ScionHealth’s partnership with Mark Cuban Cost Plus Drug Company is reshaping the traditional hospital pharmaceutical supply chain. Nearly a year into the collaboration, the healthcare system has witnessed cost savings and improved access to critical medications.
Based in Louisville, Kentucky, ScionHealth became the second health system to collaborate with Cost Plus Drugs in May 2023. In a recent discussion with Becker’s, Derek Szesny, PharmD, Vice President of Pharmacy and Clinical Supply Utilization, and Tyler Stewart, PharmD, Senior Director of Pharmacy Operations, shared insights on the impact of this partnership.
- Positive Outcomes from the Partnership
With over 90 hospital pharmacies, ScionHealth has already saved approximately $150,000 through this collaboration. While this figure may seem modest, Dr. Szesny emphasized that it represents significant savings in a market where pharmaceutical costs are already relatively low.
Beyond financial benefits, Cost Plus Drugs has provided greater transparency and solutions for managing drug shortages. The company has access to medications that traditional wholesalers often struggle to supply, including carboplatin, lidocaine, and lentocilin—drugs that have faced prolonged shortages.
The partnership has also helped ScionHealth navigate urgent medication shortages. For instance, during Hurricane Helene, flooding disrupted a Baxter facility responsible for producing 60% of the nation’s intravenous (IV) fluids. Although Cost Plus Drugs couldn’t completely offset the shortage, it provided emergency IV fluid shipments to ScionHealth’s service centers, preventing cancellations of critical medical procedures.
Dr. Stewart and Dr. Szesny believe this collaboration is challenging the conventional drug procurement model, which traditionally depends on group purchasing organizations, wholesalers, and integrated delivery networks.
“The transparency that Cost Plus Drugs brings gives us valuable insights and strengthens our ability to advocate for our health system,” said Dr. Szesny.
With rising pharmaceutical costs and lower reimbursement rates, even small cost savings can be impactful for healthcare providers, he added.
- How ScionHealth Utilizes Cost Plus Drugs
ScionHealth operates 75 long-term acute care hospitals, 17 rural community hospitals, and multiple clinics, including oncology centers and physician practices. To optimize its partnership with Cost Plus Drugs, the system follows a three-pronged approach:
Centralized distribution: Dr. Stewart orders around 40 National Drug Codes (NDCs) for the system, utilizing Safecor Health unit-dose packaging centers.
Individual hospital accounts: Each community hospital within the system maintains its own ordering account with Cost Plus Drugs.
Retail pharmacy integration: ScionHealth’s single retail pharmacy operates an independent Cost Plus Drugs account.
“Setting up a new account with Cost Plus Drugs is incredibly fast—less than a day,” Dr. Szesny noted. “It’s as easy as adding a shipping address on Amazon, unlike the 30 to 45 days typically required with traditional wholesale distributors.”
- Future Growth and Expansion
While most of the cost savings have come from generic oral medications in acute care settings, ScionHealth is now looking toward infusion therapy as the next area of collaboration with Cost Plus Drugs.
Dr. Stewart believes that as profit margins shrink in the generic pharmaceutical market, partnerships like this will become increasingly essential for the sustainability of health systems.
“We’ve seen fluctuations in the industry—some manufacturers enter the market while others exit. As drug prices shift and manufacturers consolidate, health systems must explore alternative sourcing options to maintain continuity of care,” he explained.
By leveraging innovative procurement strategies, ScionHealth and Cost Plus Drugs aim to enhance medication accessibility, manage drug shortages, and drive down healthcare costs in the long term.
