It's Not About Mark Cuban. It Never Was.

I’m a bit harried today, so apologies for the brevity. I’m in transit to my 30th high school reunion, which I hope be a wonderful reminder that we’re all doing better than we were at 17.

If you are an academic, one very easy and fun and useful kind of study you can do is comparing the prices that Medicare pays for generic drugs with the prices that Mark Cuban’s Cost Plus Drug Co. charges, then do some math to calculate the savings. (There is always savings.)

A year ago, a group from Harvard did that math on about a hundred meds and determined that Medicare could save about $4 billion a year. Another group of researchers looked at nine urology drugs and figured there was about a billion dollars in savings possible.

And this week comes an analysis of seven oral cancer drugs, where the Mark Cuban savings would be around $700 million a year.

It’s all very interesting and dramatic and it gives everyone the chance to say “Mark Cuban” a lot, which helps bring the story to a wider audience. But this is not really a story about Mark Cuban.

Mark Cuban is a middleman, and I mean that in the nicest possible way. His company buys boring generic drugs at their boring, well-established price, applies a small markup, and then sells them to patients.

In any other industry, this is the boring standard practice. Cuban’s company doesn’t magically make the medicines cheap. They’re already cheap! Probably too cheap!

The question, then, if it’s easy to find cheap generic medicines, is why they’re so expensive for Medicare? And that’s where the real story is.

What’s going on with the PBMs administering the benefit in Part D? Why can’t they get Medicare -- and seniors -- a better deal?

Those are the meaningful questions, and I hope that everyone doesn’t get so enamored with the Cuban name that the real point of these studies gets lost.

• I want to explore this more, but there is a Health Affairs Forefront piece out today that makes what seems like an intuitively true point: price controls have the potential to not just impact the medicines that get hammered by the government, but also the treatments that compete with them. Price-controlled meds have to be placed on Part D formularies, suggesting that competitors may need to toss out additional rebates to keep up.

• This week’s JAMA has a pro-QALY piece that argues that legislative efforts to bar the use of the QALY are “misguided” and show a lack of understanding for how QALYs are used in practice.

• The two items I just referenced have two things in common: they came out of the PORTAL group at Harvard, and they were funded by Arnold Ventures (IYKYK). No one has ever gotten a better return on investment in health policy than John Arnold. It’s amazing.

• The restrict-340B-distribution bandwagon has a new member: Teva. And while we’re talking 340B, Modern Healthcare has a timely piece on the impact of all of the contract pharmacy restrictions on PBMs.

• The Biden Administration is out with a list of the 43 Medicare Part B medicines that broke the IRA’s inflation “speed limit” and therefore will have lower copays. It’s worth looking to see exactly how small the copay reductions are, though.