Cuban’s Cost Plus Drugs starts manufacturing
Dallas billionaire Mark Cuban’s health care venture, Mark Cuban Cost Plus Drugs Company, will begin manufacturing its own drugs at its Deep Ellum facility for the first time Thursday.
The company will make epinephrine, an emergency treatment used in Epipens for allergy reactions, and norepinephrine, a blood pressure medication, according to Cost Plus Drugs CEO and co-founder Dr. Alex Oshmyansky. He disclosed the milestone moment for the company during a White House roundtable on health care costs on Monday.
Cost Plus Drugs sells more than 2,000 generic drugs and 20 brand-name drugs directly to patients at a 15% markup along with a $3 pharmacy fee and a $5 shipping cost. Oshmyansky told the Dallas Morning News by email that it will take a few months for the company to fully understand the expenses behind running the Deep Ellum facility.
Some retail giants have already joined the Dallas Mavericks minority owner. Kroger announced in July 2023 that patients who purchased drugs through Cuban’s company will be able to pick them up at over 2,000 national locations.
Drug shortages have been an issue for hospitals around the country and the Cuban-backed venture looks to solve that issue, Oshmyansky said.
“Cost Plus Drugs is proudly bringing pharmaceutical manufacturing back to the U.S. with advanced robotic and AI computer vision technology that allows us to pivot from making one drug type to another very rapidly in principle, within four hours,” he said. “That way, whatever product is in shortage, we can start making that product. These shortages are driven by (pharmacy benefit managers) and the wholesalers and our dysfunctional model of drug distribution. Together, we can put an end to it.”
Epinephrine has been in short supply since 2012, according to Becker’s Hospital Review. However, there is no shortage around norepinephrine, according to the Federal Drug Administration and the American Society of Healthsystem Pharmacists.
The company, which launched in late 2022 out of its 22,000square-foot-facility in Deep Ellum, has yet to turn a profit for Cuban. But he’s confident that will change after working with pharmacy benefit managers and getting more brands to join him.
“We’re not making money yet, but that’s OK. We’re changing an industry, we’re saving patients,” Cuban told CNBC in a Monday interview. “Our biggest challenge is just adding more brands. And as we add more brands, we’re going to continue just to change the industry more and more.”
Cuban’s marketing pitch for the company has been around its pledge to cut the middlemen out of the drug industry. Pharmacy benefit managers often set up source programs with pharmaceutical wholesalers, Oshmyansky said. It means the biggest wholesalers — Irving-based Mckesson and its competitors Amerisourcebergen and Cardinal Health — control 90% of the U.S. market, according to the Kaiser Family Foundation.
“We are pledging to be transparent in our pricing, publishing our true manufacturing costs of operating and adding a flat markup,” Oshmyansky said. “That way, we are profitable and sustainable, but never extortionate.”
Cuban has previously said Cost Plus Drugs could have also saved his beloved Mavericks nearly $150,000 on medications.
With drug manufacturing imminent, Cuban is already looking to his next move.
“We don’t have unlimited capacity, so once we can get this up and running, then we will look at ways that we can expand it,” Cuban told CNBC. “If we do this right, over the next five years, there will no longer be any more shortages in sterile injectables.”
The company’s next few months will be some of its busiest yet, Oshmyansky told The News.
“We are hoping to start manufacturing pediatric chemotherapy products later this summer when our dedicated chemotherapy manufacturing line is up this summer,” he said. “Otherwise, the goal of our facility is to be agile and be able to adapt as new drug shortages arise. We plan to be constantly making new products as new problems in the supply chain arise.”