Mark Cuban's cost-plus drug pricing model offers significant savings to patients

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A new drug company founded by entrepreneur Mark Cuban could save patients $1.29 billion a year based on 2020 Medicare Part D expenditures on just the nine most popular urological drugs, according to a study published in the Journal of Urology.

The study, led by Vanderbilt University Medical Center (VUMC) researchers, examined the potential savings if Medicare prices for generic drugs were as low as those offered under the Mark Cuban Cost Plus Drug Company, which provides a standard template pricing of the cost of manufacturing the drug plus a 15% markup, plus standard $5 fees for dispensing and $3 fees for shipping.

We found that if the U.S. government used Mark Cuban's cost-plus drug pricing model to supply urological drugs to Medicare patients, they would save taxpayers an estimated $1.29 billion." 

Ruchika Talwar, MD, lead author, a fellow in Urologic Oncology at VUMC

"It means that patients would be able to get their drugs more affordably, but also means that taxpayer funds could go toward other important issues and hopefully save us all some money in general."

The nine commonly-prescribed urological drugs that were studied -; tamsulosin, finasteride, oxybutynin, alfuzosin, solifenacin, tolterodine, sildenafil, tadalafil, and abiraterone -; are used to treat conditions including prostate cancer, overactive bladder and prostate enlargement.

For the 90-day prescription prices, all drugs generated cost savings for Medicare, ranging from 48.7% to 99.2%. The savings for abiraterone alone amounted to $656 million, or nearly 52% of all potential Medicare savings for urological drugs in both 30-day and 90-day prescription models. Abiraterone is used to treat prostate cancer that has spread to other parts of the body by blocking testosterone, which is the hormone that drives prostate cancer growth.

"Just by changing the way one commonly prescribed drug (abiraterone) was purchased, we could convey a benefit of more than $650 million in cost savings to taxpayers," Talwar said. "The impact of this could be astronomical across all cancers … any sort of oral, generic drug available through Mark Cuban's company can be a lot cheaper for many patients, not just Medicare patients, through this program. And taxpayers are the ones who fund Medicare drug spending."

"When Dr. Talwar approached me to move this project forward, I had little idea of its possible impact," said co-author Sam S. Chang, MD, MBA, Patricia and Rodes Hart Endowed Professor of Urologic Surgery and VUMC Chief Surgical Officer, Vanderbilt Ingram Cancer Center.

"Dr. Talwar's interest, investigation and efforts have gained national attention and increased the need for policy initiatives to decrease medical costs. Under her leadership, the team's future work outlines the financial burden of common cancer therapies on our patients and the possible next steps forward," he said.

Source:
Journal reference:

Cortese, B.D., et al. (2023) Urological Drug Price Stewardship: Potential Cost Savings Based on the Mark Cuban Cost Plus Drug Company Model. Journal of Urology. doi.org/10.1097/JU.0000000000003083.

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