Mark Cuban's Cost Plus Drug Company (MCCPDC) has partnered with the Purchaser Business Group on Health (PBGH) on a new venture that aims to lower drug costs for self-insured employers—a move that some experts say may be "pulling the rug out from under" legacy pharmacy benefit managers (PBMs).
EmansaRx Plus launches for employers
On Thursday, MCCPDC and PBGH, a coalition of 40 large public and private employers, launched EmansaRx Plus, a subsidiary of PBGH's PBM EmansaRx. Emansa Rx acts as a supplement to employers' existing drug benefits and helps beneficiaries find discounts and lower-cost medications.
In a press release, the companies said EmansaRx Plus is "a first-of-its-kind supplemental drug discount product designed specifically for employers." The new service will offer beneficiaries access to lower-priced medications through their employers' self-insured plans instead of having to go through a third party with drug discount cards.
EmansaRx will ensure prescriptions from MCCPDC are paid and fulfilled and report all information back to employers. The company will also collect a flat 1.5% fee for each insurance claim and pass on any rebates collected.
"Employers are increasingly recognizing that they're being held hostage by a consolidated industry playing games that cost them more every year without adding value," said EmansaRx CEO Greg Baker. "In partnering with [MCCPDC], we will help employers understand where high-cost drugs are a problem in their current benefit design and give them and their employees access to lower-cost alternatives."
According to Alex Oshmyansky, founder and CEO of MCCPDC, independent consultants have found that customers can save up to 60% on generic drugs through the company's pricing models.
"We could save employers millions of dollars on their pharmaceutical spend with very little effort," Oshmywansky said. "This helps save the system overall money, and our transparent pricing helps save patients with high deductible plans money on their medications."'
Currently, EmansaRx plans to offer the new service to self-insured employers by March 1, 2023. The service will initially include generic drugs and eventually offer some branded drugs. Although it is unclear how many companies have signed up for EmansaRx Plus so far, Baker said talks are underway with a number of employers.
According to Modern Healthcare, EmansaRx Plus is MCCPDC's "first foray outside of the direct-to-consumer market," which some experts say has limited the company's growth.
"This could mean hockey-stick type growth for [MCCPDC], which has the potential to further decrease drug costs for their customers," said David Dobrzykowski, an associate professor of supply chain management at the University of Arkansas who directs the school's Walton College Healthcare Initiatives. "The move may also force the hand of PBMs to increase the transparency of their pricing and contract terms with manufacturers and self-funded employer health plans, both of which would bring enormous benefit to consumers."
Antonio Ciaccia, president of 3 Axis Advisors, expressed a similar sentiment, saying that more employers, patients, startup PBMs, and insurers are looking to working with MCCPDC.
"It is creating pressures on legacy PBMs to explain why their prices have been so bad relative to what a startup is offering," Ciaccia said, adding that traditional PBM business models focus on using their size to negotiate better prices. "Cuban and his company are pulling the rug out from under them."
However, Ciaccia noted that Cuban still faces challenges, such as whether he can employ traditional benefits designs without being affected by PBM "market distortions that would undermine his ability to offer low cost medications with the savings actually accruing to patients and plan sponsors." (Silverman, STAT+ [subscription required], 12/8; Kacik, Modern Healthcare, 12/8; Twenter, Becker's Hospital Review, 12/8; EmsanaRx, GlobeNewswire, 12/8)