Mark Cuban Cost Plus Drug Co. Will Sell Branded Janssen, IBSA Drugs
Mark Cuban Cost Plus Drug Co., the wholesale, direct-to-consumer drug manufacturer and pharmacy launched by the eponymous entrepreneur, will sell brand-name diabetes drugs from Janssen, a division of Johnson & Johnson. Cuban also says that the company will soon sell hypothyroidism treatment Tirosint (levothyroxine). The drugs are the first brand-name products to be sold by the company, which has previously focused exclusively on generics; Cuban says that the company plans to sell whatever brand-name drugs that it can, depending on drugmakers’ interest.
Invokana (canagliflozin), Invokamet (canagliflozin-metformin HCl) and Invokamet XR (canagliflozin-metformin HCl) are now available from the startup, according to an April 3 tweet. Invokana will cost $243.90 for a 30-day supply, while Invokamet and Invokamet XR will each cost $244.20 for a 60-day supply. During a March 23 panel on prescription drug pricing and policy convened by Vanderbilt University, Cuban said that he doesn’t expect to stop at offering just a few brand-name drugs.
Cost Plus “just signed a deal” with IBSA Institut Biochimique SA to sell Tirosint, Cuban said. “That’s our first step,” he added. “We are talking to a lot of brand manufacturers now. We’ll have some announcements in the not-too-distant future. So we will be adding brands.”
Cuban: Formularies Exclude Brands for ‘Ridiculous Reasons’
“Why do brands want to work with us? Because they get excluded from formularies for ridiculous reasons,” Cuban continued. “So now that we’re up past 2.1 million accounts and growing every day, now they [manufacturers] see that we have a base of lives that we cover that we want to reach.”
And “why wouldn’t they? Because there are so many crazy rules that are written into contracts” with plan sponsors and carriers, Cuban added. He gave the example of the NBA’s Dallas Mavericks, which Cuban owns. Cuban says the team operates a self-insured health plan and uses a traditional pharmacy formulary.
“I had them look over 18 months at generics that we [Cost Plus] carry, that cost $30 and over” through Cost Plus, Cuban said. “It was like $165,000 that we had paid” for the generics through the Mavericks’ formulary, “and through Cost Plus it would have been $19,000. And so more and more, we’re getting a lot of self-insured employers, because we’re building that base of lives quickly. We’re adding brands, and we’ll be adding more.”
Market Access for Invokana, Invokamet Is Limited
The market access situation for Invokana and Invokamet (see graphic) seems to confirm Cuban’s theory about manufacturers’ willingness to sell through Cost Plus in order to work around formularies for certain drugs. Both Invokana and Invokamet face prior authorization or step therapy in the majority of commercial formularies administered by CVS Health Corp.’s Caremark, The Cigna Group’s Express Scripts and UnitedHealth Group’s Optum Rx.
Elan Rubinstein, Pharm.D., principal of E.B. Rubinstein Associates, tells AIS Health, a division of MMIT, that “a quick scan of OptumRx, CVS and Express Scripts 2023 formularies findable on the Internet suggests that these medicines are non-formulary….There are other SGLT2 inhibitors available for treatment of diabetes. A check of GoodRx shows that both Invokana and Invokamet (immediate release and ER formulations) cost about $610 for a 30-day supply.”
In other words, lowering the price outside a formulary setting should deliver Janssen volume that didn’t previously exist. However, as STATNews reported, a 2020 Janssen document said the wholesale price for Invokana was $519, with a preferential formulary placement rebate of $313 in that year — making the “payers’ net price,” in Janssen’s coinage, $206. In short, the Cost Plus price is quite similar to the price Janssen hoped to obtain from payers in the first place.
Rubinstein also points out that, with generic competition expected soon for canagliflozin — the active ingredient of all the Janssen drugs — it seems that the company is gambling that making an early play for market share will be more lucrative than keeping the drug away from Cost Plus customers. According to the Pharma Letter, the FDA granted “tentative approval” to Zydus Lifesciences Ltd. “to market canagliflozin tablets, 100mg and 300mg.”
“Assuming the generic is launched this year, that will surely undercut the brand’s current price, and make the originality of brand availability through Cuban Cost Plus Drugs short lived,” Rubinstein says.
In addition, “An insured diabetic patient for whom the physician wants to prescribe an SGLT2 inhibitor should do the math on whether he/she is better off being prescribed an on-formulary SGLT2 and paying the copay rather than paying the cash price,” Rubinstein says. “Assuming the patient meets the plan’s deductible not too far into the benefit year, the subsequent cost-share would likely be significantly lower than the cash price, and the overall annual cost would be less than a fully cash price, as would be the case through Cuban Cost Plus Drugs.”
Contact Rubinstein at email@example.com.
Current Market Access to Invokana, Invokamet
By Jinghong Chen
NOTES: Under the pharmacy benefit, CVS Health Corp.’s Aetna and its Caremark PBM cover 28.9 million, 71,000, 8.4 million and 899,000 lives under commercial, health exchange, Medicare and Medicaid formularies, respectively. Cigna Corp. and Express Scripts cover 32.1 million, 463,000 and 3.2 million lives under commercial, health exchange and Medicare formularies, respectively. Information about coverage under Medicaid formularies is not available. UnitedHealthcare and Optum Rx cover 22.9 million, 358,000, 11.9 million and 2.6 million lives under commercial, health exchange, Medicare and Medicaid formularies, respectively.
“Preferred” refers to a product that a plan defines as covered at the lowest level copay for brand products and most commonly includes preferred brands. “Covered” refers to a product that a plan defines as covered at a higher copay and most commonly includes non-preferred brand products.
SOURCE: Managed Markets Insight & Technology, LLC database as of April 2023.