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This keeps showing up but it's total bullshit. Cuban wants to take 15% of the transaction for running a web site and processing payment. They're not manufactu

by treis 4y ago

This keeps showing up but it's total bullshit. Cuban wants to take 15% of the transaction for running a web site and processing payment. They're not manufacturing drugs. They're not buying drugs. They're not shipping drugs. They're not doing anything at all besides taking your order and giving it to someone to do all those things. It's not a charity. It's a profitable business and a very profitable one at that. Oh yeah, and the prices aren't lower than what you can get using GoodRX.

lcall 4y ago
From one of those prior discussions, a related nonprofit effort to lower prices of drugs that are sometimes in short supply or overpriced, where the founding Utah hospital system has joined with other hospital systems, has a solid, long-term reputation (and good personal experience--their intake agreement to get a blood sample drawn totaled 2 reasonable pages, where the next-nearest hospital came out at 11) and have generally done friendly good work for a long time as far as I can tell. Wikipedia said (lightly shortened): "Civica Rx is a nonprofit generic drug company founded in 2018 by national philanthropies and leading U.S. health systems[1] to reduce and prevent drug shortages in the United States and the price spikes that can accompany them. .... While serving 55 health systems and 1,500 hospitals (or 1/3 of all licensed U.S. hospital beds), Civica also supplies the U.S. Department of Veterans Affairs, the U.S. Department of Defense, and “340B” hospitals caring for vulnerable patients in some of the country’s most underserved areas. As of January 2022, Civica provided nearly 70 million vials of essential medicines, enough to treat over 26 million patients across the United States. These numbers continue to grow as Civica moves from a start-up to a well-established societal asset, serving more patients every day. Most recently, eleven of Civica's 55+ medications are being used to help COVID-19 patients, including neuromuscular blocking agents, sedation agents and pain management medications for patients on ventilators." Etc. ( https://en.wikipedia.org/wiki/Civica_Rx https://en.wikipedia.org/wiki/Civica_Rx ) https://www.fiercehealthcare.com/hospitals-health-systems/drug-prices-healthcare-costs-intermountain-healthcare-civica-rx-generic https://www.fiercehealthcare.com/hospitals-health-systems/dr... (thanks to pottertheotter in another HN link/discussion about Mark Cuban, below) https://civicarx.org/ https://civicarx.org/ Other prior discussion: https://news.ycombinator.com/item?id=25932233 https://news.ycombinator.com/item?id=25932233 ("The Mark Cuban Cost Plus Drug Company" about which I don't know anything more.)
conductr 4y ago
I've done work in this industry. Negotiating wholesale contracts and contracts directly with manufactures as well as all the other middle men. In theory alone, Cuban's strategy should/could work. However, what I've seen is there is a market price equilibrium effect in place such than any middle man who is best positioned, will inflate the price towards that market price. So what will happen is, in a world where it's only the manufacturers and Cuban, the manufacturers will get to absorb all the profit of the current middlemen and Cuban keeps his 15% and the price to consumers remains. Or, continues upwards seeking that equilibrium point. For generics, there may be some competition and the market of manufacturers will naturally consolidate until the generic is only available from a single manufacturer. In many instances, this already occurs, the manufacturer has a Brand then when IP is open and competition imminent, they release the first Generic at a price that makes other manufactures hesitant to ramp up production thus maintaining a complete monopoly for that specific drug. And then you realize this is simply how capitalism is designed to work. People in the business of healthcare always try to dream up these complicated business models and because the other complicated business models inflate prices and their new and better business model is going to save the world. It almost never happens or works. Capitalism and the set of basic economic laws win every time. The only real solution I could dream up is to implement price control. Where the consumer's cost is some function of the manufacturer's cost. Where the function/regulators should discourage price gouging and encourage manufacturing efficiencies. Unnecessary costs like mass advertising campaigns should be banned and the R&D side of the business should be separated from the the sales side. I personally wish all the IP generated in medicine was somehow publicly owned; either through purchase, initial funding, or... IDK I just think it would benefit all by having the scientific side of medicine unrestrained from IP. FWIW, I'm pro-capitalism but don't feel it should be universal. Healthcare deserves a universal approach with a goal of maximizing access and thus affordability. And, I say that having personally built a decent career on the business end of healthcare that would likely evaporate if healthcare was truly "fixed" and I would completely accept that fate for the greater good.
- wantsanagent 4y ago
  "the market of manufacturers will naturally consolidate until the generic is only available from a single manufacturer." That's called a monopoly. And while it is a natural tendency it's also a point of regulation. By preventing monopoly you keep the desirable part of capitalism (competition) without having to enforce less palatable anti-capitalist measures like direct price controls.
hwoolery 4y ago
It's not total bullshit - compare Imatinib on GoodRX ($787) vs CostPlus ($14) for 30 tablets. What the company is doing is cutting out the (arbitrary) pharmacy markup. They take a 15% cut and are TRANSPARENT about their price (again, novel in the drug industry). If you followed their company, you'd also notice they have plans to further lower the margin by manufacturing their own drugs, but these things take time.
- treis 4y ago
  GoodRX shows me $42.54 at Publix vs $19.40 shipped from CostPlus. So yes, some drugs will be cheaper but it's not the magnitude of savings they claim and it's not across the board. Last time this came up I checked a handful and CostPlus was usually slightly more when you include shipping cost.
  - josefresco 4y ago
    > but it's not the magnitude of savings they claim I follow Cuban on Twitter and he retweets people constantly who are saving substantial amounts of money. In their own words the savings are huge. Are you claiming these people are lying or fake?
    - gameshot911 4y ago
      People likely are saving a ton of money, but they were also probably not utilizing the most optimal solution out there previously (e.g. buying through their insurance vs. GoodRX).
      - josefresco 4y ago
        Right, so this is a big win for awareness. I've heard of GoodRX a few times but never looked into it because I have decent insurance. It took Mark's new venture, and his marketing efforts (via Twitter) for me to realize "this was a thing".
        4y ago
qiskit 4y ago
>This keeps showing up but it's total bullshit. Because it's probably paid advertising. Almost every article is paid advertising.
bko 4y ago
The reaction to his company is weird. It's not a charity, and I don't think he claims its a charity. We have plenty of charities the deal with healthcare and plenty of non-profit hospitals. Doesn't really do much in the grand scheme of things. He wants to lower price the same way Bezos wants to lower price. Your margin is my opportunity. Why do you have this reaction to just this particular business? Do you have it for other businesses? Like a low-cost supermarket opens up and you're upset that they're not really growing their own food? At this point, I would applaud any competition in the US health care space, especially if it adds transparency.
- klvino 4y ago
  Objective analysis. Cuban, Musk, and others have developed fandoms yielding coverage that portrays them as 'saints' (an overly positive light). With fandoms comes some degree of polarization as non-fans present their counter-points. Cuban found there is margin that can be squeezed in the pharma market due to being a high margin product with inefficient distribution. He moved on a revenue opportunity, plain and simple.
  - s1artibartfast 4y ago
    Fans seem to exaggerate a mild good into a great good, but the anti-fans take a mild good and claim it is a great evil. The end result is the anti-fans come off delusional and out of touch with reality.
    - skinnymuch 4y ago
      Isn’t that how the fans seem too? I’m not sure that’s always true either. All that tunnel and loop stuff by Musk and Boring company are pretty awful.
      - s1artibartfast 4y ago
        Fans can certainly do the inverse with a mild evil and exaggerating it into a great good, I just don't think it is the case with Cuban's option for low price drugs. It is hard to follow the mental gymnastics that twist people getting a cheaper option to buy drugs into evil, even if it isn't perfect. The worst possible outcome is the drugs aren't cheap and people don't buy them. No harm, no foul. Regarding Musk's loop and Boring company, I would also consider those a mild good. Hyped to high hell, but I don't see how that ever becomes bad. What is awful about cheaper all electric tunneling rigs? If if meets some of the claims, then cool, if it doesn't, then it is neutral. I am honestly curious why you think it is pretty awful?
silisili 4y ago
I appreciate you calling out some, let's call them un-nicities, that aren't usually spelled out when this comes out. All of that said, I don't think that makes the idea BS. The company is able to save many people money on prescriptions, which is a good thing. That Cuban or his company makes money on the way shouldn't bother us in the least (unless/until we ever get single payer).
pete_nic 4y ago
>Opening in 2022, our state-of-the-art Texas manufacturing site will manufacture products to address drug shortages and price gouging [1] Their website says they will start manufacturing drugs this year [1] https://www.markcubancostplusdrugcompany.com/ https://www.markcubancostplusdrugcompany.com/
TuringNYC 4y ago
>> This keeps showing up but it's total bullshit. Cuban wants to take 15% of the transaction for running a web site and processing payment. If he saves the consumer a lot of money, does it really matter if he takes 15% of the txn? Secondly, dont people/companies deserve to be paid for value they add? My US-specific experience is that customers are squeezed for a pound of flesh. These often come at the worst time, when you are sick, possibly really really sick. For example, you're deathly ill, on line at CSV, and you're arguing about a $200 mystery co-pay for a prescription you cant wait days for. Luckily for me as a SWE, I can afford $200 mystery charges. For some it could mean death. Any way to create transparency of pricing is really important, and could lead to live and death moments. I dont think we should dismiss these lightly.
eachro 4y ago
It might take a while but the free market should correct this if that take rate is in fact too high.
adave 4y ago
Are you hating just to hate,I just looked up a prescription that is for adhd/depression generic variant and its $399 at GeniusRx minimum and $15 shipped at Cost Plus. They must be doing something right and a lot better than someone commenting on their buisness model whereas you dont even know other pharmacies inefficiencies/model.
antman 4y ago
Thw whole article is about reducing costs through "simplification" and "removing the middleman". If anyone else thinks that laws,disttibution oligoololies and lobbies are not the problem, they can go build a drug factory and see if that works out. Drugs are produced cheaply and can be distributed cheaply from other countries in the US tomorrow.

by treis 4y ago

lcall 4y ago

From one of those prior discussions, a related nonprofit effort to lower prices of drugs that are sometimes in short supply or overpriced, where the founding Utah hospital system has joined with other hospital systems, has a solid, long-term reputation (and good personal experience--their intake agreement to get a blood sample drawn totaled 2 reasonable pages, where the next-nearest hospital came out at 11) and have generally done friendly good work for a long time as far as I can tell. Wikipedia said (lightly shortened): "Civica Rx is a nonprofit generic drug company founded in 2018 by national philanthropies and leading U.S. health systems[1] to reduce and prevent drug shortages in the United States and the price spikes that can accompany them. .... While serving 55 health systems and 1,500 hospitals (or 1/3 of all licensed U.S. hospital beds), Civica also supplies the U.S. Department of Veterans Affairs, the U.S. Department of Defense, and “340B” hospitals caring for vulnerable patients in some of the country’s most underserved areas. As of January 2022, Civica provided nearly 70 million vials of essential medicines, enough to treat over 26 million patients across the United States. These numbers continue to grow as Civica moves from a start-up to a well-established societal asset, serving more patients every day. Most recently, eleven of Civica's 55+ medications are being used to help COVID-19 patients, including neuromuscular blocking agents, sedation agents and pain management medications for patients on ventilators." Etc. ( https://en.wikipedia.org/wiki/Civica_Rx https://en.wikipedia.org/wiki/Civica_Rx ) https://www.fiercehealthcare.com/hospitals-health-systems/drug-prices-healthcare-costs-intermountain-healthcare-civica-rx-generic https://www.fiercehealthcare.com/hospitals-health-systems/dr... (thanks to pottertheotter in another HN link/discussion about Mark Cuban, below) https://civicarx.org/ https://civicarx.org/ Other prior discussion: https://news.ycombinator.com/item?id=25932233 https://news.ycombinator.com/item?id=25932233 ("The Mark Cuban Cost Plus Drug Company" about which I don't know anything more.)

conductr 4y ago

I've done work in this industry. Negotiating wholesale contracts and contracts directly with manufactures as well as all the other middle men. In theory alone, Cuban's strategy should/could work. However, what I've seen is there is a market price equilibrium effect in place such than any middle man who is best positioned, will inflate the price towards that market price. So what will happen is, in a world where it's only the manufacturers and Cuban, the manufacturers will get to absorb all the profit of the current middlemen and Cuban keeps his 15% and the price to consumers remains. Or, continues upwards seeking that equilibrium point. For generics, there may be some competition and the market of manufacturers will naturally consolidate until the generic is only available from a single manufacturer. In many instances, this already occurs, the manufacturer has a Brand then when IP is open and competition imminent, they release the first Generic at a price that makes other manufactures hesitant to ramp up production thus maintaining a complete monopoly for that specific drug. And then you realize this is simply how capitalism is designed to work. People in the business of healthcare always try to dream up these complicated business models and because the other complicated business models inflate prices and their new and better business model is going to save the world. It almost never happens or works. Capitalism and the set of basic economic laws win every time. The only real solution I could dream up is to implement price control. Where the consumer's cost is some function of the manufacturer's cost. Where the function/regulators should discourage price gouging and encourage manufacturing efficiencies. Unnecessary costs like mass advertising campaigns should be banned and the R&D side of the business should be separated from the the sales side. I personally wish all the IP generated in medicine was somehow publicly owned; either through purchase, initial funding, or... IDK I just think it would benefit all by having the scientific side of medicine unrestrained from IP. FWIW, I'm pro-capitalism but don't feel it should be universal. Healthcare deserves a universal approach with a goal of maximizing access and thus affordability. And, I say that having personally built a decent career on the business end of healthcare that would likely evaporate if healthcare was truly "fixed" and I would completely accept that fate for the greater good.

wantsanagent 4y ago
"the market of manufacturers will naturally consolidate until the generic is only available from a single manufacturer." That's called a monopoly. And while it is a natural tendency it's also a point of regulation. By preventing monopoly you keep the desirable part of capitalism (competition) without having to enforce less palatable anti-capitalist measures like direct price controls.

hwoolery 4y ago

It's not total bullshit - compare Imatinib on GoodRX ($787) vs CostPlus ($14) for 30 tablets. What the company is doing is cutting out the (arbitrary) pharmacy markup. They take a 15% cut and are TRANSPARENT about their price (again, novel in the drug industry). If you followed their company, you'd also notice they have plans to further lower the margin by manufacturing their own drugs, but these things take time.

treis 4y ago
GoodRX shows me $42.54 at Publix vs $19.40 shipped from CostPlus. So yes, some drugs will be cheaper but it's not the magnitude of savings they claim and it's not across the board. Last time this came up I checked a handful and CostPlus was usually slightly more when you include shipping cost.
- josefresco 4y ago
  > but it's not the magnitude of savings they claim I follow Cuban on Twitter and he retweets people constantly who are saving substantial amounts of money. In their own words the savings are huge. Are you claiming these people are lying or fake?
  - gameshot911 4y ago
    People likely are saving a ton of money, but they were also probably not utilizing the most optimal solution out there previously (e.g. buying through their insurance vs. GoodRX).
    - josefresco 4y ago
      Right, so this is a big win for awareness. I've heard of GoodRX a few times but never looked into it because I have decent insurance. It took Mark's new venture, and his marketing efforts (via Twitter) for me to realize "this was a thing".
      - 4y ago

qiskit 4y ago

>This keeps showing up but it's total bullshit. Because it's probably paid advertising. Almost every article is paid advertising.

bko 4y ago

The reaction to his company is weird. It's not a charity, and I don't think he claims its a charity. We have plenty of charities the deal with healthcare and plenty of non-profit hospitals. Doesn't really do much in the grand scheme of things. He wants to lower price the same way Bezos wants to lower price. Your margin is my opportunity. Why do you have this reaction to just this particular business? Do you have it for other businesses? Like a low-cost supermarket opens up and you're upset that they're not really growing their own food? At this point, I would applaud any competition in the US health care space, especially if it adds transparency.

klvino 4y ago
Objective analysis. Cuban, Musk, and others have developed fandoms yielding coverage that portrays them as 'saints' (an overly positive light). With fandoms comes some degree of polarization as non-fans present their counter-points. Cuban found there is margin that can be squeezed in the pharma market due to being a high margin product with inefficient distribution. He moved on a revenue opportunity, plain and simple.
- s1artibartfast 4y ago
  Fans seem to exaggerate a mild good into a great good, but the anti-fans take a mild good and claim it is a great evil. The end result is the anti-fans come off delusional and out of touch with reality.
  - skinnymuch 4y ago
    Isn’t that how the fans seem too? I’m not sure that’s always true either. All that tunnel and loop stuff by Musk and Boring company are pretty awful.
    - s1artibartfast 4y ago
      Fans can certainly do the inverse with a mild evil and exaggerating it into a great good, I just don't think it is the case with Cuban's option for low price drugs. It is hard to follow the mental gymnastics that twist people getting a cheaper option to buy drugs into evil, even if it isn't perfect. The worst possible outcome is the drugs aren't cheap and people don't buy them. No harm, no foul. Regarding Musk's loop and Boring company, I would also consider those a mild good. Hyped to high hell, but I don't see how that ever becomes bad. What is awful about cheaper all electric tunneling rigs? If if meets some of the claims, then cool, if it doesn't, then it is neutral. I am honestly curious why you think it is pretty awful?

silisili 4y ago

I appreciate you calling out some, let's call them un-nicities, that aren't usually spelled out when this comes out. All of that said, I don't think that makes the idea BS. The company is able to save many people money on prescriptions, which is a good thing. That Cuban or his company makes money on the way shouldn't bother us in the least (unless/until we ever get single payer).

pete_nic 4y ago

>Opening in 2022, our state-of-the-art Texas manufacturing site will manufacture products to address drug shortages and price gouging [1] Their website says they will start manufacturing drugs this year [1] https://www.markcubancostplusdrugcompany.com/ https://www.markcubancostplusdrugcompany.com/

TuringNYC 4y ago

>> This keeps showing up but it's total bullshit. Cuban wants to take 15% of the transaction for running a web site and processing payment. If he saves the consumer a lot of money, does it really matter if he takes 15% of the txn? Secondly, dont people/companies deserve to be paid for value they add? My US-specific experience is that customers are squeezed for a pound of flesh. These often come at the worst time, when you are sick, possibly really really sick. For example, you're deathly ill, on line at CSV, and you're arguing about a $200 mystery co-pay for a prescription you cant wait days for. Luckily for me as a SWE, I can afford $200 mystery charges. For some it could mean death. Any way to create transparency of pricing is really important, and could lead to live and death moments. I dont think we should dismiss these lightly.

eachro 4y ago

It might take a while but the free market should correct this if that take rate is in fact too high.

adave 4y ago

Are you hating just to hate,I just looked up a prescription that is for adhd/depression generic variant and its $399 at GeniusRx minimum and $15 shipped at Cost Plus. They must be doing something right and a lot better than someone commenting on their buisness model whereas you dont even know other pharmacies inefficiencies/model.

antman 4y ago

Thw whole article is about reducing costs through "simplification" and "removing the middleman". If anyone else thinks that laws,disttibution oligoololies and lobbies are not the problem, they can go build a drug factory and see if that works out. Drugs are produced cheaply and can be distributed cheaply from other countries in the US tomorrow.