The Mark Cuban Cost Plus Drug Co. circumvented the pharmacy and insurance companies to directly reach customers. Now, it’s going to employers.
Billed as an alternative to brick-and-mortar pharmacies, and a way of getting prescription drugs at a cheaper cost, the company announced on Thursday it will partner with pharmacy benefit manager EmsanaRx, allowing employees whose companies are EmsanaRx members to access low-cost prescription drugs.
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EmsanaRx will collect a 1.5% fee on each insurance claim and collected rebates.
Cuban said both companies are “working to disrupt the current pharmacy supply chain to eliminate the unnecessary markup and profiteering that is burdening businesses and consumers with high drug costs.”
The direct-to-employer pipeline
The pharmacy company’s move is a classic expansion from a direct-to-consumer to direct-to-employer strategy we’ve seen plenty of health startups resort to. In September, the company partnered with Rightway Health, another pharmacy benefits manager that works directly with employers.
Pharmacy benefits managers like Rightway Health and EmsanaRx work directly with drug companies to get rebates, lowering the cost of drugs for the end user they might not see at a traditional pharmacy. And self-insured employers that use them generally like them more than GoodRx types of companies because they get access to more information about how actively employees are using the benefit.
Benefit-focused companies have had a successful year closing out 2022. Startups focused on providing lifestyle, wellness and child care benefits for employees, and taking over some of the benefits-related administrative burden from HR departments, saw more than $1 billion in 2022, just $500 million less than the year prior.
This is in sharp contrast to the trajectory of benefits startups. In 2020, the space only saw $453 million.
But that might start to change in 2023. Large corporations and tech companies, driven toward benefits platforms in an attempt to attract and retain talent, are slashing their budgets and laying off workers en masse, a harbinger that the employee is no longer in control of the hiring market.
Illustration: Dom Guzman
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