3 Big News Stories from January
Every Friday we recap the biggest news story of the week to make sure you don’t miss out on the latest trends, developments, moves and acquisitions in digital health. But in case you missed it (ICYMI) this round-up will catch you up on the top stories from the past month.
#1 Story: Making Meds Affordable: Mark Cuban Launches Online Pharmacy
The story: Billionaire investor Mark Cuban has launched an online pharmacy through “Mark Cuban Cost Plus Drug Company” (MCCPDC) for generic drugs that promises steep discounts over traditional distributors. The pharmacy is cash-only to avoid working with Pharmacy Benefit Managers (PBMs), which means insurance is not accepted. While paying out-of-pocket could be an issue for people short on cash, the costs of generics at the pharmacy will still be cheaper than what many people pay with insurance.
What you need to know:
- The sky-high costs of medicines have been a problem in the USA for a long time. A recent Gallup poll revealed a whopping 18 million Americans reported being unable to afford at least one doctor-prescribed medication in the previous three months. PBMs in particular have come under scrutiny for the role they play in distributing prescription drugs.
- As a registered pharmaceutical wholesaler, MCCPDC can reportedly negotiate with drug companies, effectively bypassing the middlemen to sell the drugs at low prices. The cost is advertised to be the actual manufacturer price plus a flat 15% margin and $3 pharmacist fee. For example, the leukemia treatment Imatinib retails at $9,657/month compared to $47/month at MCCPDC.
Industry Implications:
- The online pharmacy market is highly competitive with the likes of Ro and Amazon Pharmacy focusing on consumer experience and discounts. However, MCCPDC is going one step further by negotiating prices directly with the drug manufacturers.
- There is a growing trend in shifting consumer shopping patterns in prescription drugs. A study by PYMNTS and Toshiba showed that a larger share of consumers search for preferred medicines with three or more competitors online (23%) than by shopping in person (18%).
- This is part of a much larger ongoing effort to make medicine more affordable. In November, MCCPDC launched its own PBM. With the online pharmacy, the goal is to eliminate the traditional PBM model by integrating the pharmacy, wholesaler and PBM. Also in the plans are the launch of a pharmaceutical factory in Dallas by the end of 2022 to manufacture the drugs distributed. MCCPDC's approach is unique and it begs the question, is this the beginning of a new pharmacy model?
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In other news…
#2 Story Snapshot: Quest Diagnostics Makes a Digital Health Platform Play
The story: Quest Diagnostics announced plans to acquire Pack Health, a patient engagement platform that specializes in addressing chronic conditions and comorbidities. The acquisition adds to Quest’s Extended Care services and creates opportunities to leverage their diagnostic insights. While the Quest and Pack Health acquisition amount was not disclosed, the entry of major laboratory companies into this space shows there are many big players with budgets to spend on digital health. This may lead to a continuation of the high valuation trend we saw in 2021.
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#3 Story Snapshot: Big Tech Making Impact in the Surgical Space
The story: Johnson & Johnson Medical Devices Companies (JJMDC) has entered a partnership with Microsoft to grow and expand JJMDC’s secure and compliant digital surgery ecosystem. This collaboration will allow JJMDC to advance skills, improve workflows and enhance surgical decision making for a better overall customer experience and improve patient outcomes. This may signal a shift in the big tech landscape, focusing on partnerships and consolidation over individual efforts when it comes to tackling healthcare, with recognition of the value add big tech can have for other players in the healthcare ecosystem.
Get the full story here
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