In January 2022, Mark Cuban, the billionaire from Pittsburgh, Pennsylvania launched an online pharmaceutical company with the goal of decreasing the price tags of essential and necessary drugs that Americans need to sustain life. Without health insurance, it can cost an arm and a leg for prescription drugs. This can leave people with the choice of spending money that they can not afford to spend on their daily necessities or suffering without them which can be life-threatening.

Mark Cuban has the goal of eliminating these expensive prices to save money for the American consumer. The name of his company is Cost Plus Drugs. In his mission statement, Mark Cuban states “We started this company as an effort to disrupt the drug industry and to do our best to end ridiculous drug prices.” 

The model of the drug company is not as complicated and impossible as it may seem. In an article on CNBC News, the model of Cost Plus Drugs works by aiming to find drugs that are nearing the end of their patent cycle. Once the patent of the drug ends, this allows for any other drug company to produce the same drug with the formula and sell it as a generic. The reason some drugs are so much more expensive than they should be is that the drug manufacturers negotiate the price with health insurers. This process will then decide the price to be very high in order to maximize profits. Mark Cuban’s company takes the negotiating straight to the supplier of the generic drug manufacturer to slice that price by more than 70% in some cases. The CNBC article can be found here. 

Drugs being sold by Cost Plus Drugs are widely ranging from cancer, allergy, nausea, mental health, birth control, and HIV. After conducting some further research, you can find an entire list of each drug that Cost Plus Drugs sells. For example, a popular anti-depressant, Escitalopram, is sold for $3.90 vs. the retail price of $47.70. This adds up to a total savings of $43.80. It is obvious to see why Cost Plus Drugs is an important company for people who do not have insurance or have a very high deductible. The drugs will be sold for a 15% markup from manufacture cost, then a $3.00 fee for processing, and a $5.00 shipping cost. 

Another example of a popular drug that can be bought for way cheaper on Cost Plus Drugs is Sertraline. Sertraline is the generic drug for the popular drug Zoloft. In retail pharmacies, this drug is sold for $22.50. This can be purchased for $4.20 on Cost Plus Drugs.

With patents essentially allowing drug manufacturers to name whatever price they desire, it creates a monopolistic attitude to create more essential drugs and charge as much money as they would like to. Mark Cuban’s company is combatting this as best as they can, and will only improve as the future plays out.

After speaking with an anonymous University of Minnesota student, his thoughts on Mark Cuban’s Cost Plus Drugs were “I think this is a great idea that will not only save people money in the long run, but also should put fear in big pharmaceutical companies.” This can open the eyes of many pharmaceutical companies to help favor the consumer instead of their own pockets. 

Although Mark Cuban has always been a genius when it comes to investing and creating million to billion-dollar ideas and companies, I think this tops the cake. A company that actually wants what is best for its consumers is the best and easiest way to maximize profit. It is a win-win for all parties involved.