CVS Announces A New Drug-Pricing Model Following The ‘Pressure’ From Models Like Mark Cuban’s Affordable Online Pharmacy, Report Says

CVS Announces A New Drug-Pricing Model Following The ‘Pressure’ From Models Like Mark Cuban’s Affordable Online Pharmacy, Report Says

At the top of 2022, Mark Cuban first announced the launch of The Cost Plus Drug Company. As previously shared by AFROTECH, the online pharmacy sells generic drugs such as those for HIV, birth control, migraines, and more, at affordable prices. Additionally, no intellectual property deals or insurance companies are involved, and consumers pay with all cash for the medication based on what it costs to make and an additional 15% to cover overhead.

“Our challenge is to keep pushing prices lower,” Cuban told TechCrunch at the time of the announcement. “Our KPI is how much we can reduce the stress of our patients who buy generic meds. When people save a lot of money on their medications, they often will tell others they know that have the same challenges. That word of mouth impacts our growth the most.”

According to a report by Business Insider, the impact of Cuban’s company has far exceeded word of mouth through consumers.

On Dec. 5, CVS announced that it will change its traditional pharmacy reimbursement model to CVS CostVantage, which aims to utilize “a transparent formula built on the cost of the drug, a set markup, and a fee that reflects the care and value of pharmacy services,” per a press release. The ultimate goal is to provide more accessibility to affordable health care.

“We are leading with an approach that will shift how our retail pharmacy is compensated by implementing a more transparent and sustainable model that fairly aligns pharmacy reimbursement to the quality services we provide,” said Prem Shah, PharmD, executive vice president, chief pharmacy officer and president of pharmacy and consumer wellness at CVS Health, in a press statement. “It provides our PBM (pharmacy benefit manager) and payor clients a foundational step towards more pricing clarity for consumers.”

Business Insider reported that the move from CVS came after “pressure from new models like Mark Cuban Cost Plus Drugs” and that Cuban’s pricing model “looks remarkably similar to the program CVS is now adopting.”

In addition, the outlet detailed that Blue Shield of California traded a CVS unit for Cost Plus Drugs for prescription-drug tasks, and Kroger partnered with the company as well, in July 2023.

While time will tell whether CVS CostVantage will live up to its promises, it’s set to launch with PBMs for their commercial payors in 2025, the press release shared.

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