Billionaire, Shark Tank star, and entrepreneur Mark Cuban is perhaps best known as the owner of the NBA Dallas Mavericks. But he also owns Mark Cuban Cost Plus Drug Co., a for-profit business that went live and already reports selling over 350 different types of generic drugs. Some are drugs with small profit margins in which mega drug manufacturers were not interested and stopped manufacturing. Some were available elsewhere but at very high cost.
Now, Cuban is seeking to add insulin to this company's list of products. He aims to partner with insulin manufacturers to purchase and offer it at a large scale. Insulin is a biologic, not a drug, so it has different requirements. Although he does not yet have a date when insulin will be available through his company, he has already invested millions of dollars in infrastructure and regulatory compliance to pave the way for his company to sell it. He says he is prepared to invest more, if necessary.
Cuban says entrepreneurship means looking for "gaps in the market" where "inefficiencies exist" that can be exploited. When entrepreneurs find such gaps and are willing to build out a company to fill them, it can be for public benefit and private profit gain, a win-win.
Cuban says he was inspired to enter this market by reports of drug markups in the current distribution models, lack of cost savings reaching patients, and a drug company owner raising prices on drugs not based on cost to manufacture and distribute, but based on the medical desperation of the patient.
Today, he says his sales model charges 15% markup plus $3 delivery. In some cases this may be nearly the same price as other sellers, but in some cases the savings can be thousands of dollars per script.
Cuban says he will eventually add brand name drug sales to his company's offerings.
It will be interesting to watch how these alternatives affect the drug market in the years to come.
Photo credit: costplusdrugs.com
"If [another] guy can raise prices 75%, 100%, there must be inefficiencies in this marketplace to reduce prices in the same manner." "We started Mark Cuban Cost Plus Drug Company because every American should have access to safe, affordable medicines.” Mark Cuban