How Mark Cuban's Cost Plus Drugs has been turned into an insurance benefit

Mark Cuban Cost Plus Drug Co. is most known for selling cheap prescription drugs directly to consumers through the mail, but those cheap prices have been turned into a benefits solution for health plans.

"It was always our ambition because there's a variety of products where it just doesn't necessarily make sense for them to be mail-order products," CEO and co-founder Alex Oshmyansky, MD, PhD, said June 13 at the AHIP 2023 conference. "We've been working in the background to have our own retail network for quite some time." 

Cost Plus Drugs launched as a company focused on selling low-cost drugs with a 15 percent markup, a $3 pharmacy labor fee and a $5 shipping cost. Eighteen months after launching with a few dozen products, Cost Plus Drugs now offers more than 1,000 generic and brand-name pharmaceuticals. 

In April, Cost Plus Drugs launched an affiliated retail network of independent pharmacies, which has expanded to 80 locations across seven states. Cost Plus customers can receive a Team Cuban Card to purchase prescription drugs at an affiliated pharmacy, which shares the same pricing as the mail order model. Mr. Cuban previously told Becker's he is in talks with national grocery chains about a possible collaboration, but no announcements have been made. 

"Each individual card has a unique member ID which is tied to a patient's history, so we can track their medication usage and add on as a benefits solution," Dr. Oshmyansky said. "I tell people to kind of think of it as a second insurance card."

Cost Plus Drugs has even started to lease out the adjudication infrastructure within its new affiliated pharmacy network so customer claims that come from using the Team Cuban Card can be sent to a private payer.

Dr. Oshmyansky said drug purchases can potentially be applied toward a member's deductible if Cost Plus Drugs works with the affiliated PBM or the plan is designed to function that way. 

The company previously partnered with three PBMs: Rightway, EmsanaRx and RxPreferred Benefits. In October, Cost Plus Drugs began collaborating with Vivio, a specialty drug management platform that works with health plans and self-insured employers. 

The same month, the online pharmacy partnered with its first payer, Capital Blue Cross. The Harrisburg, Pa.-based insurer's members were able to start using their insurance cards at Cost Plus Drugs this year, and members can get reimbursed or put the cost of prescriptions toward their deductible, if eligible, by submitting a claim.

"One of the other things we're working towards at the moment is the ability to lease out the Cost Plus retail network to potential plan sponsors so that they can have their own Cost Plus pharmacy network, and then pass on those savings to their clients," Dr. Oshmyansky said.




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