October 25, 2021 – A pair of new pharmacy-benefit management (PBM) companies are being launched to tackle high drug costs – The Mark Cuban Cost Plus Drug Company PBC and the Purchaser Business Group on Health (PBGH), a nonprofit coalition of nearly 40 large public and private employers.
PBGH is led by CEO Elizabeth Mitchell and The Mark Cuban Cost Plus Drug Company PBC is led by radiologist Alex Oshmyansky.
Mark Cuban, the billionaire investor and owner of the Dallas Mavericks, is funding the new company with the aim of selling generic drugs at a transparent fixed-rate markup. To do so, it is creating an all-in-one pharmaceutical supplier, combining manufacturing, wholesale distribution and pharmacy services under one roof.
Cuban’s PBM is building a plant in Dallas to manufacture certain drugs, and hopes to open the facility in September 2022, said CEO Dr. Alex Oshmyansky. The company will start bidding for clients next year and aims to be operational in 2023. Cuban’s company plans to soon launch an online pharmacy that will sell 100 of the most commonly prescribed generic medications. The pharmacy is buying drugs directly from generic manufacturers including Amneal Pharmaceuticals Inc., and will charge customers a 15% markup plus a $3 dispensing fee.
PBGH’s new PBM, EmsanaRx, will be housed under an independent for-profit company called Emsana Health. The PBM will start operating next year with a small number of regional medical centers with about 3,000 employees total, said Chief Executive Greg Baker. It aims to negotiate rebates directly with drugmakers, and will allow its clients to examine invoices showing the dollar amounts it receives in rebates. The PBM intends to share 98.5% to 99% of the rebates with its clients, with the remainder going to cover administrative expenses, said Mr. Baker.
The ultimate aim of the new pharmacy-benefit managers, their executives said, was to be more transparent about drug costs and share with their clients more of any negotiated savings.
The new companies are the result of employer frustration with the lack of transparency and lack of savings from the current PBMs. Transparency in the PBM industry typically means charging a flat fee for services and passing along to the employer 100% of the rebates and discounts paid by drugmakers to the PBM. In theory, PBMs are supposed to pass along these large savings to their customers. In practice, the PBMs failing to disclose all the rebates and keeping too much of the savings some employers say.
According to a Wall Street Journal report, nearly 80% of U.S. prescriptions are managed by three PBMs:
- CVS Health Corp.’s CVS Caremark
- Cigna Corp.’s Express Scripts
- UnitedHealth Group Inc.’s OptumRx