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Reducing men’s health drug costs: exploring the impact of the Mark Cuban Cost Plus Drug Company model on Medicare savings
1Office of Medical Student Research, Oklahoma State University Center for Health Sciences, Tulsa, OK 74107, USA
2Department of Psychiatry and Behavioral Sciences, Oklahoma State University Center for Health Sciences, Tulsa, OK 74107, USA
*Corresponding Author(s):Adam.khan@okstate.edu (Adam Khan)
| History | Submitted: 27 September 2024 | Accepted: 30 October 2024 | Published: 30 December 2024 |
| Copyright: | ©2024 The Author(s). Published by MRE Press. |
In 2022, national health expenditures in the United States were estimated to have grown from 2.7% to 4.3% and increased further in 2023, reaching an estimated $5.2 trillion. Medicare alone, in 2021, accounted for 21% of national health care spending, amounting to $689 billion in total Medicare expenditures. The Mark Cuban Cost Plus Drug Company (MCCPDC) Model offers a solution by providing prescription medications at lower costs. The objective of this study was to assess the effectiveness of the MCCPDC model in reducing men’s health drug costs compared to Medicare Part D. A comprehensive analysis was conducted on the “Men’s Health” drugs available through the MCCPDC. Prices, including dispensing and shipping fees, were collected for the minimum quantity (30 count) and maximum quantity (90 count) from the MCCPDC. Unit costs and total savings were calculated, and unit prices for 30 count and 90 count prescriptions were compared between Medicare and the MCCPDC. Of the 15 medications in our sample, Medicare’s expenditure amounted to $1.8 billion, with the MCCPDC displaying lower prices overall compared to Medicare. Evaluating 30 count prescriptions, 11 of 15 (73.3%) men’s health drugs resulted in total cost savings of $1.1 billion. For 90 count prescriptions, all 15 drugs yielded savings totaling $1.3 billion. Our study findings highlight substantial potential for cost savings if Medicare were to adjust its contracted rates to those currently set by the MCCPDC. We recommend that healthcare providers include the MCCPDC in patient counseling sessions to educate patients about accessing medications at lower prices. Integrating the MCCPDC as a resource can contribute to significant savings and improve medication affordability.
Cite this article
Adam Khan, Karim Kari, Eli Oldham, Jacob Duncan, Matthew Rashid, Matt Vassar. Reducing men’s health drug costs: exploring the impact of the Mark Cuban Cost Plus Drug Company model on Medicare savings.Journal of Men's Health,2024,20(12):57-64 DOI:10.22514/jomh.2024.200
1. Introduction
In 2022, national health expenditures within the United States were estimated to have grown from 2.7% to 4.3% and increased further in 2023, amounting to an estimated $5.2 trillion [1]. Medicare alone, in 2021, accounted for 21% of the national health care spending amounting to $689 billion in total Medicare spending [2]. According to the most recent 2023 Center for Medicare & Medicaid Services (CMS) report, nearly 65.7 million individuals are enrolled in Medicare, with 51.6 million participants enrolled in Medicare Part D, the branch of Medicare that covers most outpatient prescription drugs [3, 4]. As Medicare enrollment is projected to surge to 93 million by the year 2060, it becomes imperative to investigate strategies for curbing Medicare expenditures to ensure the long-term sustainability of Medicare. Given that men constitute roughly 40% of Medicare enrollees, a potential approach to achieve cost savings could involve reducing the expenditure on men’s health medications covered under Medicare Part D [5].
The importance of these medications lies in their capacity to effectively address a wide range of medical conditions specific to men, including prostate cancer, benign prostatic hyperplasia (BPH), erectile dysfunction and many others. The prevalence of these diseases is profound with nearly 3.3 million individuals affected by prostate cancer and a staggering 30 million men affected by erectile dysfunction [6]. Despite the considerable healthcare expenditure in the U.S., a significant portion of Medicare beneficiaries face financial barriers in accessing these essential medications [7, 8, 9]. The economic strain is particularly acute for those on fixed incomes, who may find the cost of men’s health drugs prohibitive, leading to under-treatment or forgoing necessary care altogether. This financial challenge is compounded by the fact that some of the most needed medications for these conditions are not always covered under Medicare Part D or are subject to high out-of-pocket costs, exacerbating the difficulty in managing these health issues effectively. Recent studies, such as the work by Cortese et al. [10] (2023), have highlighted the economic burden of urological medications on patients, including those covered by Medicare, and proposed models like the Mark Cuban Cost Plus Drug Company (MCCPDC) as viable solutions to mitigate these costs. The urgent need for more affordable medication options is clear, as the high prevalence of men’s health conditions combined with prohibitive drug costs can significantly diminish quality of life and lead to severe health complications if left untreated [11]. Addressing the affordability and accessibility of these drugs is paramount to ensuring comprehensive healthcare for men, particularly those dependent on Medicare for their health needs. In an effort to take on the challenge of rising drug costs, the Mark Cuban Cost Plus Drug Company (MCCPDC) has emerged as an innovative solution. Through its pricing strategy and patient-centered approach, the MCCPDC aims to provide a range of prescription medications at lower costs compared to traditional pharmaceutical companies, aiming to lessen the financial strain experienced by individuals seeking prescription drugs [12].
The company’s approach involves bypassing traditional markups and middlemen in the pharmaceutical supply chain, offering medications at cost-plus pricing—the cost of manufacturing plus a small margin. This model could alleviate the financial burden experienced by Medicare beneficiaries who rely on expensive medications. The focus of our study centers on evaluating the effectiveness of the MCCPDC in reducing the costs of men’s health drugs when compared to the 2021 Medicare Part D contracted rates. Specifically, we investigate to what extent the MCCPDC can lower the financial burden on Medicare beneficiaries by offering alternative, more affordable options for men’s health medications. While other studies have highlighted potential benefits of the MCCPDC’s pricing model for various healthcare programs, no study has specifically examined its impact on men’s health drugs covered under Medicare Part D. By conducting this thorough assessment, we aim to identify strategies that could improve access to high-quality men’s healthcare while promoting cost efficiency within the Medicare framework. Our analysis explores the potential financial implications for Medicare if it were to adopt the MCCPDC’s pricing for men’s health medications. With Medicare expenditures expected to rise dramatically in the coming decades, adopting cost-saving strategies is essential to ensure the program’s long-term sustainability. By highlighting the innovative pricing approach offered by the MCCPDC, we hope to contribute to ongoing efforts to address financial challenges facing Medicare beneficiaries, while also proposing measures to reduce Medicare spending and secure the program’s future viability.
2. Methods
2.1 Reproducibility and study design
We conducted a cross-sectional analysis to evaluate the potential cost savings for Medicare by considering the prices offered by the MCCPDC. This study was conducted in adherence to the best practice recommendations outlined by CHEERS (Consolidated Health Economic Evaluation Reporting Standards). The methodology employed in our study was based on previous studies conducted by Cortese et al. [10] and Lalani et al. [13], which involved a comparative analysis of pricing between the MCCPDC and Medicare. In order to uphold the principles of transparency and reproducibility in the research findings, the comprehensive methodology and protocol were made publicly accessible by uploading them onto the Open Science Framework (OSF) platform [14].
2.2 Definitions
To enhance clarity, we define key terms used in our study.
• “Count” refers to the number of pills or doses per prescription. For example, a “30 count” prescription means it contains 30 pills, and a “90 count” prescription contains 90 pills. This is used to indicate the total number of pills in a given prescription.
• “Unit” refers to the price per pill. When we talk about the “unit cost”, we are referring to the cost of one pill.
2.3 Inclusion/exclusion criteria and data extraction
A comprehensive comparison was conducted for “Men’s Health” drugs available on the MCCPDC website for this study. We decided to include the medications listed under the “Men’s Health” category on the MCCPDC website given their extensive use and effectiveness in addressing preventative health concerns commonly faced by men. Drugs that were not accessible for comparison in the 2021 Medicare Part D spending data were excluded. Additionally, drugs from the MCCPDC that were not 30 count or 90 count quantities, irrespective of their form (e.g., bottle, suspension), were also excluded. We opted to use the 2021 Medicare Spending as a reference point for Medicare spending in the current study, as it was the most up-to-date publicly available dataset at the time of our study. The cost evaluation, conducted in this study, strictly considers the direct monetary expenditures and potential savings for the Medicare program. It does not account for indirect societal costs or patient out-of-pocket expenses, given our chosen Medicare-centric perspective.
To estimate Medicare Part D expenditures for 2021, a conservative methodology was employed. In cases where multiple strengths were available, the dosage with the highest cost was selected to provide a conservative estimate of potential cost savings. The prices of the drugs, including fees for pharmacy dispensing and shipping, were factored into calculating the unit cost. When collecting Medicare data, we conducted searches within the data set using the generic names listed on the MCCPDC website. As there were no brand-name drugs included in this study, our analysis focused solely on the spending related to generic medications. Two authors independently extracted and calculated the unit cost and total savings in a blinded, duplicate manner. Any discrepancies arising during the extraction and calculation process were addressed and resolved during a consensus meeting held by the authors.
2.4 Data analysis
To assess potential savings in Medicare, a comparison was made between the standardized unit prices for 30 count or 90 count periods between Medicare and the MCCPDC. The calculation of this difference involved multiplying the unit price calculated for the MCCPDC by the volume-adjusted quantity of units dispensed to Medicare beneficiaries in 2021. Publicly accessible data from the Medicare Part D Prescribers by Provider and Drug dataset served as the source for this data. In determining the unit costs, the prices of the highest-priced 30 count and 90 count items included the additional $5 shipping costs. These adjusted prices were then divided by their respective quantities to obtain the unit costs. All calculations and analyses were conducted using Google Sheets, and the formulas are available on OSF [15].
3. Results
The selection process for the 15 medications analyzed is outlined in Fig. 1, which includes the exclusion of drugs that did not meet pricing criteria or were not accessible in the 2021 Medicare Part D data. For the 15 drugs in our sample, we found that Medicare’s expenditure amounted to $1.8 billion. Our study reports that if Medicare’s contracted rates in 2021 were those currently set by the MCCPDC in 2023, Medicare could save a potential $1.3 billion, as seen in Table 1. When evaluating 30 count prescriptions, 11 of 15 (73.3%) “Men’s Health” drugs resulted in cost savings of $1.1 billion, with an overall cost reduction of $892 million when all 15 estimated prices were considered. On average, 30 count prescriptions were 36.8% less expensive than Medicare prices. For 90 count prescriptions, all 15 drugs resulted in potential savings for Medicare, totaling $1.3 billion. When examining the percent difference, the MCCPDC estimated price for 30 count prescriptions varied from 95.5% in savings to a potential cost increase of 46.8% in Medicare spending. In the case of 90 count prescriptions, the percent difference in cost savings ranged from 19.6% to 96.1%.
Fig. 1.Flow diagram for medications inclusion. MCCPDC: Mark Cuban Cost Plus Drug Company.
| Generic Drug Name | Total Dosage Units 2021 | Total Spending 2021 | Total Cost 30 ct | Δ30 ct | % Difference 30 ct | Total Cost 90 ct | Δ90 ct | % Difference 90 ct |
| Abiraterone Acetate | 21,245,247.00 | $601,230,706.57 | $27,335,551.14 | −$573,895,155.43 | −95.45% | $23,558,618.34 | −$577,672,088.23 | −96.08% |
| Alfuzosin HCl ER | 57,807,008.00 | $25,184,312.92 | $21,773,973.01 | −$3,410,339.91 | −13.54% | $11,497,171.59 | −$13,687,141.33 | −54.35% |
| Doxazosin Mesylate | 178,078,061.68 | $54,881,306.98 | $70,637,631.13 | $15,756,324.15 | 28.71% | $38,979,309.06 | −$15,901,997.92 | −28.98% |
| Fesoterodine Fumarate ER | 13,267,811.00 | $162,783,115.97 | $9,641,275.99 | −$153,141,839.98 | −94.08% | $7,282,554.04 | −$155,500,561.93 | −95.53% |
| Oxybutynin Chloride | 228,668,102.26 | $58,975,611.69 | $70,124,884.69 | $11,149,273.00 | 18.90% | $29,472,777.62 | −$29,502,834.07 | −50.03% |
| Oxybutynin Extended Release (ER) | 192,058,300.57 | $146,899,383.27 | $78,103,708.90 | −$68,795,674.37 | −46.83% | $43,960,011.02 | −$102,939,372.25 | −70.07% |
| Prazosin HCl | 66,468,049.41 | $39,842,326.46 | $35,006,506.02 | −$4,835,820.44 | −12.14% | $23,189,963.91 | −$16,652,362.55 | −41.80% |
| Sildenafil Citrate | 22,902,258.32 | $35,254,914.21 | $7,939,449.55 | −$27,315,464.66 | −77.48% | $3,867,936.96 | −$31,386,977.25 | −89.03% |
| Solifenacin Succinate | 51,681,759.65 | $77,422,480.80 | $18,433,160.94 | −$58,989,319.86 | −76.19% | $9,245,292.56 | −$68,177,188.24 | −88.06% |
| Tadalafil | 13,722,395.63 | $103,140,557.65 | $5,305,992.98 | −$97,834,564.67 | −94.86% | $2,866,455.98 | −$100,274,101.67 | −97.22% |
| Tamsulosin | 1,370,142,868.40 | $304,999,225.08 | $447,580,003.68 | $142,580,778.60 | 46.75% | $203,999,049.30 | −$101,000,175.78 | −33.11% |
| Terazosin HCl | 140,969,135.00 | $38,379,365.38 | $55,917,756.88 | $17,538,391.50 | 45.70% | $30,856,577.33 | −$7,522,788.05 | −19.60% |
| Tolterodine Tartrate | 13,238,878.79 | $17,701,479.12 | $10,149,807.07 | −$7,551,672.05 | −42.66% | $7,796,228.62 | −$9,905,250.50 | −55.96% |
| Tolterodine Tartrate ER | 36,191,827.00 | $121,879,843.24 | $38,604,615.47 | −$83,275,227.77 | −68.33% | $32,170,512.89 | −$89,709,330.35 | −73.60% |
| Vardenafil HCl | 18,178.00 | $505,305.19 | $146,454.09 | −$358,851.10 | −71.02% | $143,222.44 | −$362,082.75 | −71.66% |
| Totals Cost and Average % Change | 2,406,459,880.71 | $1,789,079,934.53 | $896,700,771.55 | −892,379,162.98 | −36.83% | $468,885,681.65 | −$1,320,194,252.88 | −64.34% |
| ct: count; HCl: Hydrochloride. |
Among the drugs in our sample, abiraterone acetate demonstrated the highest savings potential, amounting to $573 million. For 30 count prescriptions, savings ranged from $358 thousand to $573 million, with only one drug (vardenafil HCl) showing savings below $1 million. In the case of 90 count prescriptions, the range of savings varied from $362 thousand to $577 million, with an average of $88 million saved. However, not all medications offered cost savings. Among these drugs, tamsulosin exhibited the most significant savings difference between Medicare and the MCCPDC rates. Medicare’s rates for 30 count tamsulosin prescriptions offered $142 million in savings versus the MCCPDC’s pricing. In contrast, the MCCPDC’s rates for 90 count tamsulosin prescriptions provided $101 million in savings compared to Medicare’s rates. The results are visualized in Fig. 2, illustrating the reported spending for Medicare alongside the estimated Medicare spending derived from pricing estimates for both the 30 count and 90 count units.
Fig. 2.Total cost for Medicare, MCCDPC (30 ct), and MCCDPC (90 ct). MCCPDC: Mark Cuban Cost Plus Drug Company; HCl: Hydrochloride.
4. Discussion
Our findings demonstrate that the pricing strategy implemented by the MCCPDC has the potential to substantially reduce drug costs for the 15 “Men’s Health” medications observed. We found potential savings of $1.1 billion for the 30 count prescriptions and $1.3 billion for the 90 count prescriptions for Medicare if it were to adopt the prices set by the MCCPDC. Since its inception in 2022, the MCCPDC has served millions of customers and has shown itself to be a competent disruptor in generic drug pricing [16]. Comparable studies, such as those in the fields of oncology and urology, have similarly reported that using the MCCPDC models results in significant savings for customers as well as a reduction in the financial burden associated with prescription drugs [10, 17]. We found that of the 15 medications analyzed, abiraterone acetate had the highest savings potential. Abiraterone acetate has been reported to prolong overall survival in patients with metastatic prostate cancer, making it a medication with potential upside for patients [18, 19, 20]. The notable savings on abiraterone acetate with the MCCPDC could therefore benefit clinicians and patients when deciding on an optimal treatment plan for patients with prostate cancer.
Recently, federal lawmakers have been working to bridge the gap and reduce out-of-pocket expenses for Medicare beneficiaries. In 2022, the Inflation Reduction Act was enacted, aiming to limit the out-of-pocket maximum to $2000 by 2025. Moreover, it empowers Medicare programs to engage in direct negotiations with drug manufacturers, leading to lower rates and a subsequent reduction in costs for Medicare beneficiaries [21, 22]. However, it is crucial to emphasize that this policy exclusively applies to biologics or single-source brand-name medications without a generic alternative, leaving out a broad spectrum of generic drugs from the negotiation process [21]. Considering that brand name medications are generally 80–85% more expensive than their generic equivalents and constitute 74% of the total expenditure on pharmaceuticals in the United States, it is justifiable for policymakers to initially focus on brand name medications for potential cost reductions.
However, prior research has estimated that transitioning from brand name to generic medications could potentially save Medicare $3.0 billion annually and result in Medicare enrollees saving $491.0 million annually in out-of-pocket [23, 24]. These findings, coupled with the fact that generic medications constitute 90% of all prescriptions, underscore a gap in policies that could harness the cost-saving potential and address the unforeseen surge in generic medication prices [25]. Addressing these policy gaps would optimize taxpayer spending and foster the long-term sustainability of Medicare. Although the MCCPDC’s direct cost-plus method may not be universally applicable to every pharmaceutical company, it remains imperative to engage in conversations and implement policies that regulate the pricing of prescription drugs. Despite the Inflation Reduction Act enabling Medicare to engage in direct negotiations with drug manufacturers, it is noteworthy that this policy is limited to a select number of brand name and biological medications, overlooking potential opportunities for cost savings on numerous generic medications, as indicated in the present study.
Further research is needed to compare drug prices between the MCCPDC and other pharmaceutical suppliers to assess the MCCPDC’s competitiveness in the pharmaceutical market.
Evaluating the MCCPDC drug prices across different healthcare fields is essential to determine if similar favorable results can be found. Our study focused on 30 count and 90 count drug costs for men’s health, but future studies should consider alternative drug formats to provide a more comprehensive analysis. Ultimately, prescription drug spending is expected to rise in the United States, as well as the percentage of Americans who cannot afford their prescriptions [26, 27]. Considering that so many Americans encounter difficulties affording prescription drugs due to high out-of-pocket expenses, it is crucial to conduct thorough assessments and comparisons of drug costs.
5. Limitations
Our study, while delivering an extensive examination of potential cost savings for Medicare, does come with certain limitations. First, our primary focus centered predominantly on the financial consequences for Medicare, meaning broader societal costs, such as productivity losses or the wider economic impacts of drug accessibility, were not considered. Despite the senior author’s substantial expertise in pricing analytics spanning various industries, the absence of a dedicated health economist could have left some nuanced health-economic evaluations unaddressed. Our findings, which were based on the pricing of “Men’s Health” medications in comparison to Medicare Part D and the MCCPDC pricing, may not be directly applicable to other drug categories or different healthcare systems due to the study’s cross-sectional design. Furthermore, we relied on publicly accessible datasets, specifically the 2021 Medicare Part D Spending Data.
While this dataset represents the most current publicly available information, it does not account for spending changes that may have occurred between 2021 and 2023. It is important to note that pharmaceutical pricing is a dynamic field, and our study captures a specific moment in time, making it susceptible to future pricing adjustments.
It is also important to note that while abiraterone was a significant contributor to the overall cost savings in our study, the pricing used reflects the generic version of abiraterone, which became available in the United States following the expiration of Johnson & Johnson’s patent in 2018 [28]. By the time of our analysis, generic abiraterone was widely accessible in the U.S. market, and our cost comparisons were based on the generic pricing, not the branded version, Zytiga. This contrasts with Europe, where abiraterone only became available as a generic at the end of 2022 due to a later patent expiration [29]. The timing of the patent loss and subsequent availability of generic versions is critical when interpreting potential savings, as pricing structures can differ significantly before and after generic entry and between countries. Our study, therefore, reflects the real-world pricing conditions for abiraterone in the U.S. during the study period, which already include the cost reductions associated with its generic availability.
6. Conclusions
The findings of our study highlight the significant cost-saving potential for “Men’s Health” drugs if Medicare were to change its current contracted rates to those set by the MCCPDC. We strongly recommend that healthcare providers integrate the MCCPDC into their patient counseling sessions as a possible avenue for medication access. By utilizing the MCCPDC as a resource, providers can offer patients guidance on accessing and affording medications at lower prices, thereby contributing to substantial savings and improving medication affordability for patients.
Availability of data and materials
All datasets upon which the conclusions of this manuscript are based are available on the Open Science Framework (OSF) platform—https://osf.io/3xvqd.
Author contributions
AK and MV—designed the research study. AK—conducted the research. JD—provided help and advice on research design and methodology. KK—analyzed the data. AK, KK, EO, JD and MR—wrote the manuscript. All authors contributed to editorial changes in the manuscript. All authors read and approved the final manuscript.
Ethics approval and consent to participate
Our protocol was reviewed by The Oklahoma State University Center for Health Sciences and was determined to qualify as non-human subjects research, as defined in regulation 45 CFR 46.102 (d) and (f).
Acknowledgment
The authors would like to thank the Vassar Research Team for their contributions to this project.
Funding
This research received no external funding.
Conflict of interest
Matt Vassar reports receipts of funding from the National Institute on Drug Abuse, the National Institute on Alcohol Abuse and Alcoholism, the U.S. Office of Research Integrity, Oklahoma Center for Advancement of Science and Technology, and internal grants from Oklahoma State University Center for Health Sciences—all outside of the present work. All other authors have no conflicts of interest to report.
