President Joe Biden, like countless other politicians, speaks often of the outrageously high prices for prescription medication but rarely does anything to actually reduce those costs for American consumers.
Billionaire innovator Mark Cuban has figured out how to substantially reduce costs for generic prescription drugs with a new company he launched this year, however, and a recent study showed that the federal government could save several billion dollars if it used his company or adopted the same practices, the Daily Caller reported.
Innovative system for generic prescription drugs
In January, Cuban launched a new company known as Cost Plus Drugs that makes use of a direct-to-consumer system that substantially reduces costs for generic prescription drugs by bypassing wholesale distributors, pharmacies, and insurance companies and shipping the product directly from the manufacturer to the individual.
Over 100 generic prescription drugs are available for direct order at a price of the manufacturer’s cost to produce plus 15 percent plus a flat $8 fee that covers dispensing and shipping costs.
Researchers from Brigham and Women’s Hospital along with Harvard Medical School looked closely at Cuban’s methods and compared them with how the federal government’s Medicare Part D handles prescription drugs and found that billions of taxpayer dollars are being unnecessarily wasted.
The study compared the reported costs for 89 different generic drugs offered by Cost Plus Drugs as well as the prices paid for those exact same generic drugs by Medicare in 2020.
According to the researchers, had Medicare been able to purchase those drugs from Cuban’s company in 2020, it could have saved taxpayers approximately 37 percent on 77 of those 89 drugs, or about $3.6 billion annually.
One of those researchers, Hussain Lalani, posted a thread of tweets outlining some of the key takeaways from the study, and particularly noted in one of those tweets that the estimated $3.6 billion annual savings was actually a rather conservative estimate given the limited nature and scope of the study, and suggested that actual annual savings would likely be much higher.
NEW STUDY: Medicare could have saved up to $3.6 billion in 2020 if it bought 77 generic drugs at prices by Mark Cuban’s @costplusdrugs prices! 💵💵💵
— Hussain Lalani (@DrHussainL) June 20, 2022
Cuban’s system could save taxpayer money
Mark Cuban, and justifiably so, has highlighted this new research on his Twitter account and has been sharing testimonial posts from other users who have shared the incredible personal savings they have enjoyed by using his new Cost Plus Drugs company instead of going through their health insurance of Medicare programs.
As for Medicare, per 2020 data, the federal health insurance program primarily for seniors constitutes the second-largest program in the entire federal budget — following Defense — and represents roughly 12 percent of all federal spending, or about $776 billion.
The Daily Caller noted in a 2019 article that, on top of being one of the most expensive federal programs, it was also among the most wasteful, according to watchdog groups, and that tens of billions of taxpayer dollars could be saved annually with the adoption of various reforms — now, perhaps, including adopting the direct-to-consumer system that Cuban’s company has proven to be cost-effective and successful.