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Mark Cuban-owned company launches pharmacy-benefit manager
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A pair of new companies are being launched to tackle high drug costs, the latest sign of employer frustration with the middlemen, known as PBMs, whose job it is to keep down the spending.
The Mark Cuban Cost Plus Drug Company PBC and the Purchaser Business Group on Health, a nonprofit coalition of nearly 40 large public and private employers, said they are each starting new pharmacy-benefit management companies.
PBMs work on behalf of employers, labor unions and governments to decide which drugs are available to patients, negotiate rebates on the prices paid for those drugs and process payments to pharmacies. The PBMs pass along much of the savings to their customers. Yet some employers have criticized PBMs for failing to disclose all the rebates and keeping too much of the savings.
The aim of the new pharmacy-benefit managers, their executives said, was to be more transparent about drug costs and share with their clients more of any negotiated savings.
"Pharmacy costs for both public and private purchasers have been the leading cost driver…and the traditional PBMs were simply unresponsive to their concerns," said Elizabeth Mitchell, chief executive of PBGH.
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Mr. Cuban, the billionaire investor and owner of the Dallas Mavericks, is funding the new company with the aim of selling generic drugs at a transparent fixed-rate markup. To do so, it is creating an all-in-one pharmaceutical supplier, combining manufacturing, wholesale distribution, and pharmacy services under one roof.
Mr. Cuban said in an email that he agreed to fund the company after receiving a cold email pitch about three years ago from radiologist Alex Oshmyansky, who is now the company’s CEO.