Scientists have published a paper finding that if US government health insurance provider Medicare bought 77 generic medications from Mark Cuban’s drug company, it could save $3.6 billion annually.
Billionaire entrepreneur Mark Cuban founded Mark Cuban’s Cost Plus Drug Company last year, with the mission of radically driving down the price of widely-prescribed medications by offering generic versions with less overhead. Life-saving prescription drugs in the United States are often too expensive, especially for people without insurance.
Cuban’s drugs are priced by the cost of ingredients and manufacturing, plus a 15 percent margin, $3 pharmacy dispensing fee, and $5 shipping fee. This can often be half, even a quarter, of what name brand drugs cost.
Selling generic ingredients without patented manufacturing or formulas is dramatically dropping the prices of drugs like Actos - prescribed for patients with diabetes and retailing at $74.40 - to $6.60 for 30 pills. The generic version of Apriso - prescribed for patients with gastrointestinal disease and sold for $122.70 at standard pharmacies - goes for $36.60 for 30 pills.
It’s the easiest explanation in the world to answer why spending on drugs in America, as one study found, exceeds that in all other countries.
The new study from Harvard concluded that “our findings suggest that Medicare is overpaying for many generic drugs,” and CNET reports that since its publication, Plus Drugs had added a bunch more medications. Hassan Leilani, lead study author, admitted $3.6 billion is probably a conservative estimate.