The Mark Cuban Cost Plus Drug Company is jumping into the online pharmacy sector, launching a new digital marketplace. The company pitches the digital pharmacy as a way to help consumers find medications for less money.
In November, the company unveiled its pharmacy benefit manager (PBM) operation, which the company says lets them cut out the “middlemen” and price markups in their online pharmacy.
According to the company’s website, the pharmacy will offer medications that focus on diabetes, heart health, gastrointestinal issues, mental health, cancer, antibiotics and other areas.
WHY IT MATTERS
According to Kaiser Family Foundation research, 83% of adults say that the cost of prescription drugs is unreasonable. Additionally, 35% of survey respondents with a household income of $40,000 or less reported having difficulty affording their prescription drugs.
The MCCPDC is pitching its new system as a way to mitigate drug costs by working both as a PBM and retailer.
“There are numerous bad actors in the pharmaceutical supply chain preventing patients from getting affordable medicines,” Alex Oshmyansky, CEO of the MCCPDC, said in a statement. “The only way to ensure affordable prices get through is to vertically integrate.”
THE LARGER TREND
There are several online drug retailers today. Big tech has also demonstrated interest in the sector. In 2018, Amazon entered the space after acquiring digital pharmacy PillPack for just under $1 billion. Amazon later integrated PillPack and rolled out Amazon Pharmacy, a digital shop that lets customers order and manage their prescription medications online and get them delivered to their homes.
Investors have taken notice of digital pharmacies, pouring hundreds of millions of dollars into the space. In April, online pharmacy Capsule completed a $300 million funding round, which brought the company’s total valuation to $1 billion.
In 2020, Alto, a digital pharmacy and drug delivery company, closed a $250 million Series D funding round led by SoftBank’s Vision Fund 2.