Turning the CVS Pharmacy shakeup into easy-to-understand language:
Heads up, the drug price game might be turning into something simpler, thanks to a man named Mark Cuban.
Here's why:
Currently, drug prices at the pharmacy counter are determined by complex, hidden processes controlled by entities called Pharmacy Benefit Managers (PBMs). However, this isn't the full story. Despite the role they play in negotiating price reductions between the pharmaceutical industry and insurance companies, they do so in secrecy. This has led to frequent inexplicable price hikes for meds in America - with US citizens spending on average around $1,200 per year on prescription drugs[1].
Enter CVS Pharmacy, hoping to bring clarity to this opaque pricing model with its new approach. Instead of following the confusing method now in place, the largest pharmacy chain in the nation wants to be paid based on med cost, fixed markups, and operational expenses by PBMs[1].
And guess what? Turns out, Mark Cuban's online pharmacy, the Mark Cuban Cost-Plus Drug Company, has the same idea in its pocket. This company purchases generics directly from pharmaceutical manufacturers, selling them at a fixed markup to customers. They attribute the skyrocketing drug prices to intermediaries, and their proposed transparency in pricing should inevitably help reduce costs for consumers[2].
In Cuban's own words, it's not exactly a money-grabbing venture. He has enough wealth, instead preferring to disrupt the pharmaceutical industry in as many creative ways as possible[2].
So what does this mean for the future of medication prices? It's uncertain just what meds will cost less, but CVS's heads-up to their C-suite confirms that these costs may even potentially drop[1][2].
And here's an interesting tidbit: according to Cornell University, American consumers would be shocked to know the hidden costs they incur by various parties[3]. Plenty of these concealed or added costs lead to the high price of prescription drugs.
In conclusion, Mark Cuban's approach to making medications more affordable by introducing a cost-plus pricing model is now gaining traction with CVS Pharmacy and the rest of the industry. This model aims to empower consumers by providing transparency and reducing expenses. It's a gamble worth considering as the drug pricing landscape continues to evolve.
[1] CNN, 2023. "CVS changes drug prices, thanks to Mark Cuban"
[2] National Public Radio (NPR), 2023. "Examining The Cost-Plus Drug Business Model: Is It A Good Idea?"
[3] Americannaturalcarcare.com, 2022. "10 Facts About the Cost of Prescription Drugs"
