How Does CostPlusDrugs Work: Understanding the Savings Model

Jonathan Kao

Updated on:

CostPlus Drug Company Logo

Cost Plus Drugs is an online pharmacy founded by entrepreneur Mark Cuban. Its main goal is to make prescription drugs more affordable. The company’s approach to pharmaceutical retail is unique as it offers transparent pricing. They add a standard markup to the wholesale cost of medications, eliminating middlemen and offering generic medications directly to consumers. This approach disrupts the traditional model of drug pricing, which often involves multiple intermediaries that can drive up costs.

How Does CostPlusDrugs Work?

FeatureTraditional PharmacyCost Plus Drugs
Drug PricingMultiple layers of middlemen (wholesalers, pharmacy benefit managers) add markups, making drug costs significantly higher for consumers.Transparent pricing model: Cost of the drug + 15% markup + $5 pharmacy fee + $5 shipping fee
Supply ChainComplex network of intermediaries (manufacturers, wholesalers, distributors, PBMs) increases inefficiency and costs.Direct sourcing of generic drugs from manufacturers, cutting out unnecessary middlemen.
FocusProfits for multiple stakeholders in the supply chain.Focus on providing affordable medications to consumers.
InsuranceTypically requires navigating insurance plans, co-pays, and formularies. Cost Plus Drugs can be used with insurance, but often provides cheaper prices outside of it.Direct-to-consumer model, bypassing complexities of insurance billing.
AvailabilityLarge selection of both generic and brand-name drugs.Currently focuses primarily on offering generic equivalents of widely used medications.

Key Benefits of Cost Plus Drugs

  • Significant cost savings on many generic prescription drugs.
  • Transparent pricing makes it easy to understand costs.
  • Accessibility for uninsured or underinsured individuals.


  • Currently a smaller selection of medications compared to large pharmacies.
  • May not always be the cheapest option, especially if you have insurance with good coverage for a particular drug.

Consumers interested in Cost Plus Drugs begin by creating an account on their website. This process involves providing some basic information and is typically completed within a short time frame. Once the account is set up, users can then order their prescription drugs through the platform. Prescription drugs are mailed directly to the customer, further streamlining the process and keeping prices down by reducing overhead costs associated with brick-and-mortar pharmacies.

Key Takeaways

  • Cost Plus Drugs is focused on making prescription drugs more affordable through transparent pricing.
  • Setting up an account on their online platform is simple and grants access to lower-cost generic medications.
  • The company’s direct-to-consumer model bypasses traditional pharmacy overhead to offer cost savings.

Understanding Cost Plus Drug Company

Cost Plus Drug Company has emerged as a disruptor in the pharmaceutical industry, founded with the specific intent to lower drug costs through transparent pricing. This Dallas-based enterprise challenges traditional pharmaceutical supply chains by directly linking manufacturers and consumers.

Business Model and Operations

The business model of Cost Plus Drug Company is centered around transparency and simplicity. They purchase generic drugs directly from manufacturers and sell them to consumers with a consistent markup: a fixed percentage over the cost plus modest fees for pharmacy operations and shipping. Specifically, they mark up the manufacturing cost by 15%, add a $3 pharmacy handling fee, and a $5 shipping fee to the consumer price. There are no hidden costs or surprises for customers, which stands in stark contrast to more opaque traditional practices where the involvement of pharmacy benefit managers (PBMs) often obscures actual drug costs.

Impact on the Pharmaceutical Industry

By sidestepping intermediaries like PBMs and advocating for direct-to-consumer sales, Cost Plus Drug Company is applying pressure on the pharmaceutical industry to become more cost-efficient and transparent. They essentially cut out middlemen to offer lower prices, which may incite a shift in industry standards, potentially leading to broader changes in drug pricing and insurance practices.

Role of Technology in Service Delivery

Technology underpins the operations of the Cost Plus Drug Company, allowing for seamless online ordering and supply chain management. The use of an online platform enables consumers to set up accounts, browse the available medications, and order directly. This method introduces efficiency and convenience while maintaining a clear and straightforward interface that’s crucial for their service delivery. The FDA-approved drugs are then shipped to consumers, reducing traditional retail pharmacy visit needs.

Comprehensive Customer Benefits

Mark Cuban’s Cost Plus Drugs aims to offer critical medication at reduced costs, directly benefiting customers faced with high prescription prices. This model presents clear advantages in several key areas.

Cost Savings and Pricing Structure

Cost Plus Drugs implements a transparent pricing model, which is straightforward: it includes the actual cost of the medicine, adds a flat markup of 15%, a $3 pharmacy handling fee, and $5 for shipping. This structure often leads to significant savings, especially important for those without insurance or with high-deductible plans. Patients with chronic conditions such as diabetes can access more affordable medicine, including insulin, providing financial relief and enhancing their healthcare management.

Prescription Drug Accessibility

Better access to medications is central to Cost Plus Drugs’ mission. People dealing with diverse health issues, from allergies to cancer, can often find the prescription medication they need without the complexity of traditional insurance barriers. The company also streamlines the process of getting prescriptions from the doctor to the pharmacy, simplifying how patients receive their necessary drugs.

Consumer Trust and Company Ethos

The ethos of Cost Plus Drugs centers around building trust with consumers by eliminating hidden costs and markups often encountered with traditional pharmacies. By revealing the actual costs and offering a consistent markup, the company fosters a transparent relationship with customers. This approach potentially disrupts the current healthcare system, including Medicare, by emphasizing the availability of more affordable medicine and contributing to overall trust in the prescription drug market.

Frequently Asked Questions

Navigating the world of prescription medications can be challenging. The Frequently Asked Questions section aims to simplify the process of utilizing Cost Plus Drugs for your medication needs.

What is the process for purchasing medications through Cost Plus Drugs?

To buy medications, customers select their prescriptions on the website, upload their prescription information, and complete the purchase. Cost Plus Drugs then ships the medication directly to the customer’s home.

What are the steps to register for an account with Cost Plus Drugs?

Creating an account involves providing basic personal information, setting up login credentials, and supplying prescription details. This process typically takes about 15 minutes and is done through the Cost Plus Drugs website.

How can customers contact Cost Plus Drugs for inquiries?

For questions, customers can reach out to Cost Plus Drugs’ customer service through the contact options available on the company’s official website. There, one can find an email address, phone number, or a contact form.

What makes Cost Plus Drugs more affordable than competing services?

Cost Plus Drugs ensures affordability by displaying the actual cost of medications, adding a fixed markup, a handling fee, and a shipping charge. There are no hidden charges beyond these listed costs.

How does the pricing at Cost Plus Drugs compare to traditional pharmacies?

Prices at Cost Plus Drugs often undercut traditional pharmacies since they add only a modest markup to the wholesale cost, along with nominal handling and shipping fees.

What are the available methods of payment when ordering from Cost Plus Drugs?

Customers can pay for their orders using various methods such as credit cards, debit cards, health savings accounts (HSAs), and flexible spending accounts (FSAs).