Pharmaceutical Drugs at Cost + 15%? It’s Here Now

Yves here. Never say all billionaires are always bad. Mark Cuban’s new drug venture is out to break Big Pharma price gouging. But even on a quick gander, it has some meds only in limited strengths, and generally well below what an MD would prescribe. So the gaps are still pretty large.

By Thomas Neuburger. Originally published at God’s Spies

“The law has become a tool for every kind of greed.”
—Frederic Bastiat

“The basic principle of capitalism: To each according to what they can grab. From each according to what they have to lose.”
— Yours truly

It’s Medicare Month, and Medicare plan enrollments are occurring across the country. Those eligible are enrolling in Real Medicare (Parts A and B), Hybrid Medicare (the Medigap plans available under Part B), and Phony Medicare (the deceptively but legally labeled Parts C and D).

Part C is called “Medicare Advantage,” but it’s neither Medicare nor advantageous. Part D covers drugs, and it’s also not Medicare, but a private insurance scam instead passed into bipartisan law during the Bush II presidency.

Which means, this year again, that millions of Medicare-eligible victims of Big Pharma will have to 1) guess what drugs they’ll need for the following year, and 2) pay morally criminal prices for them.

Which makes this an appropriate time to talk about drug prices in America — and finally, a solution to them. Sadly, it’s a market-based solution, which means it could disappear. Happily, it’s a solution that will work if it’s allowed to proceed.

The Goal of Capitalism Is to Destroy Markets, Not Preserve Them

This is the wrong place to go in depth about capitalism and markets, but the essence is this: Free markets are only the stated goal of capitalists, their cover story. Real capitalists, the mega-successful kind, always aim to destroy markets by dominating them via monopolies, or gaming them via capture of the rule-making apparatus.

Sometimes that capture means taking over some private mechanism, for example, the New York Stock Exchange, where the rules are written to benefit “market makers” who then manipulate stock prices. Sometimes that capture means taking over governmental regulation, for example, writing laws that allow massive markup on, well, almost everything you buy, from cable TV to electricity from the grid to, yes, drugs and pharmaceuticals.

Mark Cuban’s Cost Plus Drugs

Which brings us to the new (as of 2022) venture from billionaire and Shark Tank investor Mark Cuban. The company name is Cost Plus Drugs, and its goal is simple. From their website:

We started Mark Cuban Cost Plus Drug Company because every American should have access to safe, affordable medicines. If you don’t have insurance or have a high deductible plan, you know that even the most basic medications can cost a fortune. Many people are spending crazy amounts of money each month just to stay healthy. …

If you are fortunate enough to have health insurance with a low deductible, the high cost of drugs is driving up the premiums that you or your employer pay, making getting health insurance expensive and challenging. The Mark Cuban Cost Plus Drug Company takes these problems head on.

The plan is to “disrupt the drug industry and to do our best to end ridiculous drug prices.”

Normally the drug prescribed for hookworm, Albendazole, can cost as much as $500 per course, making the drug out of reach for many in need. …

Our cost for Albendazole is $26.08 per course. We mark that price up by 15% so we can continue to run the company and invest in disrupting the pricing of as many drugs as we possibly can.

That makes the base price of the drug $30. Then we add on the actual cost, $3.00, that our pharmacy partners charge us to prepare and provide your prescription to you.

That makes the sales price on this website $33. Far, far lower than the pricing available in the marketplace.

From $500 to $30 is quite a savings, and includes, if you believe in a capitalist -controlled drug supply, an entirely reasonable profit of 15%. It’s even more for pricier drugs. From Becker’s Hospital Review:

The latest additions to Cost Plus Drugs include deferasirox, a generic for iron reducer Jadenu. Jadenu typically costs $2,332.80, but the generic tablet costs $15 at Cost Plus Drugs — making for the company’s second biggest price reduction.

That’s a 99.3% reduction. Imagine what Americans could do with that money. In a recession.

Sample Drug Prices from Cost Plus Drugs

Not all drugs are available yet, including insulin, but a great many are. Here are some example prices and savings from their “Medications” page.

Let’s start with something dear to American male hearts, Viagra and Cialis:

Or for women, birth control, just part of the list and sorted by retail price, highest first:

Starting to look attractive? Another set, this time for blood thinners. Note the price of Plavix, down from $60 to $5:

And finally, a truly eye-opening set of cancer drug price reductions:

For some of these medications, the cost goes from 1000s of dollars to less than $50 for the same quantity. The usual prescribed dose of Abiterone, at the top of the above list, is four tablets per day, or $4000 per month retail.

A Growing Concern to Address a Growing Concern

As I said, not all drugs are available from this supplier, but they’re adding new medications as fast as they can. Their FAQ says they don’t carry brand or “specialty” drugs — yet — but this is a great start. And they do plan to get into drug manufacturing.

You can help by requesting drugs and asking to be notified when they’re available:

The company already has over a million customers.

Personally, I think when insulin becomes available, it will be a milestone. And if California succeeds in manufacturing its own insulin, creating its own supply, look out.

How This Could Fail

You’ll note that I said the attempt to disrupt “will work if it’s allowed to proceed.” Here’s how the project could be made to fail:

1. Cuban is doing this because he wants to. What if he no longer wants to? Or worse, what if his company is bought and made to disappear?

2. The other avenue for failure is via the government, by which I mean the legalized bribery process called lobbying. Big Pharma could simply go to their agents — sorry, employees — sorry, cooperative public servants in Congress and find a way to put Cost Plus Drugs out of business. Legally. I’m guessing the phrase “unfair competitive advantage” will come up.

Consider the example of the aerospace company Hughes Aircraft, which operated for years as a non-profit until it was destroyed (forced to become a for-profit company) by agents of its competitors following Howard Hughes’ death.

3. The final way the company could be destroyed (or forced to “stand down”) is one you typically see only in novels. A horse head in the bed. An untimely porn stash release or small plane accident. The long blackmailing arm of the security state.

But those things don’t occur in our own world, surely. If they do, the news hasn’t made it to New York Times.

In the meantime, I’m betting hard on Mark Cuban’s traitor-to-his-class integrity, at least as this instance reveals it. May his venture succeed beyond his, and our, wildest dreams.

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  1. VT Digger

    My mother just went through this and I stepped in to see how scamy things had become. Far worse than I could have imagined. Both Medigap and Advantage plans are trash that leak like a sieve. Honestly both are so bad it almost doesn’t matter which one you pick. Mom chose to roll the dice and go with advantage even though it doesn’t cover Cancer, Kidneys, or Prosthetics. Hoping none of those go out this year!

  2. Spider Monkey

    Like any business entering a new market with any bit of strategy, you come in low and raise prices over time. Is anybody auditing the cost of the drugs? I know when people don’t like my markups I make the cost of work look higher unless I have to sign a sworn statement or affidavit. Regardless, the people who can buy through this should be taking it while they can get it and certainly stocking up if at all possible.

    1. Jokerstein

      The problem here for Cuban if he wants to gouge later is that he has already established that this can be done at low cost. Barriers to entry are (currently) low.

      It’s pretty easy money for little work, if you have the spare cash slopping around.

  3. Kyle

    I wonder if they are part of the 340b program which would explain part of how they can offer drugs at those prices.

    Big Pharma has been trying to kill the 340b program for years because it exposes them – they can make money selling at a lower price (the program is proof) but they want to keep charging the higher price.

  4. Samuel Conner

    I welcome any reductions in prices of medications.

    Having said that, …

    I disagree with the framing about taking meds “to stay healthy” — that’s a IMO twisted vision of “health”; people are taking their meds to avoid death, disability or physiological misery — some of which is inflicted on them by very system of ‘civilization for the sake of enterprise profit’ they are trapped in.

    I also cynically suspect that “under the hood”, this move may be an attempt to head off not-for-profit pharma that sets product prices even closer to cost.

    Or maybe to head off the “Five Thieves Vinegar” approach.

    It would be a terrible thing, from the perspective of our elites, to drive all the profit out of generic commodity pharma production.

    1. Arizona Slim

      Heartily agree, Samuel!

      I am one of those rare birds who takes no drugs, and, yes, I am rocking a Medicare card. (For the record, it’s classic rock traditional A and B with the G-D add-ons. And I am using the G-D epithet deliberately.)

      I work very hard on my health, and I consider this to be the most essential effort I make in this world. It isn’t easy, but the rewards? Holy cow. More than worth it.

  5. Jokerstein

    Been using this for a few months now. The cost of three months’ supply of each of the two medicines I take is less than 50% of the copay for a single month’s supply with my insurance (UHC high deductible).

    Love this – the positive side of capitalism.

  6. Mark Roberts

    I use this service. I have ME/CFS (similar to long covid) and some other issues and have 12 prescription medications. They don’t have everything but what they have is sometimes cheaper than insurance! Read that again. Yes, it’s cheaper than the drug’s list price but CPD pricing is ALSO sometimes cheaper than the cost would be if I used my insurance!!

    I was skeptical as hell about Cuban but this dude is doing what so many people have been talking about for so many years. If he succeeds, god love him…

    I assume there will be growing pains as they scale up — never an easy thing to do, but so far I’ve gotten everything I ordered at the price they quoted, in a few days through the mail.

    I’ve shifted all but 3 of my prescriptions away from the CVS & insurance hellscape to CPD and it’s saved me hundreds and hundreds of hours (this is the part that well people don’t understand) in addition to the cost…

    1. judy2shoes

      Hi Mark,

      I noticed on the Cost+ website that shipping is $5.00 for an Rx, and I am assuming that if there were more items in the order, it wouldn’t be $5.00/item. Is that correct?


  7. Dida

    It’s a political gimmick. Mark Cuban’s fortune is estimated at $4.8 billion; you don’t become an American billionaire by choosing to forgo profit. I’m guessing he’ll be running for presidency soon, which doesn’t surprise me, considering the advanced state of decomposition of the Republic.

    I checked his Wikipedia page and it turns out that I might be right. In September 2015, Cuban stated in an interview that running for president was “a fun idea to toss around”, and that, if he were running in the 2016 U.S. presidential election, he “could beat both Trump and Clinton”.

    Don’t forget that Bloomberg competed in 2020. Our billionaire overlords have become so powerful at this point that controlling the presidential puppet from behind the scenes doesn’t do it anymore. Plus what else is there to covet? They already own the land, the forests, the factories, the patents, the money, the media, and are playing chess with the fate of nations. Imagine the hubris.

  8. John Beech

    I’ve shared this article with friends, Yves. Perhaps some will stop and look at Naked Capitalism as a whole instead of just this article. People, of course, only do what’s in their interests so I don’t push. However, I urge reviewing Links, which is a 7AM daily drop.

    So here’s a thought for you; how about a more in-depth story about Advantage Plans? For example, I turn 65 in a few months. Until then, each month I write a check in the amount of $1879 to Cygna, my ‘provider’. Meanwhile, turns out if I wait until after my birthday to sign up for Medicare, I’m not eligible until the following month – but – because their rules allow me to sign up as many as 3-months ahead of my birthday, then this makes me eligible for Medicare coverage the actual month of . . . which even if you’re bad at math means I will save close to $2000 for my trouble.

    For many, that one month’s premium represents the utility bill through winter, maybe longer. So it’s real money just by knowing the rules. I suspect there are other gotchas that could be brought to light.

    Meanwhile, what are other ways of knowing Advantage plans are a scam? Simple, the advertisers come out of the woodwork (those adverts cost serious money). Another way is how they use language to hook the unsophisticated like, ‘get what you deserve’, or, ‘get money for certain ZIP-codes’, or ‘get money back each month’, or, ‘zero-cost-to-you’, which is quite different than zero-cost unless you’re accustomed to how language is used to move people’s opinions and shape their thinking.

    What other ‘tells’ are there if you’re even a little bit savvy of the magnitude of the scam? Simple, it’s in the language, again. Like how they mention you should call each year to see if your doctor is still in network, or to learn if deductibles have gone up.

    Me? I’ve been seeing the same doctor for 20 years. I have zero interest in changing, but this language on their part makes it clear – to me – this is a risk I’d run if I signed up for an Advantage Plan . . . sounds more like Disadvantage Plan to me! I mean, would you want to change from your trusted physician just because they’re now out of network? I certainly wouldn’t!

    So look into it Yves, then strut your stuff with an article exposing the gotchas.

    1. Angie Neer

      Careful, John. Assigning work to to our host is not a wise path. As well, a search for “Medicare Advantage Scam” brings up many good links.

      1. Arizona Slim

        This site has covered the MA topic to the nth degree. Here is one of many posts:

        BTW, I was paying oodles of money to Blue Cross/Bull[family blog] and their coverage wasn’t worth [family blog].

        Thanks to Naked Capitalism, I stayed the [family blog] away from Medicare Advantage. I’m doing traditional, classic rock Medicare, and I’m saving around $500 a month vs what I used to pay to BC/BS.

  9. JBird4049

    I certainly do hope that they provide insulin soon. While I do not need it, even though it has been available as a medicine for a century and it is dirt cheap to make, too many people are suffering or even dying because they cannot afford it.

  10. rjs

    fwiw, today’s 5.4% increase in our October trade deficit was all pharmaceuticals; there was a $2,199 million decrease in our exports of pharmaceutical preparations and a $2,722 million increase in our imports of pharmaceuticals on a $4.0 billion increase in our trade deficit…

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