Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky
Masters of Scale
Deep Dive
Why did pharmaceutical companies initially hesitate to work with Cost Plus Drugs?
Pharmaceutical companies were pressured by a cartel of pharmacy benefit managers (PBMs) not to do business with Cost Plus Drugs, threatening to cut off their products from the PBMs' distribution channels.
How did Alex Oshmiansky initially connect with Mark Cuban?
Oshmiansky found Cuban's public Gmail address and sent him an email, which led to a quick response and subsequent investment from Cuban.
What was the key innovation of Cost Plus Drugs?
The company revealed the true cost of purchasing drugs and added a $15 shipping fee, aiming for transparency in pricing.
How does Cost Plus Drugs manage to sell drugs at such low prices?
By bypassing the traditional distribution chain controlled by PBMs, Cost Plus Drugs can purchase drugs directly from manufacturers at lower prices and pass on the savings to consumers.
What was the triggering event that led Alex Oshmiansky to focus on reducing drug prices?
The dramatic price increase of a drug by Martin Shkreli, known as the 'pharma bro,' which highlighted the exploitative practices in the pharmaceutical industry.
Why did Alex Oshmiansky decide to reincorporate Cost Plus Drugs as a for-profit company?
Advice from Y Combinator's Sam Altman suggested that raising funds as a nonprofit would be difficult, leading Oshmiansky to reincorporate as a public benefit corporation to attract investment.
What is the primary focus of Cost Plus Drugs' manufacturing operations?
The company focuses on producing drugs that are in shortage, often neglected by other manufacturers due to low profit margins.
How does Cost Plus Drugs use robotics in its manufacturing process?
The company employs robotic arms in hermetically sealed chambers that are sterilized by vaporized hydrogen peroxide, allowing for rapid and sterile production of medications.
Why does Alex Oshmiansky continue to practice radiology while running Cost Plus Drugs?
Practicing radiology provides him with discipline and decision-making skills, reinforcing the importance of taking responsibility and making timely decisions.
What is the current focus for Cost Plus Drugs in terms of partnerships?
The company is working on securing partnerships with major branded pharmaceutical companies like Johnson & Johnson, Bayer, and Pfizer to expand its product offerings.
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