Mark Cuban’s Cash Pharmacy Launches Amid Strong Competition

Mark Cuban Cost Plus Drug Company (MCCPDC) launched its online, generic-dispensing pharmacy on Jan. 19, becoming the latest entrant into a burgeoning market of prescription drug retailers that operate independent of traditional pharmacy benefits. Health care insiders say that the amount of activity in the emerging segment is encouraging, but they add that no one player is likely to become dominant in the space.

MCCPDC, a discount prescription drug startup launched by venture capitalist and Dallas Mavericks owner Mark Cuban, now operates an online pharmacy that sells directly to consumers and does not accept insurance. MCCPDC CEO Alex Oshmyansky, M.D., Ph.D., told AIS Health, a division of MMIT, in October that the firm is registered as a pharmaceutical wholesaler with the FDA.

“Our plan is basically to reveal all of our costs to the public — salaries, IT expenses — and pledge that the amount of money we’re going to make is equal to our expenses plus 15%,” Oshmyansky said. According to a Jan. 19 press release on the launch of the online pharmacy, “the pharmacy’s prices reflect actual manufacturer prices plus a flat 15% margin and pharmacist fee.”

The firm also revealed a deal with Truepill, an ecommerce white label pharmacy startup, to manage MCCPDC’s fulfillment: “With the help of digital healthcare company Truepill, patients can expect a seamless, secure e-commerce experience as they navigate the pharmacy’s website, built and powered by Truepill’s digital health platform. Patients will also enjoy reliable prescription fulfillment and delivery through Truepill’s nationwide pharmacy footprint.”

The press release also touted large savings, claiming that Imatinib, a kinase inhibitor used to treat leukemia, would cost “$47 per month” when bought from MCCPDC versus a “retail price” of $9,657 per month, or $120 per month with a “common voucher.” However, the MCCPDC website listed a different price on an Imatinib product page, $17.10 for “a 30-count supply of 100mg Imatinib.” The component costs of that price were $12.00 for “manufacturing,” a 15% markup of $2.10, $3.00 for “pharmacy labor” and $5.00 for “shipping.”

Are Transparency Claims Overstated?

Elan Rubinstein, Pharm.D., principal of EB Rubinstein Associates, tells AIS Health via email that he believes MCCPDC is overstating the transparency of its pricing model.

“So Cuban’s company is a generic drug manufacturer, a drug wholesaler, and also an online mail order pharmacy? Where does Truepill fit? Really, Cuban is going to grab market share from each of these parts of the pharmaceuticals market? All at once? I don’t believe it,” Rubinstein writes.

“I don’t have access to net pricing data at the retail pharmacy level. Without that, I cannot evaluate whether the information in the press release is accurate or bogus,” Rubinstein added. “My understanding of generics acquisition pricing is that the generic list price is typically discounted 80-90%, meaning that the list price is meaningless. In this respect, Cuban’s company is right, that’s nonsense. But it’s meaningless for Cuban’s company to set a true net price for its generics and say, ‘hey, look at how we compare to generic list price!’ That’s bogus because generic list price is meaningless. The Cuban news release claim about generic pricing with a ‘common voucher’ is also meaningless, as that is on the patient/purchaser side, not the retail pharmacy acquisition side.”

Brian Anderson, a principal at Milliman, Inc., also sounded a skeptical note, pointing out that generics are already the most affordable portion of the prescription drug market.

MCCPDC “is a fancy combination of Amazon’s approach and GoodRx in a one stop pharmacy that helps solve for [generics, which account for] about 15% of the total drug spend for a typical employer,” Anderson tells AIS Health via email. MCCPDC “is focused on the lowest expense portion of the market [and] simplifies the claim adjudication and dispensing processes to provide low-cost generics. This approach is an avenue to improve pricing for low-cost items, but it does not solve for the administration side and what to do for specialty, limited disruption, and brand name products. Generics are currently the smallest portion of the overall costs, and lowering costs can provide a short-term Band-Aid but not a long-term solution. An estimated 85% of [drug] spend falls into the other categories.”

“This type of pharmacy is good to challenge the market to be innovative and pushes the best option of low-cost generics, but it does not solve for the broader issue of lowering pharmacy spend,” Anderson adds. “The United States has a utilization issue that is bigger than the pricing issues. This can only be solved by consumerism through changing the landscape, adjudication processes and access to information.”

MCCPDC May Be New Example of Old Idea

Ashraf Shehata, national sector lead for health care and life sciences at KPMG, tells AIS Health that MCCPDC isn’t necessarily a new idea.

“What’s interesting about this cash model is it’s now bifurcating,” Shehata explains. “It’s going to go to an online mode, and it’s also an in-store mode. This cash model is not a new model — we saw it with the low-price discounters, the retailers’ low-price generics. The second thing you’ve seen is the membership retailers, the big-box retailers also offer very aggressive pricing. I would say, at the end of the day, it’s a continuation of that trend. It’s offering a more online experience in that market.”

GoodRx, MCCPDC Use Different Models

However, Ge Bai, Ph.D., a professor at Johns Hopkins University’s schools of business and public health, tells AIS Health that she thinks MCCPDC does have some unique characteristics in comparison to its competition.

“GoodRx makes money by creating competition across all the PBMs on its own platform,” Bai explains. (GoodRx pays PBMs a fee to tap into their retail pharmacy networks and manufacturer rebate agreements, both of which it allows any user to access.) “But to me, there is no competition for this new Mark Cuban company — no other company goes from one manufacturer, then to the pharmacy and then into the patient’s hands.”

GoodRx’s model “is to create competition across PBMs [for a consumer’s business] to achieve the best so-called cash price — which is actually the best network discount price,” Bai adds. “But Mark Cuban’s model is a straight line, point-to-point. There’s no [inter-PBM] competition.”

Bai also draws a contrast with Amazon Pharmacy, which is only open to Amazon Prime members or members of a contracted health insurance plan.

“Amazon Pharmacy is also limited to generics. But Amazon Pharmacy, I don’t think they’re focused on patients not using insurance. I think they’re trying to carve into the market where patients are covered by their employer-sponsored plan and Amazon Pharmacy is a preferred provider,” Bai says.

But Shehata points out that the business model doesn’t matter to the consumer, who will pick a product on price. He says price comparison tools that display each contender’s price — placing MCCPDC and GoodRx next to a patient’s PBM-derived prescription drug benefit — may guide consumer choices in the future.

“Years ago, people had their own websites and they would offer discount travel. Now, there are these crawlers that basically put it online,” Shehata explains, referencing sites like Kayak and Expedia. Similar products could emerge for prescription drugs: “They’ll look at online and offline and coupons and everything else, and they’ll help you identify who has the lowest price. It could be any one of those areas. And I think if you’re a [health plan] member [with a PBM], you have to apply your benefits to really figure out what your true cost is out-of-pocket and your other contributions.”

“But I do think these cash businesses are really going to become a proliferating business, as long as we have the analytics on the front end to help people and potentially direct them to the lowest-cost options,” Shehata continues.

“I’m a big believer in the market,” he continues. “I think it’s not going to necessarily be any one [company] — people aren’t going to say, ‘I’m going to pick just one,’ although people will likely gravitate to their favorites. But if we really are moving towards an online marketplace, you’re going to be able to shop for the lowest price across those different domains.”

Contact Anderson at, Bai at, Rubinstein at and Shehata via Matt Weiss at

This story was reprinted from AIS Health’s biweekly publication RADAR on Drug Benefits.

© 2024 MMIT
Peter Johnson

Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

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