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Mark Cuban Generic Drugs – Disruption or Opportunism?

Just a few months back, Amazon came out with their own pharmacy and those of us in the healthcare space watched closely to see if it would also bring some much-needed disruption to this highly inflationary part of our healthcare system. Unfortunately, it turned out that rather than deliver any real change, Amazon entered the market to be another traditional player capitalizing on the mess.

Mark Cuban recently announced the launch of a generic drug manufacturer and the promise is to deliver radically low prices. Will his entry into the space deliver the disruption that is so needed?

Unfortunately, it appears to be yet another move of opportunism vs. disruption.

While it sounds good that the model will be cost plus 15% for the wholesale price, the real waste is added to the cost of prescription drugs after they leave the manufacturer, and the insurance companies and pharmacy benefit managers get involved. These drugs will be subject to spread pricing and the resulting price to the consumer and health plans will be inflated. Not to mention that making the drugs in the US will be higher in cost as compared to India where most generics are made currently.

How could a player come in and disrupt the RX market? Simple – manufacture the drug and sell it directly to the consumer with reasonable markup.

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