How Mark Cuban helped a Cherry Hill business exec cut prices for the drug that keeps him alive

For decades, the drug that keeps Drew Katz alive sold for less than $1 a pill.

Then its manufacturer started to raise the list price — slowly at first, then sharply, increasing it in 2015 to more than $200 a dose. Even when generic versions came along to treat the condition, called Wilson disease, the price stayed high.

It made no sense to Katz, 51, who needs the drug to prevent a toxic buildup of copper in his body. A Cherry Hill business executive and the son of the late Inquirer co-owner Lewis Katz, he can afford the medication. But he knew others could not — and it outraged him that the price didn’t seem to follow the laws of supply and demand.

Unlike most patients with a rare disease, Katz was in a position to take on the problem. Through his family’s NBA connections, he knew another businessman who had experience with the opaque world of U.S. drug pricing: billionaire Mark Cuban.

The result: Cost Plus Drug Co., an online pharmacy that Cuban cofounded, is collaborating with a generic drug maker, Dr. Reddy’s Laboratories, to sell the drug direct to consumers for $3.55 a pill. In announcing the plan on Tuesday, Cost Plus also said it would sell an alternative treatment for about $4.40 a pill.

Cost Plus does not accept most insurance plans. By bypassing insurers and other intermediaries, the company is able to sell many medicines at well below the list prices for their name-brand equivalents, and also for less than the generic versions made by others. The company promises big savings for those with high-deductible insurance plans or no insurance at all.

Cuban is better known as a tech entrepreneur, majority owner of the NBA’s Dallas Mavericks, and a judge on the reality show Shark Tank. When he launched Cost Plus in 2022 with cofounder Alexander Oshmyansky, a physician, they pledged to mark up drugs by no more than 15% from their wholesale price, adding a flat $3 pharmacy fee and $5 for shipping.

Within a few months of the company’s closely watched launch, a study in Annals of Internal Medicine found that Medicare could have saved up to $3.3 billion in 2020 had it been able to purchase 77 generic drugs at Cost Plus prices.

The approach intrigued Katz, a longtime board member of an advocacy group for patients with Wilson disease. He had met Cuban through NBA circles, and decided to seek his help. (Katz’s father, who died in 2014, was principal owner of the former New Jersey Nets.)

Katz told Cuban how the prices for the lifesaving drugs had soared in just a few years, even though their chemical formulation was essentially unchanged.

He also described his own experience with Wilson disease, which affects 1 in 30,000 people, often presenting as a medical mystery.

When Katz was growing up in Cherry Hill, his right leg sometimes dragged when he tried to run, and his arms felt clumsy. His doctors said there was nothing wrong with him.

Then at age 10, while Katz was at summer camp in the Poconos, a new symptom emerged: His eyes developed the yellowish tint that signals jaundice.

At Children’s Hospital of Philadelphia, physicians determined he had Wilson disease by using a special lamp to reveal coppery rings, called Kayser-Fleischer rings, around the irises of his eyes.

The condition was so rare that University of Pennsylvania medical students, having seen the telltale rings only in a book, wanted to see them in person. Katz saw his first business opportunity.

“They all lined up outside my room,” he said. “I charged each of them a dollar.”

He began to take a medication called penicillamine, which binds to copper so it can be excreted by the body. He later switched to a similar type of drug, trientine, because it has fewer side effects, taking four or five pills a day.

Before the drugs were developed (penicillamine came first, in the late 1950s), the consequences of having the disease were grim. As copper built up in their bodies, patients experienced symptoms such as seizures and liver failure. Many died by age 30.

“If you don’t take this drug, or some version of it, and you have Wilson disease, you die, period, full stop,” Katz said. “And you die a pretty horrific death.”

Merck & Co. won FDA approval for its brand-name version of trientine in 1985, and at first charged about $100 for a month’s supply — less than $1 a dose. The rights to make the drugs changed hands several times, and were acquired in 2010 by Valeant (now called Bausch Health). Soon, it began ramping up its prices, to a high of more than $200 a dose.

Bausch did not respond to a request for comment.

For Katz, the list price would have approached $1,000 a day. He didn’t pay that amount out of pocket, as he has health insurance through his billboard and real estate business.

As a board member of the Wilson Disease Association, Katz decided to apply his business expertise to helping others with the disease who were struggling to afford the lifesaving medicine.

But he couldn’t understand why, even after several generic versions became available, the average list price, at first, remained above $150 a pill.

“It’s all opaque, and it doesn’t make any sense to me,” he said. “I’m a free-market person. I believe in capitalism. But not when it comes to people’s lives.”

Katz started to learn about the complex interplay between manufacturers, insurers, and pharmacy benefit managers. A family friend with experience in the generic-drug industry helped him get in touch with Dr. Reddy’s, based in India, and Katz secured the company’s commitment to make a generic version.

All he needed was a distributor. That’s where Cost Plus came in.

Katz wrote up a description of the problem for Cuban’s chief of staff and heard back from Cuban almost immediately.

“Mark jumped all over it,” he said. “I’ve never seen anything happen so quickly in my life.”

For the two generic Wilson disease drugs, the current Cost Plus prices are about 98% cheaper than what Medicare paid in 2021 per dose of two name-brand versions. They also are more than 90% cheaper than the average price that Medicare paid that year for other generic versions.

Cost Plus lists one of them, trientine HCl, at $3.55 a dose. Medicare paid an average $55.20 per dose of trientine made by other generic companies and $171.56 a pill for Syprine, the brand-name version made by Bausch Health, which has U.S. headquarters in Bridgewater, N.J.

In a joint news release from Cost Plus and Dr. Reddy’s, Cuban said it was a team effort.

“By combining the expertise and resources of our two companies, we aim to alleviate the financial burden faced by WD patients and increase access,” he said.

Even at the list price from Cost Plus, patients still face significant expenses. Four daily doses of trientine total more than $14 a day, and more than $5,000 a year. But that outlay is well below what someone with limited insurance would spend to buy the drug from other suppliers, Katz said.

“I wasn’t solving this for myself,” he said. “I have insurance. I can afford my medication. I’m fine. I wanted to solve this for the community of my brothers and sisters in health.”