Shark Tank’s Mark Cuban made a splash last week in the world of drug pric­ing, pledg­ing to cut out cost­ly PBMs and de­liv­er on a very sim­ple plan with his new phar­ma­cy, and some huge cost sav­ings for con­sumers.

Mark Cuban

The com­pa­ny, known as Mark Cuban Cost Plus Drug Com­pa­ny, pledges to on­ly charge a 15% mark-up for its gener­ic drugs, of­fer­ing al­ter­na­tives to a mar­ket of­ten prone to short­ages, and ex­pen­sive gener­ic drugs (think Mar­tin Shkre­li) due to lack of com­pe­ti­tion.

But while the com­pa­ny la­bels it­self a drug com­pa­ny, and pledges to get in­to gener­ic drug man­u­fac­tur­ing of its own in a Dal­las-based cGMP fa­cil­i­ty, the com­pa­ny is re­al­ly plan­ning to op­er­ate as a com­pound­ing phar­ma­cy.

Alex Osh­myan­sky

“At launch, we are plan­ning as func­tion­ing pri­mar­i­ly as a 503(b) com­pound­ing phar­ma­cy specif­i­cal­ly tar­get­ing drugs on the FDA short­age list,” CEO Alex Osh­myan­sky told End­points News via email. “That will al­low us to be more ag­ile and ad­dress drug short­ages as they arise.”

Be­com­ing a 503(b) com­pound­ing phar­ma­cy, al­so known as an out­sourc­ing fa­cil­i­ty, means the firm will be less reg­u­lat­ed than a typ­i­cal gener­ic drug com­pa­ny, but Cuban’s com­pa­ny will need to reg­is­ter with the FDA, be in­spect­ed by the FDA, and ad­here to spe­cif­ic man­u­fac­tur­ing re­quire­ments.

“We ful­ly in­tend to reg­is­ter as an out­sourc­ing fa­cil­i­ty with the FDA, though, when we are far enough along that we are el­i­gi­ble,” Osh­myan­sky said.

For now, the hun­dreds of drugs avail­able for pur­chase via the com­pa­ny’s web­site are all sourced from oth­er gener­ic man­u­fac­tur­ers.

The on­ly gener­ic drug cur­rent­ly list­ed in the FDA’s Na­tion­al Drug Code Di­rec­to­ry with Cuban’s com­pa­ny as the la­bel­er is for a gener­ic ver­sion of the an­ti-worm drug al­ben­da­zole.

“The oth­er prod­ucts will be list­ed once we are far enough along that we can be grant­ed ND­Cs,” Osh­myan­sky said.

The dis­tinc­tion be­tween op­er­at­ing as a gener­ic drug com­pa­ny and as a com­pound­ing phar­ma­cy means Cuban’s com­pa­ny like­ly won’t be sub­mit­ting its own gener­ic drug ap­pli­ca­tions to the FDA for new gener­ic prod­ucts, in­stead of pig­gy­back­ing off oth­er gener­ic drug sub­mis­sions, at least to start.

Oth­er play­ers in this field have sim­i­lar­ly pledged to crack down on drug short­ages in the US, in­clud­ing Rich­mond-based Phlow, which has vowed to end es­sen­tial med­i­cines short­ages in the US, and Utah-based non­prof­it Civi­ca Rx, which is man­u­fac­tur­ing ster­ile in­jecta­bles in short­age for hos­pi­tal clients on a cost-plus ba­sis, as well as tar­get­ing high­er-priced gener­ics via an­oth­er ini­tia­tive, where it plans to sub­mit its own AN­DAs in part­ner­ship with health plans.

But the cost com­po­nent that Cuban and Civi­ca are tar­get­ing re­mains cru­cial.

Al­lan Coukell

Al­lan Coukell, Civi­ca VP of pol­i­cy, told End­points, “For many prod­ucts, the gener­ic in­dus­try does a fan­tas­tic job of de­liv­er­ing low-cost drugs to pa­tients but there are some prod­ucts where costs re­main high so hav­ing some­one fo­cused on de­liv­er­ing those in a cost-plus mod­el is still nov­el.”

In ad­di­tion to the Cuban-backed Dal­las man­u­fac­tur­ing plant, which Osh­myan­sky said “is about half-way fin­ished with con­struc­tion,” Cuban is al­so plan­ning to run his own PBM, as well as a cash-on­ly phar­ma­cy, where con­sumers can buy more of these cost-plus-15% drugs li­censed via the on­line phar­ma­cy Truepill.

But more is com­ing, and Osh­myan­sky said the com­pa­ny has plans for a bi­o­log­ics li­cense ap­pli­ca­tion too, which will like­ly take more time to bring to mar­ket than a gener­ic drug.

“At the mo­ment, we are ac­tu­al­ly tak­ing a BLA through the FDA ap­proval process for a prod­uct we in­tend to make at the fa­cil­i­ty. We are not dis­clos­ing what the prod­uct is yet, though,” Osh­myan­sky said, not­ing that the com­pa­ny has every in­ten­tion of com­ply­ing with FDA in­spec­tions.

“Struc­tur­al steel is up now, and we are be­gin­ning to put up the walls and pip­ing next week. So noth­ing re­al­ly for the FDA to in­spect at the mo­ment, but cer­tain­ly plan to have it in­spect­ed as soon as is ap­pro­pri­ate,” he added.

Ar­ti­cle up­dat­ed to note the com­pound­ing fa­cil­i­ty is be­ing built in Dal­las, not Hous­ton.

89bio said its drug was better than placebo at lessening fibrosis without worsening nonalcoholic steatohepatitis, or NASH, in two of three dose groups.

The San Francisco biotech said it thinks the Phase IIb data pave the way for a potential Phase III, following in the footsteps of another biotech in its drug class, Akero Therapeutics. To fund a late-stage study, CEO Rohan Palekar told Endpoints News 89bio “would need to raise additional capital,” with the company having about $188 million at the end of last year.

The National Institutes of Health has again declined to use so-called “march-in” rights to lower the price of Astellas and Pfizer’s prostate cancer drug Xtandi despite being invented at UCLA with grants from the US Army and NIH.

“Given the remaining patent life and the lengthy administrative process involved for a march-in proceeding, NIH does not believe that use of the march-in authority would be an effective means of lowering the price of the drug,” NIH told prostate cancer patients Robert Sachs and Clare Love, in a letter shared with Endpoints News. The institutes’ analyses found Xtandi “to be widely available to the public,” an indication that there was not a pressing need for the US to act.