Mark Cuban Cost Plus Drug Co. and Health’s EmansaRx Buyer Business Team are teaming up to offer discounted prescription drugs to self-insured employers.
A coalition of nearly 40 major non-hospital employers and Cost Plus Drugs, which contracts directly with drug manufacturers to supply drugs at fixed price increases, on Thursday launched EmansaRx Plus, a company The majority-owned pharmaceutical benefit management company of the business group complements employers’ existing drug benefits. EmansaRx Plus aims to enhance continuity of care by offering lower-priced drugs through employer self-insurance programs rather than through a third party with a drug discount card.
It marks the first foray outside of the direct-to-consumer market for the Cuban company, which has expanded to trade nearly 1,000 drugs since its founding in January. The joint venture allows the business team to expand its internal service network, tailoring that network to the employer.
Cost Plus Drugs’ focus on the direct-to-consumer market, said David Dobrzykowski, an associate professor of supply chain management at the University of Arkansas and director of the Walton University Health Initiative limit its growth potential.
“This could mean hockey-like growth for Cost Plus Drug Co., which has the ability to further reduce drug costs for their customers,” he wrote in an email. “The move could also force PBMs to increase transparency on pricing and contract terms with manufacturers and self-funded employer health plans, both of which will bring great benefits for consumers.”
According to Kaiser Family Foundation data, about half of insured Americans have employer-sponsored health plans. Employers are increasingly looking to partner with startups that claim they will curb healthcare cost inflation and increase transparency.
“EmsanaRx Plus, combined with [Cost Plus Drugs]will adhere to a new model that offers the deepest discounts possible and takes only nominal administration fees so members and employers can rely on consistent reductions in overall prescription costs ,” Greg Baker, CEO of EmsanaRx, wrote in an email, “Both organizations are focused on running a completely transparent business model, with no hidden fees or business practices. “
Traditional PBMs and pharmaceutical manufacturers make substantial profits by offsetting the cost of drugs before any discounts or rebates are applied, he added.
Health plans often manage pharmacy benefit services internally or contract with pharmacy benefit managers, negotiate discounts and rebates with drug manufacturers, and partially pocket undisclosed. Many employers and payers are contracting directly with PBM or, in the case of the Health Buyers Business Group, create their own.
EmansaRx, launching in October 2021, stems from the frustration of employers over being denied access to information on drug costs, discounts, and administrative fees. While drug price inflation has slowed over the past five years, pharmaceutical prices are expected to grow 3.26% by 2023, according to Vizient, a group purchasing organization.
Independent consultants have found that Cost Plus Drugs pricing models save up to 60% on generic drug spending, said Dr. Alex Oshmyansky, founder and CEO of Cost Plus Drugs, wrote in an email.
“We can save employers millions of dollars in spending on their pharmaceuticals with very little effort,” he writes. “This saves money overall for the system, and our transparent pricing saves patients money on high deductible plans for their drugs.”‘
EmansaRx Plus will start with generic drugs and offer some brand-name drugs early next year, Oshmyansky writes. The partnership does not include financial exchanges.
Independent pharmacies such as Cost Plus Drugs, Freedom Pharmacy, Blueberry Pharmacy and ScriptCo Pharmacy are giving up coverage of expensive brand-name drugs, allowing them to negotiate more aggressively to buy widely used generics. cobble. An increasing number of employers, patients, start-up PBMs and even traditional insurers like Harrisburg, Pennsylvania are headquartered in Capital Blue, said Antonio Ciaccia, president of consulting firm 3 Axis Advisors. Cross is looking to work with Cost Plus Drugs instead of working with a former pharmacy benefits manager. who worked as a data analyst for Cuban’s company.
“That is creating pressure on legacy PBMs to explain why their prices are so bad compared to what a startup is offering,” he said, adding that the Traditionally, PBM’s business model has focused on using its size to negotiate better prices. “Cuba and his company are pulling the rug away from them.”
Correction: Story has been updated to reflect that the partnership between EmansaRx and Cost Plus Drugs and EmansaRx Plus is not a subsidiary of the Buyers Health Business Group.
