price can be reduced to less than $1 per piece."
"We hate PBM, so we made a better one," Cuban's new company said on its LinkedIn page, promising to "help fundamentally change the way the pharmaceutical industry works."
Cuban's company's criticism of traditional PBM is fading.
"We believe that the traditional pharmacy benefit manager is one of the biggest scams in the U.S. healthcare system," the company added on LinkedIn. "They do exactly what their name says-they negotiate prices to benefit the pharmaceutical industry."
To illustrate the difference, Cuban's company said that the "P" in its PBM stands for "patient".
"Our only goal is to reduce the price of medicines for every American," the company promised. "We exist to benefit all hard-working Americans who are tired of worrying about their health care costs."
Mark Cuban Cost Plus Drug Company's factory in Deep Ellum, Dallas [rendered: Jacobs]
Mark Cuban Cost Plus is building a $11 million, 22,000-square-foot factory in the Deep Ellum community in Dallas to produce a variety of generic drugs, which is scheduled to open in September 2022. The construction of the plant began in February. The renovation and renovation of the existing building at 302 S. Walton St. according to the Dallas Morning News reported at the time.
Dallas-based Jacobs won a contract to provide engineering services for the construction of the factory. Jacobs pointed out on his website that the facility will be registered with the Food and Drug Administration to provide maximum flexibility for quickly responding to drug shortages. The plant will support the formulation, filling and packaging of sterile medicines.
"The innovative design of the facility will allow the production of small-volume products that the FDA believes are in short supply, as well as products used to treat rare diseases that usually affect smaller populations, namely orphan drugs," said Ken Gilmartin, executive vice president of Jacobs People & Places Solutions, in a report. The statement said.
Oshmyansky told the Wall Street Journal that the pharmacy will directly purchase drugs from generic drug manufacturers including Amneal Pharmaceuticals, charging customers a 15% markup and a $3 dispensing fee.
The company will start bidding for customers in 2022 and plans to start operations in 2023. He added that the company will share details of its operating costs with customers and will share the 100% rebates they receive from drugmakers.
The Wall Street Journal wrote that as the factory is completed and operational as soon as next fall, Cuban and Oshmyansky will create "an integrated pharmaceutical supplier that will integrate manufacturing, wholesale distribution, and pharmacy services under one roof."
"The supply chain for distributing medicines to patients is so cumbersome and fragmented," Dr. Oshmyansky told The Wall Street Journal. "The only way we decided to get our drugs into the hands of those who needed it was to establish a parallel supply chain, where we could control all middlemen and ensure the same transparency at all levels."
Mark Cuban Cost Plus PBM launched a website to start a conversation with companies that hire or manage healthcare with "1 to 10,000+ employees".
"We will show you all our costs to prove to you what we are doing," the company promised on the website. "We are here to make patient welfare management a way to make as many drugs as possible affordable for as many patients as possible."
The company added: "We hope you can cooperate with us to disrupt and disable large pharmaceutical companies."
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The news spread quickly. We are here to help you keep up.
Every working day, Dallas Innovates will provide you with the latest information you might have missed in the news about innovation, technology, and influence in the region...
These quotable North Texans inspire, inform, inspire or just make us laugh.
Do you have your own words of wisdom? let us know. You can also register here to get the "last words" in the Dallas Innovation e-newsletter every business day.
North Texas is a big place with many opportunities.
Therefore, we are always looking for contests and competitions, recognition programs, and available grants that innovators can apply for. Please keep in mind that the application information may change at any time, so please check the official website for the latest details...
The Texas Education Commissioner Mike Morath said that the long-term economic impact of the pandemic on the state of Texas could be as high as $2 trillion.
"This is the biggest problem facing Texas, [and] it's bigger than all the other problems we face, and it may add up," Molas held the annual public education at the Dallas Area Chamber of Commerce on Wednesday, October 20 State activities said. ..
According to CBRE data, Dallas-Fort Worth is the fastest-growing technology city and has been listed as one of the top markets with significant technological growth in the past ten years.
The Dallas-based commercial real estate services and investment company recently released a Tech-30 report to measure the industry’s impact on the U.S. office market...
Amazon cooperates with the Dallas Regional Chamber of Commerce to further commit to community involvement in the area.
After Amazon recently expanded its business and recruited in the marketplace, it invested more than $260,000 in community programs in the Democratic Republic of Congo.
The Dallas Regional Chamber of Commerce and Dallas are cooperating on the next step. Dallas Innovation is an online news platform that covers the latest news on Dallas-Fort Worth Innovation.
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