The news: Mark Cuban’s online pharmacy, Cost Plus Drug Company, signed a deal to sell a biosimilar version of Johnson & Johnson’s drug Stelara, called Starjemza, at a price far below the brand-name list price, and lower than competing biosimilars.

• Cost Plus plans to sell Starjemza for $345 quarterly, or about $1,380 per year.
• For context, J&J’s list price for Stelara (an anti-inflammatory treatment for psoriasis, psoriatic arthritis, Crohn’s disease, and ulcerative colitis) is $25,497 every eight weeks, or about $165,000 per year. List prices for other Stelara biosimilars range from $15,000 to $60,000 per year, per Samsung Bioepsis’ biosimilar market report in October.
• J&J’s Stelara revenues were $10.5 billion in 2024; the first biosimilar launched in January.

The FDA recently proposed new policies to lower costs and shorten timelines for biosimilar drug development and approval. For context, biosimilars are highly similar copies of biologic drugs, analogous to what generics are for brand-name drugs.

Why it matters: Specialty biologic drugs are expensive—they make up 5% of total US prescriptions, but accounted for more than half (51%) of all drug spending in 2024, per the FDA.

• The FDA has approved about 80 biosimilars since 2015 (when the first approval occurred). For context, about 30,000 generic drugs have been approved overall, with about 450 first-time generic approvals occurring since 2015.
• Only a small number of biosimilar drugs under development (just 10% of brand-name biologics) are expected to face copycat competition in the next decade, per an IQVIA study in February.

Market challenges: Biosimilar uptake has been uneven, in part because physicians are hesitant to prescribe the not-quite-exact copies, and also because not all biosimilars are interchangeable (meaning: a pharmacist is allowed to substitute them at retail for a brand-name drug).

However, like brand-name drugs, biosimilars are negotiated by pharmacy benefit managers (PBMs) for price and inclusion on preferred formulary lists. PBMs and insurers tend to favor higher-price brand names that come with large rebates.

Implications for the pharma supply chain: Mark Cuban has long tried to disrupt the traditional prescription drug supply chain with Cost Plus, offering medications at the manufacturer’s cost plus a flat 15% pharmacy fee. Starjemza isn’t its first move into biosimilars, but the drug’s steep discount compared with other Stelara competitors could pose a real challenge to typical PBM pricing negotiations.

Large employer health plans could choose to either contract directly with Cost Plus or pressure their PBMs to add Starjemza to their formularies. The launch will serve as a high-visibility test of transparent drug pricing. But despite growing momentum for direct-to-consumer and transparent pricing models, Cost Plus still faces significant barriers from the entrenched insurance and PBM systems, namely: financial incentives it can’t match, and a tangled, insider network of deals and long-standing relationships.

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