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Cost Plus Pharmacy

A pharmacy model that sells generic drugs at acquisition cost plus a fixed markup (typically 15%) and a dispensing fee, bypassing the traditional PBM-driven pricing system.

How It Works

The cost-plus pharmacy model was popularized by Mark Cuban Cost Plus Drug Company (MCCPDC), which launched January 2022 with roughly 100 generic medications and by 2024 carried more than 2,500 generics and a growing brand catalog. The Cost Plus pricing formula is simple and publicly disclosed: manufacturer acquisition cost + 15% markup + $5 pharmacy fee + $5 shipping = patient price. For example, atorvastatin 20mg (generic Lipitor) 90-count bottle was roughly $3.60 acquisition cost + $0.54 markup + $5 pharmacy + $5 shipping = $14.14 total, compared to $130+ retail sticker price at traditional pharmacies. Imatinib 400mg (generic Gleevec) saw roughly 95%+ savings against commercial pharmacy prices, with a 30-day supply around $37 vs. $2,500+ traditional cash price. Cost Plus operates outside the traditional PBM-insurance-pharmacy channel, patients pay directly rather than routing claims through insurance, which means Cost Plus prices don't count toward insurance deductibles or OOP maximums. Medicare beneficiaries can use Cost Plus but should compare against Part D tier placement (Tier 1 preferred generics may still be cheaper through insurance). Cost Plus partners with licensed pharmacies (initially Truepill, later expanded to a proprietary Dallas-area pharmacy and partner pharmacies) and ships nationwide. The model has pressured traditional PBMs to disclose more pricing and has been cited as a major driver of the FTC's 2024 interim PBM report. Similar cost-plus models include Blueberry Pharmacy (Pittsburgh), Affirmed Rx, and Capital Rx's employer-focused offering. Cost-plus economics work best for generics with well-established acquisition costs; branded drugs with complex rebate structures are harder to disrupt.

Related Terms

  • Drug Discount Card, A free card or app (like GoodRx) that provides negotiated prescription discounts at retail pharmacies, separate from insurance.
  • Generic Drug, A medication that contains the same active ingredient, dosage, and form as a brand-name drug, approved after the original's patent expires, typically costing 80-95% less.
  • Out-of-Pocket Cost, The amount a patient pays directly for a prescription drug, including copays, coinsurance, and deductible payments.
  • PBM Spread Pricing, A PBM business practice of charging a health plan more for a drug than the PBM reimburses the pharmacy, retaining the difference as profit.

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About This Definition

This definition is part of the DrugPrice Drug Pricing Glossary, 49 terms explaining how prescription drug pricing works in the United States. All definitions are written in plain language for patients, caregivers, journalists, and healthcare professionals.

this entity is one of the U.S. Medicare prescription-drug pricing concepts that recurs across this site. The definition above is the technical answer; the paragraphs below add the practical context for how the concept connects to the CMS Medicare Part D Drug Spending data data behind every per-entity page on the site.

In the CMS Medicare Part D Drug Spending data data, this concept shapes one or more of the fields that drive the per-entity grades and rankings on this site. The methodology page describes which fields feed into which output; this glossary entry documents the underlying term.

Source: CMS Medicare Part D Spending, 2026.