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Healthcare

Mark Cuban’s Drug Company Will Soon Be Selling Its Medicine Directly to Hospitals

With its pharmaceutical manufacturing license in place, the company is ironing out the logistics to get needed medicines sent to hospital and clinic partners.
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Dr Alex Oshmyansky
Steven Visneau

Mark Cuban Cost Plus Drug Co. CEO Dr. Alex Oshmyansky is always busy disrupting the healthcare system. The latest iteration? Selling medicines directly to hospitals and clinics to address shortages and help providers save on needed medications.

The 22,000-square foot, $11 million fill-and-finish facility in Deep Ellum received its pharmaceutical manufacturing license from the Texas Board of Pharmacy today, an essential step on the way to selling the drugs made in the facility to providers. As the finishing touches are put on the site, it can contract with providers to ship needed medications to hospitals and clinics.

Oshmyansky says it will take a couple of months to work out the logistics and procurement processes with the local hospitals and finish up the last bit of testing Cost Plus has yet to do with the FDA, but says a September or October is a rough estimate for initial shipments to hospitals.

The company is focused on manufacturing drugs that are in shortage. The FDA keeps a running list of around 180 medicines in its drug shortage database. When I visited, a few vials of the Cost Plus’ 23.4 percent Sodium Chloride Injection sat on Oshmyansky’s desk. The solution, which was manufactured via the robotic machinery in the factory, is listed in the shortage database and is used to replenish lost water and salt in your body or as an additive to total parenteral nutrition, which allows patients to be given nutrition without accessing the digestive tract.

It is just one example of the generic medications that will be made at the facility and sold directly to providers, cutting out the middlemen that often sit between manufacturers and providers or patients and driving up costs.

Deciding which medications to make won’t be easy, so Oshmyansky says he is meeting with hospital systems nationwide to understand the needs and the impact his company can have on improving outcomes and keeping costs low. Many of the shortages are present because these are low-margin products that aren’t attractive for manufacturers to make, but Oshmyansky says Cost Plus will focus on these types of products. “We make the products no one else wants to make,” he says. “Starting out, we will talk with hospitals that will tell us what they need and partner with us.”

The fill-and-finish business is one of the many ways the company seeks to disrupt the way healthcare works today. The organization’s online pharmacy business has made waves by allowing patients to purchase essential medications at steep discounts compared to what they had been paying out-of-pocket or through their insurance. The Annals of Internal Medicine published a study last year that said that Medicare could have saved $3.6 billion in one year if it had bought its generic drugs through Cuban’s company.

Last year, Cost Plus moved into the benefits space after selling directly to consumers exclusively. It partnered with EmsanaRx, a pharmacy benefits manager designed by employers and meant to be a transparent, standalone solution to help commercially insured individuals access affordable drugs via Cost Plus. “We are open to working with PBMs so long as it is on open and transparent terms,” Oshmyansky says. “No rebates, spread pricing, or other games that artificially inflate the cost of pharmaceuticals.”

For a factory the size of the Deep Ellum site, Oshmyansky feels the weight of choosing to make one medicine over another and its potential impact on patient outcomes and saving lives. “With limited capacity, it is a serious obligation,” he says. “We need to make sure we make the best use of our resources and engage as many people as we can.”

Author

Will Maddox

Will Maddox

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Will is the senior writer for D CEO magazine and the editor of D CEO Healthcare. He's written about healthcare…

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