Famed billionaire Mark Cuban is entering the world of pharmacy benefit management.
The Mark Cuban Cost Plus Drug Company PBC is launching a PBM company in an effort to provide lower-cost prescription drugs. The Purchaser Business Group on Health (PBGH), a nonprofit coalition of nearly 40 large public and private employers, is also starting a PBM, according to The Wall Street Journal, which first reported the news.
PBMs are considered the middlemen of the pharmaceutical industry, negotiating prices and payment processes, plus availability, between employers, labor unions and governments with pharmacies. PBMs also negotiate rebates to customers, though the companies have come under fire for lack of transparency regarding rebates.
The new PBMs aim to be more transparent about negotiated rates with customers.
“Pharmacy costs for both public and private purchasers have been the leading cost driver…and the traditional PBMs were simply unresponsive to their concerns,” Elizabeth Mitchell, chief executive of PBGH, told the WSJ.
Cuban’s company intends to sell generic drugs at a transparent fixed-rate markup, and the company is accomplishing this by doing it all. The Mark Cuban Cost Plus Drug Company PBC is creating all-in-one pharmaceutical supplier, combining manufacturing, wholesale distribution and pharmacy services under one roof, WSJ reported.
However, the company faces an uphill battle getting customers, as most prescriptions are managed by just three PBMs––CVS Caremark, Express Scripts and OptumRx, owned by UnitedHealth Group.
PBMs have been in the spotlight over the past few years as lawmakers have considered addressing soaring drug costs. The Trump administration even proposed doing away with the rebate system altogether.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."