"You've got one industry that's fucked up and three players that fuck it up and now it's my turn to fuck them up."
In just 9 months, Mark Cuban's pharmaceutical company has generated over $25M in revenue while saving people millions of dollars.
Here's how they did it:
In just 9 months, Mark Cuban's pharmaceutical company has generated over $25M in revenue while saving people millions of dollars.
Here's how they did it:
The Mark Cuban Cost Plus Drug Company business model is simple — Cut out all the drug pricing shit.
@mcuban and his team set out to push into the generic drugs market and cut out the middlemen.
Then, they would sell those drugs for just slightly more than it cost to make them.
@mcuban and his team set out to push into the generic drugs market and cut out the middlemen.
Then, they would sell those drugs for just slightly more than it cost to make them.
To compare, this is how the pharmaceutical market currently works:
Let's say a manufacturer invents an amazing new drug to treat epilepsy. They want to get their drug into the hands of the patients that need it.
So, they have two different means of distribution:
Let's say a manufacturer invents an amazing new drug to treat epilepsy. They want to get their drug into the hands of the patients that need it.
So, they have two different means of distribution:
The first is through Pharmacy Benefits Managers, who negotiate with the manufacturer on behalf of insurers.
Patients want this seizure medication. The manufacturer wants insurance to cover the drug.
The PBM will broker a deal between the two and take a fee for their services.
Patients want this seizure medication. The manufacturer wants insurance to cover the drug.
The PBM will broker a deal between the two and take a fee for their services.
The manufacturer can also sell their drugs to a Group Purchasing Organization (wholesaler), who then supplies the seizure meds to several pharmacies and medical facilities.
The GPO negotiates pricing with the manufacturer on behalf of these facilities and takes a fee as well.
The GPO negotiates pricing with the manufacturer on behalf of these facilities and takes a fee as well.
With this system, manufacturers don't have to deal with the headaches of trying to self-distribute.
Supply chains are messy, low-margin businesses and they're best left to the professional wholesalers...
Until @costplusdrugs came along.
Supply chains are messy, low-margin businesses and they're best left to the professional wholesalers...
Until @costplusdrugs came along.
See, MCCPDC has three different components to address this market:
The first is their own Pharmacy Benefits Manager division that negotiates with the manufacturers of ~1,000 generic drugs.
Those insured under Rightway and Capital Blue Cross have access to all MCCPDC drugs.
The first is their own Pharmacy Benefits Manager division that negotiates with the manufacturers of ~1,000 generic drugs.
Those insured under Rightway and Capital Blue Cross have access to all MCCPDC drugs.
The second component is a mail-order pharmacy launched in collaboration with @truepill_rx.
The MCCPDC pharmacy can fulfill prescriptions for generic drugs and sell them direct-to-consumer.
This doesn't replace the GPO, it eliminates it!
The MCCPDC pharmacy can fulfill prescriptions for generic drugs and sell them direct-to-consumer.
This doesn't replace the GPO, it eliminates it!
The third component (and the key to true vertical integration) is a manufacturing facility where MCCPDC can take pharmaceutical formulations for generic drugs and become their own suppliers.
So far, they've invested $11M to build a 22K square foot manufacturing plant in Dallas.
So far, they've invested $11M to build a 22K square foot manufacturing plant in Dallas.
With vertical integration, MCCPDC can offer drugs at a STEEP discount from current prices.
Their consumer pricing model is very straightforward:
Manufacturing costs (COGS) + 15% margin + $3 charge for pharmacy fulfillment.
That's it.
Their consumer pricing model is very straightforward:
Manufacturing costs (COGS) + 15% margin + $3 charge for pharmacy fulfillment.
That's it.
For example, Imatinib (Gleevec) is a common leukemia drug that typically retails for over $9,600 a month.
With a drug voucher, it costs about $120 month.
From MCCPDC, Imatinib is just $47 a month.
With a drug voucher, it costs about $120 month.
From MCCPDC, Imatinib is just $47 a month.
Already, MCCPD has helped thousands of consumers save hundreds of dollars PER MONTH over other generic drug options.
By developing a reputation based on honesty and transparency, the company is doing the impossible — building trust with their patients.
By developing a reputation based on honesty and transparency, the company is doing the impossible — building trust with their patients.
For now, the model is limited to generic drugs.
But, as Cost Plus grows, they plan to partner with innovator companies like Moderna or Pfizer.
MCCPDC can act as a manufacturer + distributor while providing the data necessary to market & commercialize drugs more efficiently.
But, as Cost Plus grows, they plan to partner with innovator companies like Moderna or Pfizer.
MCCPDC can act as a manufacturer + distributor while providing the data necessary to market & commercialize drugs more efficiently.
After less than a year in business, the company is growing at 10% week over week (!!) and over 1.2 million people have created accounts.
Through a powerful personal brand and a thoughtful business model, MCCPDC is building one of the most promising new startups in pharma.
Through a powerful personal brand and a thoughtful business model, MCCPDC is building one of the most promising new startups in pharma.
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