Scientists with an eye towards helping the battered American consumer have recently published a paper finding that if government health insurance provider Medicare bought 77 generic medications from Mark Cuban’s drug company, it could save $3.6 billion annually.
Billionaire entrepreneur and Shark Tank shark Mark Cuban founded “Mark Cuban’s Cost Plus Drug Company” last year, with a mission statement of pricing down widely-prescribed medications by offering generic versions with less overhead.
Cuban’s drugs are priced by the cost of ingredients and manufacturing, plus a 15% margin, $3 pharmacy dispensing fee, and $5 shipping fee. This can often be half, even a quarter, of what name brand companies cost.
Selling generic ingredients without patented manufacturing or formulas is dropping the prices of drugs like Actos—prescribed for patients with diabetes and retailing at $74.40—to $6.60 for 30 pills.
It’s the easiest explanation in the world to answer why spending on drugs in America, as one study found, exceeds that in all other countries.
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With the FDA’s requirement to prove efficacy and not just safety, it costs a pharmaceutical company a 10-figure investment to send a drug through FDA stage I, II, and III trials. Once passed, patent and other intellectual property laws enacted years ago by the federal government allows the drug company to patent certain methods of making a drug.
Lastly, artificial monopolies are awarded by the FDA to drug companies for specific drugs, removing any market force capable of regulating prices naturally, and leaving the only possible salvation for a country with a per-capita spending on pharmaceutical drugs of $858 to be begging the very government whose laws and departments created the problem in the first place to try and undo them.
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The new study from Harvard concluded that “our findings suggest that Medicare is overpaying for many generic drugs,” and CNET reports that since its publication, Plus Drugs had added a bunch more medications. Hassan Leilani, lead study author, admitted $3.6 billion is probably a conservative estimate.
Featured image: Mark Cuban by Gage Skidmore, CC license
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Big pharma is one of the wealthiest, most politically powerful entities in the world. Kudos to anyone who can stick a pin that grotesque balloon.