Author Topic: Mark Cuban's Cost Plus Drug Company  (Read 1029 times)

Brad

  • Inner Core
  • Hero Member
  • *
  • Posts: 3254
  • What, me worry?
    • View Profile
Mark Cuban's Cost Plus Drug Company
« on: January 14, 2021, 02:45:17 AM »
Focusing on high cost generic drugs.  Charging cost + 15% wholesale.

Will be building their own mfg plant.  Over 100 drugs targeted.

https://costplusdrugs.com

ergophobe

  • Inner Core
  • Hero Member
  • *
  • Posts: 6773
    • View Profile
Re: Mark Cuban's Cost Plus Drug Company
« Reply #1 on: January 14, 2021, 02:55:12 AM »
I heard an interview with him about this. In some cases, the prices will be on the order of 10% of current prices

rcjordan

  • I'm consulting the authorities on the subject
  • Global Moderator
  • Hero Member
  • *****
  • Posts: 11592
  • Debbie says...
    • View Profile
Re: Mark Cuban's Cost Plus Drug Company
« Reply #2 on: January 14, 2021, 03:04:13 AM »
Bezos is going to be hard to beat, imo.

Amazon Pharmacy delivers discount prescriptions to Prime members

http://th3core.com/talk/marketplaces-amazon-ebay-etsy-newegg-etc/amazon-pharmacy-delivers-discount-prescriptions-to-prime-members/msg70861/#msg70861

Brad

  • Inner Core
  • Hero Member
  • *
  • Posts: 3254
  • What, me worry?
    • View Profile
Re: Mark Cuban's Cost Plus Drug Company
« Reply #3 on: January 14, 2021, 12:13:47 PM »
> Amazon

Cuban's Pill Factory will get the cheap stuff to Walgreen's, CVS, Osco, Walmart, Rite Aid and independents (which often operate in poorer areas like West Virginia).  Amazon may have a price advantage but it is a closed system.

The other thing I like is he's going to manufacture in the US, not outsource to China, India or Mexico.  This takes care of some supply train problems.

Disruptive: This puts some competition in the generic drug market. Puts pressure on other generic pill slingers that are charging high prices because they are the only game in town.

rcjordan

  • I'm consulting the authorities on the subject
  • Global Moderator
  • Hero Member
  • *****
  • Posts: 11592
  • Debbie says...
    • View Profile
Re: Mark Cuban's Cost Plus Drug Company
« Reply #4 on: January 14, 2021, 04:02:30 PM »
Cuban has a *tough* uphill battle coming if his group is mostly competing on price. Bezos got a 2 year jump on the market by buying PillPack.

Amazon buys PillPack, an online pharmacy, for just under $1B
http://th3core.com/talk/water-coolerextra/amazon-buys-pillpack-an-online-pharmacy-for-just-under-$1b/

>Walgreen's, CVS, Osco, Walmart, Rite Aid and independents

We used an local independent and CVS, and -at first- likely would not have switched to Amz if the prices had been close.  But once signed up, the convenience of 2-day delivery from a familiar/trusted vendor just sucks you in.  I later moved a couple of cheap drugs even though the out-of-pocket costs were inconsequential but mostly for the convenience of *not* having to deal with physical pharmacies.

I've also seen several positive reviews about using Amz's multiple shipping addresses in checkout to redirect their drug deliveries while traveling. I hadn't thought of that but that's a nice bonus convenience.

Finally, I still like the idea of silo-ing my credit card info with a limited number of vendors.

Cuban's got a lot to overcome. 
 

ergophobe

  • Inner Core
  • Hero Member
  • *
  • Posts: 6773
    • View Profile
Re: Mark Cuban's Cost Plus Drug Company
« Reply #5 on: January 14, 2021, 05:07:52 PM »
But Cuban is not trying to be a pharmacy. He's trying to be a drug manufacturer. And based on what he said, he's trying to compete in areas where he thinks drugs are wildly overpriced.

Though he didn't come right out and say it, I had the impression that he imagines this roughly as a non-profit. I had the feeling that if this business went broke because everyone had to lower prices to match him, he would consider that a success (as long as they stayed low).

rcjordan

  • I'm consulting the authorities on the subject
  • Global Moderator
  • Hero Member
  • *****
  • Posts: 11592
  • Debbie says...
    • View Profile
Re: Mark Cuban's Cost Plus Drug Company
« Reply #6 on: January 14, 2021, 05:30:17 PM »
IMO, a wholesaler -even a very transparent one- won't alter the end consumer prices all that much.  The middlemen tend to fold the extra margins into their business.

>15%

In my wholesaler experience, generic commodity items (ex: wire, water heaters) tend to trade at or near cost --sort of 'near-loss leaders.'  You're lucky to get a mark-up of 4%.