More competition in the health care industry is one of the things this country needs. Mark Cuban’s Cost Plus Drug Company is delivering. 
Fortune reports Mark Cuban’s upstart online pharmacy just scored a big win by teaming with one of California’s biggest health insurers
CVS Health shares tumbled after Blue Shield of California, one of the state’s largest health insurers, said it would drop the company’s Caremark unit as its main pharmacy benefit manager.
The insurer, a nonprofit, said Thursday it expects to save as much as $500 million a year by switching to a group of companies including Amazon.com Inc. and an upstart from billionaire Mark Cuban. It’s the biggest win yet for those newcomers trying to upend the existing prescription benefits system, and if it works could provide a blueprint for other insurers and employers to follow.
Companies that provide health benefits have long bemoaned their lack of visibility into how much drug middlemen pay and charge for medications. The California insurer’s move will test whether it can assemble an alternative supply chain involving a mix of companies new to the pharmacy benefits business alongside established suppliers.
Amazon, the retail giant whose greater penetration into the drug supply chain has been dreaded by pharmacy benefit managers and drugstore chains, will offer at-home drug delivery. Mark Cuban’s Cost Plus Drugs Co. will provide access to low-cost medications, and Abarca Health will process drug claims, Blue Shield of California said.
The plan will also rely on Prime Therapeutics, a pharmacy benefits manager operated by a group of Blue Cross Blue Shield plans, to negotiate savings with drug manufacturers,
Big Win For Consumers
Fortune called it a big win for Cuban. I suggest it’s a big win for everyone.
It also strikes at the heart of precisely what is wrong with Medicare for all and single payer setups. When government picks up the entire tab, there is no incentive for consumers to shop around for better deals.
Those without health care coverage and those on high deductible plans are the biggest winners.
Some of the savings on CostPlus are amazing.
Just a Start
We need to go far beyond drug pricing into health care services.
Each year, millions of US residents travel to another country for medical care because of cost.
The practice is called medical tourism.
Due to the high cost of medical treatments in the US, more than 2 million Americans travel abroad for medical tourism every year (accounting for roughly 9% of all medical tourists worldwide). The cost savings speak for themselves – the OECD points out that a heart valve treatment costing US$150,000 in America may only cost US$9,250 in Poland.
The patient can often expect to stay in luxurious accommodation while they are undergoing treatment, and some companies will also provide medical professionals from the patient’s country of origin. The price of the patient’s flights and hotel are often included in the price, and the patient may even have an opportunity to enjoy a short holiday while receiving their care.
We have a long way to go, but we have a small start that’s worth cheering.
The important issue is generic vs cost of brand name meds, which Cuban said he would address later. Generics often don’t work as effectively, and many have detrimental side effects.
After the dot com bust, MBAs wormed their way into the healthcare industry and pumped prices. Out-of-patent brand meds sell in the U.S. for 10-20 times their price in Canada and Europe. A brand med, sold in U.S., is priced so that it equals the yearly out-of-pocket maximum for a high-tier prescription drug plan, particularly Medicare Advantage.
A majority of generics are manufactured in India or China. They have American distributors, but owned by China. Last year an Indian pharma announced it would not export to the U.S. because of ongoing FDA citations for cleanliness and accuracy. This left China as the only supplier for many generics. Supply chain and security issue for everyone except Congress and the very wealthy, that can afford brand meds.
Pretty much every prescribed drug has side effects, regardless of the branding on the package.
The old adage of letting food be one’s medicine is unknown in many corners of the globe these days, but consuming the nutrient-equivalent of garbage and then dealing with the effects by consuming one ‘script at a time is the modern way.
It also strikes at the heart of precisely what is wrong with Medicare for all and single payer setups. When government picks up the entire tab, there is no incentive for consumers to shop around for better deals.
Why are any drug you buy here available in Canada at about a quarter of the US cost?
Its a single payer health care system. Our per capita health care costs are double the industrialized world average and we have the absolute worst health. How is that possible with a single payer system???? Your facts are dead wrong on every level. That is EXACTLY what is needed here. A lot of our labor issues would lessen. FYI with Obamacare you get free health insurance if your income is below a certain level.There are many that limit their employment and incomes in order to stay qualified for their free insurance. Also many of those who are employed and have health insurance coverage have huge deductibles and copays they cannot afford and therefore avoid seeking medical care often with catastrophic results. Just because single payer doesn’t jive with your libertarian views doesn’t mean it can’t work. It without question is the best solution to this clusterfuck health system we have.
If you want to save money buy a 6 month or year supply of your drug at one time. I can get 2 generic prescriptions for my husband for a year EACH with a total cost of $60.34 at Costco. Cigna insurance charges $374.24. Our Dr. has no problem writing scripts for a year.
With my luck, I would die the day after buying a years supply.
Mark Cuban is just another opportunistic leech who uses his ties to progressive politicians and influencers to increase his wealth at the expense of others.
And Bill is just another internet conspiracy believer. BOO!
» Just a Start «
Yes. And now to branch into all other drugs.
Competitively priced, laying about in the drugstore.
Regulated to have accurate inserts, content descriptions, and purity.
There goes all the drug crime, all the problems with international drug cartels, 80% of the to-jail population, 110,000 lives saved from ODs. Magic of the market place. Think of the savings in policing alone.
This has to do with mental, emotional health. I used to think the dumbest people in the country were Kamala, AOC, the women on the View and Republicans who continue to support Donald Trump. I have recently become aware however, that many of the Millennials and most all the Zoomers are so dumb they can’t answer simple questions of math, history or geography. What is the square root of 4, who was the President before Trump, how many senators are there, what northern and southern countries border America, who is the leader of Russia, how many moons do we have? The mental and emotional state of these kids explains why they have been so easily indoctrinated into the whole woke ideologies.
In much of the country, all you have to do to graduate with a HS diploma is show up some of the time.
Not quite true, it is worse than that, it is reported that some schools in a blue zoo ( Baltimore?) graduated students who never showed up for a single day. That involves graduating illiterate thugs with the benefit to the school district of more government money for the phantom students.
As for healthcare it only takes the president to issue an EO to force compliance with the 2 Supremes rulings against medical monopolies. You would expect scum like Biden not to use that EO but why didn’t Trump sign such an EO the day he was sworn in?
Yes, any Mark Dice interview at an elite university campus.
I used to ask people here and there (at a university) what the square root of 37 squared is.
More than nine out of ten answer by saying they were poor at math and were glad to never have another encounter.
Poor maths or poor logic on their behalf, after a few seconds of mentally trying to solve the first part of the equation I realised it was a trick question with a D’oh answer.
Did anyone answer -37? Maybe an Asian student.
The above numbers are peanuts. Just a couple facets of the Pharma Medical Beltway colluding rape of US.
The facts are in on COVID. But, Fauci and his other kickback kings of the drug industry can’t stop taking bows “for saving the world.” While the emergency approval of Pfizer Covid vaccine did not include efficacy, any measure of long term damage and with little to no difference between the 20,000 with and without vaccine. And, multiple reviews now show side effects were essentially not reported. And those reported, covered up by Pharma and the Beltway.
It’s a tried and tested pattern of denial and deflection while millions die. The dollar cost may be the most minor concern.
Truth be known, the EUA for the Covid shots was illegal. FDA approved drugs with anti-viral properties, existed. Dr.s Fareed and Tyson used them to great effect on their Covid patients, with no deaths. Anti-virals were obstructed, to pave the way for an EUA mass vaccination agenda. People who died from Covid in 2020, couldn’t wait until 2021, for a shot to be authorized. Additionally, Steve Kirsch has been talking this month about the spike in deaths at Skilled Nursing Facilities right after the shots were rolled out to them. This is likely what triggered the CDC’s death safety signal, which was hidden from the public for 2 years, along with 770 other adverse event safety signals that were triggered. What else is the CDC still hiding from us?
Getting back to the subject of drugs, i read recently that a substantial percentage of drugs are being approved on the basis of one study. The story here is about drug prices, but what is the quality and safety of the product paid for?
Polonia, Turkey or Malaysia ARE NOT SOCIALISTS countries. They have good private hospitals.
Nobody goes to public hospitals in North Corea, Cuba or Venezuela. At least, no voluntarily..
Much of the high cost of drugs problem can be solved by simply allowing imports from other countries. Ironically most of the drugs produced come from China or India anyway but they get huge markups along the way.
Big pharma cries that without the high cost and US subsidizing the entire world, they can’t come up with new drugs….well there is no point in creating $30,000 drugs if no one can afford them. Just keep tweaking 50 year old drugs until they work better and sell them for $3.
I use medical tourism now myself, I go to Costa Rica or Mexico for dental work. A U.S. dentist charged $800 for a tooth that needed some work and that was the last straw, U.S. dentists have turned into scam artists and I’ve had enough. It’s cheaper to buy a ticket to south of the border, get a ton of work done, stay at a resort then come back refreshed than it is to visit a U.S. doctor or dentist. If I ever need major surgery, it will be outside the U.S.
Ironically, Americans flee U.S. healthcare for socialist healthcare countries.
People don’t pay for $30,000 drugs. Insurance companies do. And they have to by law. So, everyone with insurance effectively pays for it. Almost all new chemo drugs cost $15k/mo. Seems like that’s what insurance companies will bear. If you don’t have insurance, you can get a big discount. Drug companies would rather charge you say $3k/mo for the new drug since it’s better than nothing. When my wife had cancer, I never had to pay the deductible. Drug companies did. They weren’t going to risk losing $15k/mo over a $4k deductible. My wife was on 2 new drugs, so they were collecting $30k/mo.
People blame insurance companies for high insurance costs, but it’s the medical industry charging way too much who’s really to blame. But no elected official can say this or they’ll lose those $100k contributions.
“People don’t pay for $30,000 drugs. Insurance companies do. ”
I guess insurance companies conjure up money out of thin air.
You failed to understand the point. Insurance companies pay $30k for a drug that would cost an individual far less. Because the insurance company is required by law to pay the amount.
Check out http://www.molarcity.com.
Looking to head down to Mexico for some work myself in a few months.
Also, Big Pharma wants to develop maintenance drugs that you will have to take until the day you die. I saw an excellent documentary years ago about new strains of antibiotic-resistant infections. A smart doctor that was director of Pfizer’s antibiotic research lab said that the problem was the high cost of developing new antibiotics and getting them approved by the FDA…a long process. He went on to say that these drugs may be used by a patient for approx. 1 week. The ROI just isn’t there for most companies to try to develop new drugs that are only used briefly. They want drugs like Lipitor etc. that you take each & every day.
Yes, I think we should tariff this medical tourism to death! We won’t allow you back until you pay the difference between the “real” cost and the foreign cost. That’ll fix it.
Dentists are criminals. I paid 6k for a bridge, my dental insurance only covered 1k. Insurance gives you 35% on a bridge but its for normal charges. My dentist charges a multiple of the “allowed” amount. These guys should be locked up.
You know what’s going on here. They undercut competitors, wipe them out and then those price loss leaders suddenly get a rate increase. Rinse and repeat
“It also strikes at the heart of precisely what is wrong with Medicare for all and single payer setups. When government picks up the entire tab, there is no incentive for consumers to shop around for better deals.”
This is only true in corrupt, third-world countries like the US. In first world countries, the federal government uses its power to negotiate very low prices with pharma suppliers so that consumers don’t have to shop around. This is done because it significantly reduces costs to the government. This is impossible in the US because elected officials require bribe taking in order to get enough money to get elected in the first place.
And medical tourism is cheaper because most countries have some form of government price regulation of the medical market. So Americans can benefit strongly by taking advantage of other countries socialist policies.
Hi Mish
Can you please narrate how the American healthcare system works. What are the reasons for the high cost and what are the solutions. Or a link to any earlier posts explaining this will do. Thanks for your excellent work .
I have covered this before including my suggestions. I will revisit the topic.
Let me save you the trouble of repeating what has been said before. The answer is crony capitalism.
Monopoly & Corruption
“Can you please narrate how the American healthcare system works.”
It doesn’t. Nothing in America does.
‘What are the reasons for the high cost…”
The same as always and everywhere: Restrictions, bans and mandates; preventing cheaper competitors from competing unrestricted; for EVERY SINGLE SERVICE which contributes to the final cost to end user.
“… and what are the solutions.”
Again: Same as everywhere: Ditch ALL restrictions on unfettered competition for everything: from building more hospital space, to getting drugs form India, nurses from the Philippines, doctors from China and hospital builders from Mexico. Or, all from America, if those can offer the same service cheaper.
Unless anyone, anywhere, anytime, for any reason; who can do something cheaper; is allowed to offer their service here, we ARE overpaying. For all “here”, and for all “we.”
Your solution doesn’t pass the first post. The solution is always the same – follow the money and deal with that. This will lead you to the politicians who make the laws and for whom you voted. Until the current system whereby politicians may be swayed by selfish economic interest is changed, nothing will change. Get used to your prison. Don’t you realize that the current “healthcare” system is in place because your government wants to do the best for for you? And it only gets better from here!
Pharma is a big advertiser for media. Drugs are now promoted as the answer to your problems. The obesity drugs are the perfect example. The majority of the obese need a healthy diet rather than a wonder drug. The US is an over-prescribed country. We are sold on easy solutions – just take a pill. Same with depression and anxiety.
Exercise is hard and donuts taste good.
We can call it the Homer Simpson syndrome.
Maybe fat camps are the answer. Running every day, pushups, pullups and a low fat diet. That should do it!
Agreed. Decades ago you would never see advertisements for prescription drugs. I’m not sure if there was a ban on the ads, similar to restrictions on ads for booze.
Big pharma is also a huge political contributor to both sides of the aisle as they know where their bread is buttered and that is paramount as to why congress does little beyond the optics to reign them in.
To RJD1955, yes the drug makers were prohibited from direct to consumer advertising. See https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2690298/
As low as $87 going through goodrx, there are a few other sites like goodrx that you could check as well.
https://www.goodrx.com/imatinib
It’s amazing the different costs of the same thing.
My daughter needed a prescription filled recently and the cost difference between CVS, Walgreens and the local grocery store pharmacy was crazy. At one place it was $15 and another it was $200. It just depended on which place had captured the discount for that drug.
In any other industry this would be called price gouging and would be highly illegal.
GoodRx isn’t all that cheap any more. Costco often has the best cash prices. You can search for Costco’s price via Google and then use that as a negotiation lever.
Good RX offers good pricing on some drugs but not name brands. Costco is usually the same price or cheaper. You don’t need a membership to Costco to use their pharmacy.
People bash Trump over everything. Some of it’s deserved, but one of the first things he did was try to lower prescription drug costs. He was met with a house and senate that were heavily paid for by the pharmaceutical industry. Both sides of the aisle. A bill never made it to his desk.
Companies have tried to do this over the years. One of the problems is every state has unique laws and bureaucracies that basically give companies like CVS and McKesson a monopoly. The legal and administrative costs to do this in every state is absurd. And then they can expect lawsuits from special interest groups saying this is dangerous. Paid for by CVS et al. I guess they’ll start in California and then maybe Texas or Florida and see where it goes from there. It will likely take decades to do this in every state.
I didn’t know Spain was the healthiest country due to their diets. We are obviously not doing the healthy eating thing so yeah, salute to Cuban. Valiant effort trying to get our pill prices way down…meh.
And pharam has to be either onshored or friendly shored, so that we eliminate our dependence on China. The problem, of coruse, is that with these newer companies pushing prices down so much, this may make onshoring more difficult.
But, making sure America has a stable, affordable & reliable access to a wide range of drugs should be a national moonshot el pronto. Probably won’t happen though.
Go to your nearest hospital. America does not have stable or reliable access to a wide range of drugs. At some point it might be serious enough to get some notice. I know it is happening but not sure why.
I know there’s no reliable access to lethal injection drugs to carry out death sentences. But up in Canada, boy they’ll euthanize just about anyone and probably have a warehouse full of the drugs.
Actually, the promises Trump made about health care vanished from this website the day he was elected.
Read Karl Denninger, https://market-ticker.org/akcs-www?blog=Market-Ticker-Nad , for his plan to lower medical costs, https://market-ticker.org/akcs-www?post=231949. Cost of routine health care in the United States Is ridiculous. Government run health care due to federal protection is illegal but our Department of Injustice won’t do anything. Obamacrap established a floor for medical costs that are much too high. The pathetic Republicans whined about it but didn’t repeal it. How about getting rid of “employer provided” health care and make everyone buy their own insurance in a transparent, competitive market? Having skin in the game should help reduce costs.
The fatties would not like that at all, and they’re the majority now.
Rob wrote “How about getting rid of “employer provided” health care and make everyone buy their own insurance in a transparent, competitive market? Having skin in the game should help reduce costs.”
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Exactly! Too many who receive employer paid health plans (full or partial) are blind to the actual costs. Many more would call for single-payer if they had to bear the full cost of their medical plans.
I believe Trump instituted some kind of regulation requiring hospitals to show their prices for various procedures but it has not been enforced as far as I know.
It is out there on most hospital’s wbsites. Just try to figure it out.
The Truth is that Cuban is likely going to MINT A MINT even though he has done some of us a favor…depending on the Drug. I have suffered with Gout for over 35 years and an example of Congressional absence is the fact that Colchicine, which at one point was a DIME A DOSE — was bought out by a company and they raised the price to $5 a dose. THIS IS LEGAL in America. I chose to buy my doses in Portugal, where the EU does not allow price gouging on Pharma’s. So, Americans, wake up: your Government is absent because they are concentrating their time on LOBBY income….such as the UKRAINE WAR, LAWS, BIG COMPANY BAILOUTS and so on…leaving the poor and middle class in a lurch. THAT is why I WILL NOT VOTE. It is a meaningless feel-good action.
Leave it to the Cuban’s to come up with some pie in the sky idea for humanity. How did that work out for the Cuban people after I Love Lucy was cancelled and Fidel Castro took over.
21% of US GDP is the Medical Industrial Complex. It is growing with no end in sight. How are we going to like it when it is 30% of GDP and the US population is 430 million because of open borders.
Of course I never worry about it, or complain. I just greedily writhe my hands together and figure out a way to profit from it.
I honestly have no idea what you are talking about and therefore, what am I missing – sarcasm, humour, hidden gem? Did you mean wring your hands?
all of the above