Pharmaceutical Drugs at Cost Plus 15%? It's Here Now

The Cost Plus Drugs pricing model

By Thomas Neuburger

“The law has become a tool for every kind of greed.” —Frederic Bastiat

“The basic principle of capitalism: To each according to what they can grab. From each according to what they have to lose.” — Yours truly

It's Medicare Month, and Medicare plan enrollments are occurring across the country. Those eligible are enrolling in Real Medicare (Parts A and B), hybrid-Medicare (the Medigap plans available under Part B), and phony Medicare (the deceptively, but legally labeled Parts C and D).

Part C is called “Medicare Advantage,” but it’s neither Medicare nor advantageous, but that’s a story for another day. Part D covers drugs, and it’s also not Medicare, but a private insurance scam passed into bipartisan law during the Bush II presidency.

Which means that, this year again, millions of Medicare-eligible victims of Big Pharma will have to 1) guess what drugs they'll need for the following year, and 2) pay morally criminal prices for them.

Which makes this an appropriate time to talk about drug prices in America — and finally, a solution to them. Sadly, it’s a market-based solution, which means it could disappear. Happily, it’s a solution that will work if it’s allowed to proceed.

The Goal of Capitalism Is to Destroy Markets

This is the wrong place to go in depth about capitalism and markets, but the essence is this: Free markets are only the stated goal of capitalists, their cover story. Real capitalists, the mega-successful kind, always aim to destroy markets by dominating them via monopolies, or gaming them via capture of the rule-making apparatus.

Sometimes that capture means taking over some private mechanism, for example, the New York Stock Exchange, where the rules are written to benefit “market makers” who then manipulate stock prices. Sometimes that capture means taking over governmental regulation, for example, writing laws that allow massive markup on, well, almost everything you buy, from cable TV to electricity from the grid to, yes, drugs and pharmaceuticals.

Mark Cuban’s Cost Plus Drugs

Which brings us to the new (as of 2022) venture from billionaire and Shark Tank investor Mark Cuban. The company name is Cost Plus Drugs, and its goal is simple. From their website:

We started Mark Cuban Cost Plus Drug Company because every American should have access to safe, affordable medicines. If you don’t have insurance or have a high deductible plan, you know that even the most basic medications can cost a fortune. Many people are spending crazy amounts of money each month just to stay healthy. …

If you are fortunate enough to have health insurance with a low deductible, the high cost of drugs is driving up the premiums that you or your employer pay, making getting health insurance expensive and challenging. The Mark Cuban Cost Plus Drug Company takes these problems head on.

The plan is to “disrupt the drug industry and to do our best to end ridiculous drug prices.”

Normally the drug prescribed for hookworm, Albendazole, can cost as much as $500 per course, making the drug out of reach for many in need. …

Our cost for Albendazole is $26.08 per course. We mark that price up by 15% so we can continue to run the company and invest in disrupting the pricing of as many drugs as we possibly can.

That makes the base price of the drug $30. Then we add on the actual cost, $3.00, that our pharmacy partners charge us to prepare and provide your prescription to you.

That makes the sales price on this website $33. Far, far lower than the pricing available in the marketplace.

From $500 to $30 is quite a savings, and includes, if you believe in a capitalist -controlled drug supply, an entirely reasonable profit of 15%.

Sample Drug Prices from Cost Plus Drugs

Not all drugs are available yet, including insulin, but a great many are. Here are some example prices and savings from their “Medications” page.

Let’s start with something near and dear to male American hearts, Viagra and Cialis:

Or for women, birth control, just part of the list and sorted by retail price, high to low:

Starting to look attractive? Another set, this time blood thinners. Note the price of Plavix, down from $60 to $5:

And finally, a truly eye-opening set of cancer drug price reductions:

For some of these medications, the cost goes from 1000s of dollars to less than $50 for the same quantity.

A Growing Concern to Address a Growing Concern

As I said, not all drugs are available from this supplier, but they’re adding new medications as fast as they can. Their FAQ says they don’t carry brand or “specialty” drugs, but still, this is a great start. And they do plan to get into drug manufacturing.

You can help, in fact, by requesting drugs and asking to be notified when they’re available:

Personally, when insulin becomes available, it will be a milestone. And if California succeeds in manufacturing its own insulin, creating its own supply, look out.

How This Could Fail

You’ll not that I said above that the attempt to disrupt “will work if it’s allowed to proceed.” Here’s how the project could be made to fail:

1. Cuban is doing this because he wants to. What if he no longer wants to? Or worse, what if his company is bought and made to disappear?

2. The other avenue for failure is via the government, by which I mean the legalized bribery process called lobbying. Big Pharma could simply go to their agents — sorry, employees — sorry, cooperative public servants in Congress and find a way to put Cost Plus Drugs out of business. Legally. I’m guessing the phrase “unfair competitive advantage” will come up.

Consider the example of the aerospace company Hughes Aircraft, which operated for years as a non-profit until it was destroyed (forced to become a for-profit company) by agents of its competitors following Howard Hughes’ death.

3. The final way the company could be destroyed (or forced to “stand down”) is one you typically see only in novels. A horse head in the bed. An untimely porn stash release or small plane accident. The long blackmailing arm of the security state.

But those things don’t occur in our own world, surely. If they do, the news hasn’t made it to New York Times.

In the meantime, I’m betting hard on Mark Cuban’s traitor-to-his-class integrity, at least as this instance reveals it. May his venture succeed beyond his and our wildest dreams.