Drug Pricing Stewardship from Mark Cuban's Cost Plus Generic Drug Program.

Abstract

Importance: The exceedingly high US spending per capita on prescription medications is mediated, at least in part, by the inefficiencies of existing generic pharmaceutical distribution and reimbursement systems; yet, the extent of potential savings and areas for targeted interventions for generic drug prescribers remains underexplored.

Objective: We aimed to analyze 2021 Medicare Part D spending on generic drugs in comparison with pricing of a low-cost generic drug program, the Mark Cuban Cost Plus Drug Company (MCCPDC), to gauge the extent of achievable potential savings.

Design, setting, and participants: In this retrospective, observational study, we performed a systematic analysis of potential Medicare Part D savings when using MCCPDC generic pricing. The 2023 MCCPDC data, as of August 2023, were obtained from the provider's publicly available database. The 2021 Medicare Part D data and prescriber datasets were obtained from the US Centers for Medicare and Medicaid Services.

Main outcomes and measures: Outcomes included total prescription volume, proportion of drugs with savings, total US dollar Medicare savings, and average weighted price reduction per unit drug. Results were stratified by medical and surgical subspecialties to identify areas for targeted interventions. Subspecialty-wise contribution to total savings versus contribution to total prescription volume was characterized.

Results: Total estimated Medicare Part D savings were $8.6 billion using 90-day MCCPDC pricing, with surgical drugs accounting for over $900 million. Nearly 80% of the examined drugs were more price effective through MCCPDC using 90-day supply. Commonly prescribed drugs in cardiology, psychiatry, neurology, transplant surgery, and urology demonstrated the highest estimated absolute savings. The most disproportionate savings relative to prescription volume were observed for drugs in oncology, gynecology, infectious disease, transplant surgery, and colorectal surgery.

Conclusions and relevance: This study underscores the significant potential for Medicare Part D savings through strategies that address the systemic overpayment for generic medications. We identified key areas for reform as well as specific medical and surgical subspecialties where targeted interventions could yield substantial savings.