Mark Cuban's Cost Plus Drug Company projects huge savings over Medicare for generic cancer medications

By Neha MathurJun 13 2023Reviewed by Benedette Cuffari, M.Sc.

In a recent article published in the Journal of Clinical Oncology, researchers reveal significant cost savings when generic oncology drugs are purchased through the Mark Cuban Cost Plus Drug Company (MCCPDC) as compared to Medicare.

Study: Projected Savings for Generic Oncology Drugs Purchased via Mark Cuban Cost Plus Drug Company Versus in Medicare. Image Credit: Celil Kirnapci / Shutterstock.com

Background

There is an urgent need to reduce spending across the system in a dynamic healthcare landscape like that of the United States, which is possible with the equal participation of patients and sponsors.

The Medicare program contributes a substantial proportion of prescription drug spending in the U.S., which was already high and continues to increase over time. In fact, in 2019, Medicare and its beneficiaries accounted for 27.2% of the fee-for-service program. Although oncology prescription drugs constituted only 0.6% of overall sales volume in 2020, these drugs represented a disproportionate cost within Medicare Part D at 13.2%.

MCCPDC offers low-cost, generic versions of all drugs, including oncology drugs falling under the broad category of specialty drugs. Sourcing more affordable generic oncology drugs through programs like MCCPDC is crucial for attaining long-term savings for beneficiaries and public payers.

About the study

In the current study, researchers identified seven generic oncology drugs including abiraterone, anastrozole, imatinib, letrozole, methotrexate, raloxifene, and tamoxifen, as well as their dosages and prices for 2022 through public formulary data from MCCPDC.

This dataset specified the unit price of each dosage unit, which was subsequently used to calculate the dosage price of a 30-day prescription. Each dosage unit covered the 15% markup, as well as the $3.00 USD and $5.00 USD pharmacy and shipping fees, respectively.

Next, the researchers identified the cumulative dosage units dispensed for the brand and its generic versions using the Center for Medicare and Medicaid Services (CMS) 2020 Part D Spending. The Q3-2022 Medicare Part D formulary drug pricing data was also used to obtain the 25^th, 50^th, and 75^th percentile unit costs for all seven generic oncology drugs evaluated in this study.

One of the study goals was to calculate the percentage cost savings achieved by replacing Part D spending in price per dose unit with the MCCPDC prices for generic drugs. Monthly and yearly savings for a beneficiary who took an oncology drug as prescribed were also calculated.

To this end, the researchers first calculated the difference between MCCPDC prices and Medicare Part D plan pricing for each drug. These prices were subsequently extrapolated for a specified month and year. Finally, the researchers estimated how many Part D beneficiaries could benefit from the MCCPDC plan annually.

Study findings

The Inflation Reduction Act, which was recently signed into law on August 16, 2022, will allow Medicare to negotiate drug prices directly with manufacturers. As a result, CMS should estimate how much Medicare Part D plan sponsors overpay for generic prescription drugs and advocate for more favorable pricing for its beneficiaries.

The authors also highlighted the widespread financial toxicity associated with cancer treatment, which manifests in several ways, including medical debt and patients not taking medications as indicated. In oncologic care, financial toxicity leads to adverse clinical outcomes, including worsening disease symptoms, quality of life, and increased mortality.

It is crucial that physicians and their patients are aware of cash-pay alternatives, as these substitutes might reduce drug prices for Medicare Part D beneficiaries who choose to buy drugs outside their health plans.

The 30-day prescription prices for most drugs evaluated in this study were more affordable when purchased through MCCPDC at the 25^th, 50^th, and 75^th percentile formulary prices. This was not true for anastrozole, letrozole, and tamoxifen when offered at the 25^th percentile of Medicare Part D formulary pricing.

Even when Medicare beneficiaries only pay 5% of the drug’s price for a 30-day prescription, baseline MCCPDC prices remained lower. By switching to MCCPDC for prescription drug services, Medicare cancer patients would save nearly $25,200 and between $17,500 and $20,500 annually for abiraterone and imatinib, respectively.

Conclusions

The estimated potential savings achieved by replacing Part D plan prices for the seven oncology drugs evaluated in the current study was $661.8 million, with total cost savings between $228.1 million and $2,154.50 million as compared to the 25^th and 75^th percentiles of Part D plan unit prices.

These findings indicate that substituting current Part D median formulary prices with MCCPDC pricing could result in significant savings for all seven generic oncology drugs.