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You have accessJournal of UrologyJU Forum1 Feb 2023

Urological Drug Price Stewardship: Potential Cost Savings Based on the Mark Cuban Cost Plus Drug Company Model

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    U.S. health care costs rank among the highest in the world with recent national health expenditures reaching approximately $4.124 trillion during 2020 alone.1 Although questions remain on what factors drive the difference in total U.S. health spending compared to other nations in the Organization for Economic Cooperation and Development; as Anderson et al eloquently stated in their seminal yet provocative piece, “it’s the prices, stupid.”2 Indeed, higher prices in the U.S. compared to other Organization for Economic Cooperation and Development nations for equivalent hospital admissions and prescription drugs are major driving factors for higher costs.2,3

    As of 2020, spending on prescription drugs alone amounted to $348.4 billion, contributing to 8.5% of the national health care expenditure in the U.S.1 Although much has been speculated as to why this is the case—subsidization of patented drug in foreign countries, monopolistic pricing for patent-protected drugs to recoup losses from development costs, lack of Medicare negotiating power—the impact remains the same. U.S. prescription drug prices place a significant burden on payers, providers, and especially patients.

    In urology, many of the drugs we prescribe are crucial to enhancing the quality of life of our patients, spanning sexual health through erectile dysfunction medications and vaginal estrogen to treating prostate cancer with androgen deprivation therapy. Our field must remain committed to surmounting barriers when addressing our patients’ genitourinary health. We provide an overview of the contemporary landscape for patient access to prescription drugs and their issues as well as the potential beneficial effect of the introduction of the Mark Cuban Cost Plus Drug Company (MCCPDC) on Medicare savings.

    Contemporary Access to Prescription Medications and Issues

    Currently, most patients purchase prescription drugs through insurance companies as a benefit or by paying out of pocket. Depending on insurance type and level of coverage, patients endure cost sharing that manifests in several ways: prescription deductibles that must be met before coverage starts, tiered co-pay systems charging a flat fee per prescription, coinsurance plans charging a percentage per prescription, and out-of-pocket maximums providing financial safety nets. Out-of-pocket retail cost of drugs for patients both with and without insurance, especially if not compensated for by drug manufacturers or charitable organizations, can be prohibitively expensive with high medication costs associated with nonadherence and emergency department admissions.4

    A common option for accessing cheaper prescription drugs is through companies that offer coupons, such as GoodRx, RxSaver, and SingleCare, who operate by comparing local drug prices by pharmacy to find current prices and discounts, offer free coupons, and pass savings on to the patients. However, coupons offered may be subject to price changes, expiration dates, or vary by geographical location, and when patients feel more financial burden from their insurance plan’s cost sharing design, they indiscriminately cut back on both high- and low-value care.5

    MCCPDC Offers Significant Savings to Patients

    Founded in January 2022 by Mark Cuban and Alexander Oshmyansky, the MCCPDC is a public benefit corporation focused on the manufacturing and distribution of low-price generic drugs. It currently collaborates with Truepill Pharmacy to access accredited pharmacists for prescription fulfillment.6 The company prides itself with transparent pricing following a cost-plus pricing strategy manifesting as a 15% markup on the cost of manufacturing, a $3 pharmacy service fee, and $5 direct-to-consumer shipping across the U.S.6 By vertically integrating, forgoing marketing spending on their drugs, and offering a cost-plus pricing strategy, MCCPDC has decreased its prices in a reliable and patient-centric manner.

    Study Design

    We identified the 9 most utilized oral drugs in urology by volume using the 2020 Medicare Part D spending data that were also available through MCCPDC. For these 9 drugs, we identified the price through MCCPDC (including the pharmacy dispensing/shipping fee) for the minimum (30 count) and maximum (90 count) quantities available. We calculated 2020 Medicare Part D spending for these drugs; to maintain a conservative estimation, when multiple dosage strengths were available from MCCPDC we selected the most expensive option. Similar to Lalani et al, we calculated the potential Medicare savings as the difference in either standardized 30-day or 90-day unit price between Medicare and MCCPDC, multiplied by the volume-adjusted number of units dispensed to Medicare enrollees in 2020 using publicly available data in the Medicare Part D Prescribers by Provider and Drug data set.7

    Results

    The top 9 oral urology drugs that were studied in descending volume order of 30-day prescription fills included: tamsulosin, finasteride, oxybutynin, alfuzosin, solifenacin, tolterodine, sildenafil, tadalafil, and abiraterone. Overall, the incurred 2020 Medicare cost for these 9 drugs approximately totaled $1.565 billion.

    All 30-day prescription drug prices offered by MCCPDC, except for tamsulosin and finasteride due to their already low average cost per 30-day prescription, generated cost savings for Medicare. In these 2 cases, the $5 shipping charge per 30-day prescription served as a defining factor for whether MCCPDC generated cost savings or not. The percentage of cost savings for the 30-day prescription model ranged from −16.9% to 98.9%.

    For the 90-day prescription prices, all drugs generated cost savings for Medicare as seen in the Figure. The percentage savings ranged from 48.7% to 99.2%. Of note, the savings for abiraterone alone amounted to $656 million or nearly 52% of all potential Medicare savings for urology drugs in both our 30-day and 90-day prescription model.

    Figure.Projected 2020 cost of 90-day prescription filling compared to 2020 Medicare costs for 9 common urology drugs. MCCPDC indicates Mark Cuban Cost Plus Drug Company.

    Figure. Projected 2020 cost of 90-day prescription filling compared to 2020 Medicare costs for 9 common urology drugs. MCCPDC indicates Mark Cuban Cost Plus Drug Company.

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    Discussion

    By manufacturing generic prescription drugs at a cost-plus pricing scheme, MCCPDC has been able to pass on significant savings to its customers and reduce financial toxicity associated with prescription drugs. However, patients are not the only beneficiaries of a significantly cheaper option for prescription drugs. In a shifting health care landscape, providers are increasingly responsible for being stewards of high-value care. MCCPDC’s emergence as a new competitor into a marketplace that has been historically dominated by an oligopoly of pharmaceutical manufacturers and pharmacy benefit managers generates new perspectives on delivering high-value patient care.

    These results should shed a positive light on what impact MCCPDC can have on the prescription drugs at the market level, especially for Medicare beneficiaries. A recent study published in July 2022 by Lalani et al had shown that if Medicare had purchased generic drugs offered by MCCPDC in 2020, the U.S. government would have saved between $1.5-3.3 billion depending on the quantity purchased.6 As seen in our analysis of urological medications, MCCPDC has the potential to save Medicare hundreds of millions of dollars depending on the drug. Although we assessed 9 urological oral medications, vaginal estrogen, commonly used to treat genitourinary syndrome of menopause and recurrent urinary tract infections, likely also carries significant cost savings in MCCPDC. However, due to lack of granularity regarding oral, vaginal, and cream applications of estrogen, we were unable to include this in our analysis. For patients who are self-insured or uninsured, or even those whose medications are tightly regulated by pharmacy benefit managers, MCCPDC may increase access to affordable prescriptions.

    Conclusion

    In this brief study, we describe a potential savings of approximately $1.29 billion in 2020 if Medicare prices for generic drugs were as low as those offered under MCCPDC. We encourage providers and their practices to add this company to their list when counseling patients on how to access and pay for their medications.

    Acknowledgments

    We thank Dr Stacie Dusetzina, Professor in the Department of Health Policy at Vanderbilt University, for her assistance with this analysis.

    References

    Submitted October 21, 2022; accepted November 15, 2022; published November 22, 2022.

    Support: None.

    Conflict of Interest: The Authors have no conflicts of interest to disclose.

    Ethics Statement: This study was deemed exempt from formal review by the Vanderbilt University Institutional Review Board (IRB No. 221956).

    Author Contributions: Conception and design: BDC, RT, SSC; data analysis and interpretation: BDC, RT, SSC; data acquisition: BDC; drafting the manuscript: BDC, RT, SSC. All authors reviewed the results and approved the final version of the manuscript.

    Data Availability: The data sets generated during and/or analyzed during the current study are available in the public Medicare Part D Prescribers by Provider and Drug data set (https://data.cms.gov/provider-summary-by-type-of-service/medicare-part-d-prescribers/medicare-part-d-prescribers-by-provider-and-drug) as well as the Mark Cuban Cost Plus Drug Company website (https://costplusdrugs.com/medications/).

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