How Mark Cuban’s discount pharmacy stacks up against other employer strategies 

In January, Mark Cuban Cost Plus Drug Company (MCCPDC), owned by billionaire entrepreneur Mark Cuban, launched an online discount pharmacy, costplusdrugs.com. Six months in, MCCPDC offers more than 800 generic drugs with plans to offer name-brand medications as well.

According to MCCPDC, costplusdrugs.com is able to achieve lower prices on certain generic medications by “bypassing middlemen and markups” as a registered pharmaceutical wholesaler. The pharmacy is currently a “cash only” pharmacy and does not process prescriptions through insurance. The pharmacy’s prices reflect the manufacturer price plus a 15% markup, a $3 handling fee and $5 for shipping.

With the stated purpose of bringing affordable medications to consumers, the online pharmacy is targeting both individuals without health insurance and those in high-deductible health plans. Employers that offer a high-deductible plan (84% of those with 500 or more employees, according to Mercer’s National Survey of Employer-Sponsored Health Plan 2021) should be aware that their employees may see costplusdrugs.com as a potential source of prescription medications. Some employers may even consider steering employees in high-deductible plans to the online pharmacy. But while any opportunity to reduce the cost of drugs is worth exploring, it’s important to understand the pros and cons of using this medication source in the employer-sponsored benefits space.

In this post, we’ll review both the cost and clinical implications of promoting costplusdrugs.com to help you tailor your approach to your population – keeping in mind that there are different considerations for employees enrolled in a medical plan and for part-time, temporary and other workers who are not eligible for coverage.  

Cost considerations

For individuals who currently have prescription drug coverage, the cost of their prescriptions, even generic medications, would typically be lower when processed through their employer-sponsored health plan through an in-network pharmacy than when processed as a “cash only" claim at costplusdrugs.com.

The occasional scenario in which the prescription cost is more favorable at costplusdrug.com is likely to occur when an individual has not yet met the deductible. However, high-deductible health plans typically have mechanisms in place to help members afford their prescriptions during the deductible phase. For example, a high-deductible health plan may allow medications for certain chronic conditions to bypass the deductible and process at a standard member cost share or $0 member cost share (depending on plan sponsor’s preference). In addition, a health spending account (HSA) can be paired with a high-deductible health plan to help members pay for their prescriptions.

It’s important that members understand that any amount they spend on prescriptions via costplusdrugs.com will not count towards meeting their deductibles and/or out-of-pocket maximums. Some members may be fine with this trade off if there are upfront savings on a prescription, while others may prefer to satisfy their deductibles and out-of-pocket maximum sooner.  

Clinical considerations

The limited list of medications currently offered by costplusdrugs.com makes it difficult for costplusdrugs.com to become a person’s primary pharmacy of choice. Consumers looking for a one-stop-shop, or seeking discounts on most brand or specialty medications, would not be able to use costplusdrug.com.

Differing needs in the consumer population for clinical support, oversight, and integration with other clinical programs means that costplusdrugs.com will be more appropriate for some people than others. A certain level of clinical oversight and support is offered by costplusdrugs.com through their partnership with Truepill, including 24/7 access to licensed pharmacists and screening for drug interactions with other drugs filled through costplusdrugs.com or reported by the consumer on their medication history. However, prescriptions filled at costplusdrugs.com would be adjudicated and filled outside of the employer’s medical and drug plans, and these prescriptions therefore would not be subject to the standard clinical and safety edits. These standard edits offered by pharmacy benefit managers (PBMs) are designed to ensure safe and clinically appropriate medication use, improve clinical outcomes, and screen for drug interactions and contraindications using the consumer’s full claims history, capturing data from any other pharmacies they have utilized. Data integration with clinical programs and disease management programs like Livongo or Omada would also not be possible for prescriptions filled through costplusdrugs.com.

In addition, information about drugs obtained through costplusdrugs.com would not be captured by the health plan, impacting claims data and more specific metrics, such as adherence. These data gaps could have various implications such as triggering unnecessary clinical outreach to members, and generally make it difficult to get an accurate picture of a member’s overall healthcare journey.

How costplugdrugs.com stacks up against other discount drug solutions

When it comes to targeting consumers with no insurance coverage or other financial hardships, costplusdrugs.com is entering a relatively saturated market and will need to contend with various other entities for market share. For example, Walmart and Amazon already offer discount drug programs and have shipping and delivery options, and many retail pharmacies offer a “$4 drug list”.

Currently, the pharmacy does not manufacture any of the drugs. MCCPDC did break ground in February 2022 on a manufacturing facility in Dallas, but in the interim the pharmacy is buying medications from other wholesalers/manufacturers and reselling them. The difference between MCCPDC and other pharmacies is the price transparency of the cost-plus model.

Drug discount card companies, such as GoodRx may also impact the pharmacy’s success. The discount cards offered by these companies can be used at most pharmacies and can be applied to many more medications than those offered at costplusdrugs.com, including brand and specialty medications.

Despite these potential challenges, costplusdrugs.com is generating significant interest in the market place from plan sponsors and employees alike. Plan sponsors interested in promoting this medication source to their employees should evaluate its cost and clinical implications and keep in mind that this offering may be more advantageous for certain segments of the employee population, such as part time and temporary employees.