Cost Plus Medications provides low-cost generic prescription pharmaceuticals, but it is not a substitute for Medicare Part D coverage.

Bill Hearn's medicine for his moderate chronic obstructive pulmonary disease, or COPD, would cost him $275 per month via his Medicare Part D prescription drug coverage through CVS Pharmacy. Nevertheless, the 69-year-old retiree from Knoxville, Tennessee, receives a generic version from a new internet drugstore. That is hundreds of dollars less expensive.

"I'd heard good things about Costplusdrugs.com on Twitter, so I decided to look into it," Hearn said in an email. "Their website is quite user-friendly for checking availability and rates, and I was astonished to see a $75 monthly price for the same prescription" (as a generic). Last year, the price was reduced to $60.50."

Cost Plus Medications can provide considerable discounts on certain prescription prescriptions, but there are certain drawbacks, particularly for Medicare recipients. What Medicare beneficiaries should know about this online pharmacy is as follows.

What Exactly Is Cost Plus Drugs?

The Mark Cuban Cost Plus Drug Co., or Cost Plus Drugs, is a generic pharmaceutical internet pharmacy. The firm, which will be established in January 2022, is named after billionaire entrepreneur and philanthropist Mark Cuban.

According to Cost Plus Medicines, it sells "almost 700 of the most often prescribed generic drugs." It does not sell brand-name or speciality medications.

Cost Plus Medicines is well-known for providing low-cost pharmaceuticals with clear pricing. Every product we offer is priced precisely the same way: our cost + 15%, plus the pharmacy fee, if any," according to the company's website.

Cost Plus Medications provides the following example for a 30-count supply of 400 milligrammes of Imatinib, a cancer medication:

It would cost $44 each month, including shipping.

According to the firm, this figure represents a discount of more than $9,600 over competing companies' retail rates. The comparison is most likely based on brand-name Gleevec, which may cost $10,000 or more each month at the pharmacy. Although generic Imatinib is far less expensive, it can still cost well over $100 per month from large retail pharmacies with a Medicare prescription drug coverage.

Is Cost Plus Medications Compatible With Medicare?

"We are lower than Medicare co-pays, thus we are a terrific site for Medicare patients to buy prescriptions," Mark Cuban said in a direct message on Twitter.

Your Medicare plan will not be engaged if you purchase those lower-cost prescriptions from Cost Plus Drugs. Cost Plus Drugs does not charge Medicare, whether you have a Medicare Part D stand-alone plan or a Medicare Advantage plan with prescription drug coverage. You'd have to pay for Cost Plus Medications drugs out of your own wallet, but it could be worthwhile.

What Impact Cost Plus Medications Has On Your Medicare Part D Coverage

When you fill a prescription via Cost Plus Drugs, you do not receive any credit against your Part D deductible. You only fulfil the Part D deductible by purchasing medications covered by your plan, and Cost Plus Drugs does not charge Medicare Part D plans.

You can still fulfil your Medicare Part D deductible by purchasing additional prescriptions covered by your plan. Because Cost Plus Drugs does not offer brand-name medicines, you may fill them via your Part D plan and fulfil your deductible that way.

If you get most or all of your medicines from Cost Plus Drugs, you might be missing out on a lot of deductible credit. You must continue to pay your premiums, but your Medicare Part D plan will not cover your medications until you reach the deductible.

The Part D Medicare Penalty

If you just take generic medicines, it may be tempting to utilise Cost Plus Drugs and forego Medicare Part D coverage. You may, however, be subject to the Medicare Part D late enrollment penalty. To avoid being penalised, you must have either Medicare Part D or another type of creditable coverage (such as an employment plan) that is at least as excellent as Medicare Part D.

Even if you could save money by utilising Cost Plus Medications instead of Medicare Part D, you'd still be subject to the Part D penalty if you ever signed up (or re-signed up) for Medicare Part D.

The Medicare Part D late enrollment penalty is 1% of the national base beneficiary premium, or $32.74 per month in 2023, for each full month without qualified prescription drug coverage, rounded to the closest ten cents.

For example, if you spent two years without coverage, or 24 months, your monthly penalty in 2023 would be 24% of $32.74, or $7.90 (rounded to the closest ten cents). Every month, the amount is added to your premiums. It may rise or fall in succeeding years based on the national base beneficiary premium, but it never disappears.

Could Cost Plus Medicines Form An Alliance With Medicare?

Cost Plus Medicines is not completely averse to collaborating with insurance carriers. Cost Plus Drugs only works with one insurance plan as of February 2023 — Capital Blue Cross — although the company's website states that "we will be adding more insurance policies in the coming months."

In a Twitter direct message, Cuban stated that the firm is "ready and able to integrate" with government programmes such as Medicare, but added, "but we have not had those negotiations yet."

If Medicare or Medicare Advantage plans reached an arrangement with Cost Plus Drugs, it may have a significant impact on prescription price. "We could save taxpayers tens of billions of dollars if we could sell to Medicare," Cuban wrote.

According to a 2022 research published in the Annals of Internal Medicine, Medicare might have saved around $3.3 billion in 2020 if it had purchased a selection of pharmaceuticals offered from Cost Plus Drugs at the company's pricing. (For comparison, the Congressional Budget Office estimates that the whole Medicare Part D spending for fiscal year 2020 will be around $89 billion.)

Is Cost Plus Medications A Suitable Option For Medicare Recipients?

According to data analysis by the Congressional Budget Office, Medicare participants had an average of 54 prescriptions per year in 2018. According to the statistics, one prescription equals a 30-day supply, resulting in around 4.5 prescription fills every month. Saving even a percentage of those costs might be significant for Medicare enrollees.

Even if you have alternative Medicare prescription medication coverage, Cost Plus Drugs may be a viable choice for possible savings on generic pharmaceuticals.

Yet, Cost Plus Medications have several Medicare-specific drawbacks. Take note of the following extra considerations:

In summary, if you take a medication that has a generic form, it's worth checking the pricing on Cost Plus Medications to see whether you may save money. But, Cost Plus Medications is not a replacement for Medicare Part D, so be careful not to incur fines that might cost you more than you save on prescriptions.