340B Incentives Encourage Champagne Prescribing, DTC Models Forget About Deductibles, And Cost Plus Turns Out To Be Cost Minus Savings

Hey all,

Happy Wednesday! Everyone in healthcare loves to market themselves as the savior of drug costs—until you get to the fine print. Whether its 340B hospitals touting “access” while billing two to four times more, pharma hyping cash-pay “deals” that don’t touch deductibles, or Mark Cuban promising radical transparency only to tack on fees that make Walmart cheaper, the story is always the same: costs down in the headlines, costs up on the receipt. These reports make it painfully clear that the industry’s favorite innovation isn’t affordability—it’s finding ever more creative ways to rebrand the same expensive status quo.

Enjoy the rundown!

Jacob Brody (Co-Founder & CEO, ZorroRX) 

(Milliman Report) 340B Outpatient Drug Spending Analysis

Milliman’s July 2025 report, commissioned by PhRMA, finds that outpatient drug spending is consistently higher at 340B disproportionate share (DSH) hospitals compared to non-340B hospitals across commercial insurance, Medicare Advantage, and Medicare FFS, with costs per patient often two to four times greater. The analysis shows that this gap is primarily driven by a heavier use of high-cost drugs at 340B hospitals rather than patient health status, teaching status, or geography, raising concerns that program incentives encourage more expensive prescribing. While the report highlights how 340B is often abused, employers could actually benefit from it by negotiating directly or using a service like ZorroRX—but that would require benefits managers to understand what they’re buying, which brokers, consultants, and PBMs work very hard to prevent (after all, it’s tough to keep hosing people once they find the hose). Full Article

(STAT News) Direct-to-Consumer Drug Sales

Despite growing enthusiasm from pharmaceutical companies and support from President Trump, experts say direct-to-consumer (DTC) drug sales are unlikely to significantly lower overall drug costs for most patients. While companies like Eli Lilly, Novo Nordisk, and Bristol Myers Squibb are offering cash-pay options for high-demand drugs, these prices remain far higher than typical copays or coinsurance under insurance plans and do not count toward deductibles or out-of-pocket maximums. The model may benefit pharma by boosting sales of undercovered drugs like GLP-1 obesity treatments, but it does little to address affordability or equity in access unless plans can figure out how to buy these drugs at the cashpay price. Full Article

(BenefitsPro) Mark Cuban’s Cost Plus prices often higher than insurers' on neurologic medications

A new study published in JAMA Network found that Mark Cuban’s Cost Plus Drug Company was more expensive than traditional insurance for most neurologic medications, with only two of 33 drugs tested being cheaper through the direct-to-consumer pharmacy. Cost Plus is better known than many other generic pharmacies, but patients often find generics cheaper at Walmart or other retail pharmacies. I personally have been excited about finding a drug cheaper until I see the dispensing and other fees added, making it more expensive—it feels a lot like shopping for an airline ticket online before extra fees get tacked on. Full Article.