Mark Cuban jumps out of the Shark Tank and into generic pharma with a plan to offer dirt-cheap drugs
The call for a wholesale rewrite of drug pricing has taken on a fever pitch in recent years, regularly becoming part of presidential stump speeches and congressional horse trading. The focus is usually on high-price branded meds, but now a new shark is in the water going after pricey generics as well.
In an effort to offer low-cost alternatives to pricey generic medicines, billionaire investor Mark Cuban has put his name to a new company dubbed Mark Cuban Cost Plus Drugs — an on-the-nose moniker for sure, but one with the serious ambition of undercutting the market on targeted meds.
The new company’s version of radical transparency will include divulging its cost of development and distribution and then adding a flat 15% margin onto all products for wholesale — enough, it says, to offer a cheap alternative for high-price meds.
The goal is eventually to launch more than 100 drugs onto the market by the end of this year, but the firm will start with antiparasitic albendazole, which it says it will offer at an average price per tablet of $20 compared with the current average of $225 MSRP. For insured patients, that price could go “as low as a dollar,” the company said on its website.
“Our low cost albendazole product allows physicians to affordably treat hookworm outbreaks throughout America that were previously too expensive to treat systemically before,” the company wrote.
While details are scant on where the company will source its medicines in the short term, it is planning to build a new manufacturing site in Dallas — true to Cuban’s roots — by 2022. A request for comment was not answered by press time.
Drugmakers looking to rewrite the rules of pricing are nothing new in an industry where the list price of drugs has become a hot-button political issues. However, those crusades are usually in the world of branded medicines, where cornered markets can produce inflated prices.
Just last week, disruptive biotech EQRx snagged a $500 million Series B to pursue its version of a pricing rework, pledging to bring cost-effective oncology and immunology meds to market. That will begin with four cancer drugs it has in-licensed and which could be ready for market within the next two years.
But going after generic drugs — a market where the going thinking is prices are already competitive — is a relatively unique twist, and Cuban’s involvement obviously adds some heft to the mission statement.
But the company could have a dual purpose in hitting the market when it did. With the Covid-19 pandemic shutting down supply chains for generic medicines around the world, politicians and investors have called for redundancy in supply on US shores, looking to limit the influence of China and India, two of the leading players in finished generic medicines and ingredients.
The Trump administration over the course of the pandemic has floated massive funding offers for a few of those targeted companies, some with big names. In the case of Kodak, most famous for its cameras, the government investment arm, the Development Finance Corporation, offered a $765 million loan to get their own generics pharma entry off the ground. But accusations of insider trading and an SEC investigation eventually sent that initiative into a tailspin in August.