Will M Cuban Take Out Major Pharmacies w/ Cost +

January 31, 2022 02:03 PM ESTUpdated 02:20 PM PharmaManufacturing
Mark Cuban's new cost-plus-15% generic drug company is really a compounding pharmacy
Zachary Brennan
Senior Editor

Shark Tank’s Mark Cuban made a splash last week in the world of drug pricing, pledging to cut out costly PBMs and deliver on a very simple plan with his new pharmacy, and some huge cost savings for consumers.

The company, known as Mark Cuban Cost Plus Drug Company, pledges to only charge a 15% mark-up for its generic drugs, offering alternatives to a market often prone to shortages, and expensive generic drugs (think Martin Shkreli) due to lack of competition.

But while the company labels itself a drug company, and pledges to get into generic drug manufacturing of its own in a Houston-based cGMP facility, the company is really planning to operate as a compounding pharmacy.


Alex Oshmyansky

“At launch, we are planning as functioning primarily as a 503(b) compounding pharmacy specifically targeting drugs on the FDA shortage list,” CEO Alex Oshmyansky told Endpoints News via email. “That will allow us to be more agile and address drug shortages as they arise.”

Becoming a 503(b) compounding pharmacy, also known as an outsourcing facility, means the firm will be less regulated than a typical generic drug company, but Cuban’s company will need to register with the FDA, be inspected by the FDA, and adhere to specific manufacturing requirements.

“We fully intend to register as an outsourcing facility with the FDA, though, when we are far enough along that we are eligible,” Oshmyansky said.

For now, the hundreds of drugs available for purchase via the company’s website are all sourced from other generic manufacturers.

The only generic drug currently listed in the FDA’s National Drug Code Directory with Cuban’s company as the labeler is for a generic version of the anti-worm drug albendazole.

“The other products will be listed once we are far enough along that we can be granted NDCs,” Oshmyansky said.

The distinction between operating as a generic drug company and as a compounding pharmacy means Cuban’s company likely won’t be submitting its own generic drug applications to the FDA for new generic products, instead of piggybacking off other generic drug submissions, at least to start.

Other players in this field have similarly pledged to crack down on drug shortages in the US, including Richmond-based Phlow, which has vowed to end essential medicines shortages in the US, and Utah-based nonprofit Civica Rx, which is manufacturing sterile injectables in shortage for hospital clients, as well as targeting higher-priced generics via another initiative, where it plans to submit its own ANDAs in partnership with health plans.

But the cost component that Cuban is targeting remains crucial.


Allan Coukell

Allan Coukell, Civica VP of policy, told Endpoints, “For many products, the generic industry does a fantastic job of delivering low-cost drugs to patients but there are some products where costs remain high so having someone focused on delivering those in a cost-plus model is still novel.”

In addition to the Cuban-backed Houston manufacturing plant, which Oshmyansky said “is about half-way finished with construction,” Cuban is also planning to run his own PBM, as well as a cash-only pharmacy, where consumers can buy more of these cost-plus-15% drugs licensed via the online pharmacy Truepill.

But more is coming, and Oshmyansky said the company has plans for a biologics license application too, which will likely take more time to bring to market than a generic drug.

“At the moment, we are actually taking a BLA through the FDA approval process for a product we intend to make at the facility. We are not disclosing what the product is yet, though,” Oshmyansky said, noting that the company has every intention of complying with FDA inspections.

“Structural steel is up now, and we are beginning to put up the walls and piping next week. So nothing really for the FDA to inspect at the moment, but certainly plan to have it inspected as soon as is appropriate,” he added.