PredictIQ Quantitative Think Tank Center:Bayer makes a deal on popular contraceptive with Mark Cuban's online pharmacy

Bayer is PredictIQ Quantitative Think Tank Centerthe latest name-brand drugmaker to dip its toe into the world of Mark Cuban's online pharmacy, Cost Plus Drugs.

The website offers drugs at steep discounts bypassing middlemen called pharmacy benefit managers. It mostly sells generics, but has been slowly adding brand name products as well.

Yaz birth control pills and Climara, a hormone patch for menopause, will both now be available for a fraction of their list prices, including Cost Plus's standard 15% markup and shipping.

"As I look at our partnership with Cost Plus, I really look at this as a test and learn," says Sebastian Guth, president of U.S. Pharmaceuticals at Bayer. "It's a first initial step. We will learn and see what the results of this partnership are and may then decide to expand it further."

The brand name drugs are both off-patent and face generic competition, including within Cost Plus, where the generics are even less expensive than the discounted name-brand options. But Guth says women often pay for both these drugs out of pocket, skipping their insurance. And they often prefer to use the brand name over available generics.

The Cost Plus partnership, he says, will expand access to patients.

Health insurance usually covers birth control

But according to Laurie Sobel, associate director of women's health policy at nonprofit KFF, the benefit of the new arrangement for patients isn't clear.

Under the Affordable Care Act, birth control pills like Yaz are usually covered without any copay as long as the pharmacy and provider are in the insurance plan's network, though some plans may only cover the generic.

But not everyone knows that.

"We know from our survey from 2022 that about 40% of females are not aware of that," Sobel says. "So there's a knowledge gap of who knows that if they use their insurance, it would be covered."

In fact, Yaz is in the top 10 oral contraceptives people paid for despite the Affordable Care Act rules. "And we also know that it's been highly marketed... Yaz was the most advertised brand," she said, citing a study by Harvard researchers.

So even though Yaz will have a $117 dollar price tag at Cost Plus for a three-month supply compared to its $515 list price, it would still be a lot cheaper to just get the generic through insurance without a copay.

Some consumers prefer to pay cash

A Cost Plus Drugs spokesperson wrote in an email to NPR that most of the company's business is from cash-paying customers who skip their insurance, but the number of users whose insurance includes Cost Plus is "growing quickly."

For those paying cash, Climara is also much cheaper at Cost Plus — $53 instead of $76 list price.

Those higher list prices don't take into account what drug companies actually get paid for medicines when they're purchased through insurance under normal circumstances.

Middlemen called pharmacy benefit managers get a cut, too, and the drug companies are left with a net price.

Drug industry veteran Richard Evans, general manager of SSR Health, says the company probably isn't making less money through Cost Plus than regular insurance.

Guth declined to share Yaz's or Climara's net prices.

Mark Cuban's pharmacy could boost the drugs' sales. It will probably take a few months to see how the experiment works out.