Cost Plus Drugs founder and CEO Dr. Alex Oshmyansky, left, and Capital Blue Cross Vice President of Pharmacy Strategy and Services Samir Mistry gave the keynote presentation at the recent Lehigh Valley Business Coalition on Healthcare annual conference. The two discussed the first- and only-of-its-kind collaboration between Capital Blue Cross and Cost Plus Drugs.

When Capital Blue Cross announced in October 2022 that it had become the country’s first health plan to collaborate with the start-up Mark Cuban Cost Plus Drugs, it set a precedent for the industry. It also opened a new door for Capital members to reap sizable savings on their medications.

Capital remains the only health insurer in the nation collaborating with Cost Plus Drugs. That relationship recently brought Cost Plus Drugs founder and CEO Dr. Alex Oshmyansky to Pennsylvania to discuss drug access and affordability with members of the Lehigh Valley Business Coalition on Healthcare.

“Full credit to Capital,” Oshmyansky said. “A lot of organizations say, ‘We believe in innovation. We want to be innovative.’ But in my own experience relatively few actually are. Capital very much is.”

lowering drug costs
Attendees packed the room for Mistry's and Oshmyansky's presentation on the historic Capital Blue Cross-Cost Plus Drugs collaboration.

Conquering the Challenge

The Cost Plus Drugs model is simple on the consumer side. Billionaire entrepreneur Mark Cuban set out to shake up the pharmaceutical industry with transparent pricing and minimal markups and fees. The online pharmacy charges consumers only 15% more than it pays to buy a drug from the manufacturer, along with a $3 per-prescription dispensing fee and $5 for shipping.

Capital’s challenge was replicating that simplicity on the health insurance side, according to Samir Mistry, Capital’s vice president of pharmacy strategy and services.

“Because (those within the healthcare industry) are used to complicated implementation, simplification actually makes it harder,” Mistry said. “So that was the hard part, figuring out a way to operationalize and reflect Cost Plus Drugs’ price on their website into our system so we can process claims.”

“The existing infrastructure is very complicated, so that’s where you do actually have to create a fair amount of true innovation,” Oshmyanksy said. “How do we reverse things from the convoluted system we have in the industry backward to simple commerce?”

Eventually, Capital and Cost Plus Drugs worked out the operational challenges, allowing Capital members to use their insurance coverage on the Cost Plus Drugs website – something no other insurer can do.

"They’re generally seeing discounts of 30% to 40% of the standard price.”
— Samir Mistry, Capital Blue Cross vice president of Pharmacy Strategy and Services

The Start of Serious Change

Capital’s collaboration with Cost Plus Drugs is doing precisely what both companies intended: saving members and employer groups money – in some cases, lots of it.

“Any member with prescription coverage that’s a part of Capital Blue Cross or in our community, anyone who signs up and sees a savings opportunity, they’re generally seeing discounts of 30% to 40% of the standard price,” Mistry said. “In some cases, especially in our Medicare population – because it’s available in Medicare Part D and commercial coverage for us at Capital – the highest I’ve seen is a 98% savings.”

Mistry said the more dramatic savings, such as the 98% example he cited, surround generic oncology and specialty drugs, and can save employers or Medicare members hundreds or thousands a month.

“One of our Medicare members is taking one of the (generic) oncology meds, and that’s roughly $34 (as of June 7, 2023) on the Cost Plus website versus $712 (at CVS through GoodRx),” he said. “This is a major savings for someone who’s on a fixed income, living paycheck to paycheck.”

Capital’s data has shown steadily increasing month-over-month member usage and savings through Cost Plus Drugs.

Still, Mistry notes, there is room to improve.

lowering drug costs
Mistry and Oshmyansky discuss how the Capital Blue Cross-Cost Plus Drugs collaboration is driving down costs for some Capital members.

“Every drug is not available through Mark Cuban Cost Plus Drugs. That’s OK,” he said. “In innovation and disruption, it’s not going to be perfect.”

Capital’s next step is targeted outreach to members who might not yet be aware of potential savings through Cost Plus Drugs.

“We’re going to do focused initiatives towards them,” Mistry said. “If they save money through the Mark Cuban program, then our employer groups, our plan sponsors, our company, everybody saves money. … So our focus point is always on the member.”

“I hope the relationship with Capital is a spark that ignites change throughout the industry.”
— Dr. Alex Oshmyansky, founder and CEO of Mark Cuban Cost Plus Drugs

Oshmyansky credits Capital for having the vision to break new ground.

“I hope the relationship with Capital is a spark that ignites change throughout the industry,” Oshmyansky said. “I hope it brings attention to the fact that this is a real issue, that (high drug prices are) hurting real people, and hopefully helps bring positive change, not just to the Lehigh Valley and Central Pennsylvania, but to the country.”