Launched nine months ago, Cost Plus Drugs offers steep discounts on around 350 different generic medications. Generic Crestor, a cholesterol-lowering med, costs $151 a month at the local CVS, a steep discount from the brand-name pill, which runs $329. Cuban sells it for $4.80. Ditto Glucophage, a diabetes drug. The generic sells for $20 at CVS, versus $3.90 at Cost Plus. Or there’s the generic version of antidepressant Zoloft, which is $50 at CVS but $4.20 at Cost Plus.
Cuban can offer such low prices because he bypasses the pharma industry’s many middlemen, including the price negotiators known as pharmacy benefit managers. (It is a huge, notoriously opaque business. Market leader CVS Caremark generated $153 billion in sales in 2021.) Instead, Cuban buys directly from the folks who manufacture the pills, paying them just enough to make it worth their while, then sells them online at a fixed markup of 15%, plus $8 for shipping and fees. It’s not an entirely novel idea. Walmart and Costco are experimenting with similar models. But Cuban, perhaps thanks to his celebrity, is quickly gaining traction. Cost Plus Drugs already claims more than a million customers and says it is growing at a rate of about 10% each week, on track to be profitable in 2023. Cuban is uncharacteristically tight-lipped about revenue; Forbes estimates Cost Plus has booked at least $25 million in sales during its first nine months as an operating concern.
Cuban, who notes that it’s the first company he’s ever put his name on, has invested close to $100 million so far and says he’s all in on the idea and willing to spend “whatever it takes.” It is, in his own words, “legacy defining. If we get this right, this will be the most impactful thing I’ve ever done.”
Read the full story on Forbes: https://www.forbes.com/sites/jemimamcevoy/2022/09/26/mark-cuban-considering-leaving-shark-tank—new-venture-focuses-on-selling-low-cost-drugs/?sh=780d8fc3caa6
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