One Texas-based company, bankrolled by billionaire businessman Mark Cuban, is trying to solve the problem in part by making its own drugs. The Mark Cuban Cost Plus Drug Company looks to cut out the many middlemen involved in the sale of generic prescription drugs, instead buying them directly from the pharmaceutical companies and selling them almost at cost. It is also developing a facility in Dallas where it can manufacture drugs from scratch, which is expected to open next year.
“We’re kind of trying to bypass the middleman and the pharmaceutical supply chain, trying to bypass the cartel that inflates the prices,” said Dr. Alex Oshmyansky, the company’s founder. “And we’ll pass on the savings that cut out the middleman to the patients, the people that actually need it at the end of the day.”
Cost Plus’ first product was Albendazole, an antiparasitic drug used to treat hookworm infections. By going directly to the manufacturer, the company was able to bring the drug’s price down from $225 per tablet to $20 per tablet. Cost Plus says it hopes to add more than 100 other drugs by the end of 2021.
Cuban told CNN Business in an email that he invested in Cost Plus “[because] it’s obscene how much pharma companies over charge for generic drugs and how they do everything possible to hide their overcharging.” Attaching his own name to the company was a bid to raise more awareness, he added.
The goal, he said, is “to bring the prices down for as many generic drugs as we can and to be completely transparent about it so people start to understand how the industry works [and] why we are disrupting it.”
“I was and still am a practicing physician and was just pretty upset about that,” Oshmyansky said. “So I decided to go on kind of a tangent [to] try to fix it.”
The controversy around Shkreli highlighted another big issue with the US pharmaceutical industry: brand-name drugs are essentially protected from competition for 20 years once they are patented.
“For brand name drugs, where there isn’t much competition, there’s not a whole lot that’s keeping those prices down,” Mulcahy said. “And so you can get into situations where patients and their health insurers are on the hook for thousands, tens of thousands of dollars for some of these expensive specialty drugs.”
“There’s an important reason to give companies an opportunity to set prices somewhere above what it costs them to make the drug and recoup their investment in R&D,” Mulcahy said. “At some point, though, that needs to end. We need to get into a world where there’s more competition and lower prices.”
In the meantime, companies such as BetterMed are stepping in. BetterMed offers loans with 0% interest to help patients cover drug costs and broader medical expenses, allowing them to pay it back over as many as 15 years. The company, which makes money by charging a fee to doctors it works with, says it frequently gives loans of tens of thousands of dollars.
“We’d like to help people make medical care affordable,” said Joseph Sussman, director of operations at BetterMed. “But our hope is that with time, maybe we can be a catalyst to the system ultimately changing, because as it stands right now, this system is just … not sustainable. It’s getting more expensive year after year.”
Encountering another big issue with the prescription drug market led Doug Hirsch to create GoodRx around a decade ago.
“I had the experience of taking a prescription into a pharmacy and the pharmacist said it would be $500, and I hadn’t talked to my doctor about that. That seemed like an extraordinary price,” Hirsch told CNN Business. “And so I took the prescription back and I went to a few other pharmacies, and I found way different prices — $250, $400. And I thought there’s got to be a better way. If I can compare prices for travel and for electronics, why can’t I compare prices for health care?”
Now, Hirsch says, GoodRx helps more than 20 million Americans save money on prescription drugs and healthcare each month, and has saved its users more than $30 billion since its inception.
“The challenge with health care in this country is it’s so complicated and so confusing that a lot of people just don’t know what to do,” he said. “For over a decade now, most of my conversations with people have been just showing them that there’s a better way than just showing your insurance card at the pharmacy.”