December 1, 2022
Health care costs are a priority for the millions of Americans who have made their annual elections open to save in 2023. This is especially true for the many Americans who are still looking for ways to save. even after selecting the most affordable options. for coverage available during their employer’s enrollment period.
With the cost of health care and prescription drugs rising, consumers are now turning to unlikely sources of relief: Silicon Valley’s tech billionaires.
USC experts discuss the importance of billionaire tech gurus like Mark Cuban (Cost Plus Drugs) and Jeff Bezos (Amazon Pharmacy and new RPT Amazon virtual clinics) disrupting the healthcare and drug industry on prescription.
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Future success builds on lessons learned from the past
Expert in startups and growth hacking, Paul Orlando directs the Lloyd Greif Center for Entrepreneurial Studies at USC Marshall. He has also co-founded and led startup accelerators and incubators based in Hong Kong, Rome and online.
“Health insurance and prescription drugs – what startups might call ‘boring industries’ are ripe for disruption. And much needed. I don’t think many people rave about their health insurance provider or how cheap their prescription drugs are.
“At the same time, we have seen ethical dilemmas and unintended consequences of trying to start a business with prescription drugs, such as the Oxycontin/Purdue Pharma scandal. With health insurance and drugs in the United States at high costs to the consumer around the world and no results commensurate with those costs, I look forward to disruptions in these industries.
Not exactly the public service act you imagined, but still a step in the right direction
“Healthcare has long been in the crosshairs of tech leaders because the size of the space – the sheer volume spent on healthcare in the United States – is too big to ignore. The pharmaceutical sector is simply a bigger attempt targeted to tease one part of the health care system that perhaps has a greater likelihood of success than to attack all health care at once.
“Are these tech billionaires doing this as part of giving back to society? No not necessarily. Health care is the largest sector of the US economy in terms of cost and the greatest opportunity to build a profitable business. And because it’s so inefficient and fragmented, there’s an opportunity to both cut costs and build a profitable business. So it’s a win-win; it has a social impact, plus it’s good business.
Arvind Bhambri is an associate professor of management and organization at USC Marshall, specializing in strategic change, competitive strategy, business development, and leadership.
Can Mark or Jeff solve our prescription drug cost crisis?
It depends on the drug, explained Karen Van Nuys, health and finance expert at the USC Schaeffer Center for Health Policy and Economics.
“One way to answer this question is from the perspective of a patient who can get imatinib from Mark Cuban’s Cost Plus Drugs for $14.40 a month. If they had gone through their system of insurance and hadn’t used Mark Cuban, they would have potentially had a co-insurance payment of hundreds of dollars a month for this drug, or even more, by the way, this is an extremely effective anti-cancer drug for leukemia patients are frequently put on this drug for life to keep the cancer in remission, so patients who access it for $14.40 a month, not $800 a month co-pay for the rest of their lives, make a huge difference.”
But mail-order prescription services like Cost Plus Drugs have limitations, she warned.
“One of the things to keep in mind is that so far all of these solutions are sold by mail order, which is not ideal for medications like insulin that need to be refrigerated. This is still a problem that needs to be solved. We need to come up with creative models that bypass the insurance system for drugs like insulin and provide low-cost options for patients. You simply cannot do this by correspondence.
(Photo/Karolina Grabowska of Pexels)
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