Confession. I think Mark Cuban’s Cost Plus Drugs is underwhelming at best and, at worst, the death of independent pharmacies. I’ve been following it since inception, and I just can’t get excited about it – at least not yet.

Cost Plus Drugs dispenses about 3,000 generic drugs. There is the transparent price, a 15% markup, a $5 pharmacy service fee and a $5 shipping fee. Cost Plus is often able to find gaps in the market and set prices lower than others for those without insurance (and sometimes with insurance.)

But a game changer? Revolutionary? No. It’s mail order for the internet age. Unless you want to go to an independent pharmacy near you using the Team Cuban Card. Criticisms of the site are that it uses short expiration dates and inflates the “savings” seen. There are only a handful of brand drugs available. I also wonder about how it impacts (or at least doesn’t help) the prescription drug shortage problem with a hunt for the lowest price. But, then again, who isn’t.

Honest talk – although prices are all over the place, generics remain the profitable part of healthcare for wholesalers and pharmacies. Brand name drugs are not where money is made for these stakeholders. Wholesalers lose money on branded drugs because they give a discount on acquisition costs to pharmacies (making up the difference on the generic side). Pharmacies often lose money on branded drugs between the fees charged by pharmacy benefit managers (PBMs)/plans, and the narrow/nonexistent cushion between acquisition and reimbursement.

If the profitable part of dispensing goes to a third-party mail order like Cost Plus, where does that leave the independent pharmacies? Even if they fill some of the scripts, will it balance out? Will they have enough generic scripts to make the quotas needed to get discounts on branded drugs?

Here is where I want to draw the distinction between Cost Plus Drugs and Mark Cuban.

Mark Cuban presents as a superhero with a cape that says “PBMs are evil.”  In the recent White House PBM briefing session and a Drug Channels piece, he legitimately fights for transparency against rebate distortions and how rebates drive formulary decisions. He’s not wrong. Our system is terrible. Manufacturers give discounts and rebates that don’t get to the patient or, if they do, line others’ pockets along the way. PBMs are mired in contracts that keep them addicted to high dollar, high rebate products, and they have been greedy on some generic drugs by taking extraordinary margins. It was going to catch up with them.

Returning to Cost Plus – does it help? Kind of – it is not a panacea; it’s a PBM for generic drugs. It can help patients who need one of those drugs they offer. It offers transparency in a way that we seldom see. But it skims the profitable part of the supply chain without changing the underlying structure. And maybe that’s where the rhetoric comes in. Maybe that will shake loose the current system and change the way we pay for brand and generic drugs. But for now, meh.

Mark Cuban’s ideas about the market are good, and I appreciate that someone like him is out there with showmanship and charisma saying what he’s saying. But Cost Plus Drugs is not the answer, at least not yet.