YouSaid · the spoken record

Alex Oshmyansky

lines on the record: 39
first: 2024-12-03
most recent: 2024-12-03
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Right now, our big program is getting not just the generic manufacturers to work with us. So we have pretty much every generic drug available now. The next step is getting the big branded companies to work with us as well. We're making inroads there. Johnson& Johnson, Bear, Pfizer on various products. So it's moving along. We also sell drugs in bulk to health systems, institutional clients, independent pharmacies, doctors, clinics, offices, health systems. We just started that earlier this year. And actually, that's our fastest growing piece of the business at the moment. And I think we've got some very exciting stuff in the background that can't talk about quite yet, but hopefully in the next three to six months, we should be able to make some more major announcements as well.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Actually, we've been told that hiding our prices is good for negotiations. Actually, it's just the opposite. We're getting taken advantage of. And it's that sort of mind frame and knowledge kind of spreads. Hopefully it'll bring more meaningful transparency to the status quo.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“So, yeah, they definitely feel like they have to respond to us. And yeah, hopefully it does drive more long-term, meaningful change. My view of it is that in classic economic theory, where you have an opaque market, the winners are not the buyers or the sellers. They're the people that broker information in between You see that happening in healthcare like crazy, where the opacity is a feature, it's not a bug because they're able to create enormous arbitrage opportunities based on the opacity in the system. So I think as actors on both sides of that, the pharma companies, the hospitals, the physicians, the providers realize, hey,”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“I think 3% is fair. Like, we've got still got a long way to go. But yeah, I remember Sam was just starting OpenAI around the time that I was in Y Combinator. And he had a thing that like it's hard for humans to conceptualize scaling laws. Like how quickly, if you grow exponentially, like how quickly that winds up adding up over time, like the human brain's just not programmed to be able to understand that. And yeah, that's very much happened with us. And I think we're still on that exponential trajectory, not just of metrics, you know, volume or whatnot, but also of the amount of substantive change we're making to the systems. CVS CareMark, one of the big 3PBMs, put out a cost plus program. And I was like, ah, subtle. They even use our company colors, which I was like, nice.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, I'll take that credit for that as my superpower of just being able to put up with it. A very different time horizon than technology moves.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“I'd say a lot more of it is about patients, medicine specifically and healthcare broadly is a lot of entrenched bureaucracy when you see companies like Amazon or Google attempting healthcare initiatives and they flame out and they go away after a little bit, you're kind of like, I know what happened here. They got caught in a million pages of red tape and just decided to move on to the next project. So a lot of it is just putting up with like we have to file Form 15B and subsection C in order to get approval from this city regulatory body before we go to the state regulatory body.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, he took extra effort to help me learn English and speak it without an accent. And yeah, eventually he was like, okay, well, now we've got to place you now that you speak English. You know, take this math test. Take this math test. Take this. Oh, you're not slow. You're a genius. I don't know. Yeah, it's amazing how much of your life trajectory is just what people tell you you're good at when you're eight years old Yeah.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“I'm from Denver, Colorado originally, but my parents are from the former Soviet Union, and I grew up speaking only Russian. So when I went to school, I was put in a second language English class. which was taught in Spanish. So I was a little bit slow on the pickup. I remember it was me, a kid who spoke Arabic, Gibron, and Christian who spoke tagalog, who was a Filipino, and we just kind of like shrug our shoulders at each other in the back of the class. Like, what's going on here? And eventually I had one of these life-changing teachers in the fourth grade. Was like, oh, maybe he's not slow. Maybe he's just Russian”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Oh, yeah, it's super useful. The first year curriculum was like contracts law and civil procedure, which actually for business is pretty helpful. What's a force majeure clause? All these sort of like legal terms of art that you don't get intimidated by anymore. I had previously run a startup and gotten kind of fleeced by lawyers. And I was like, I want to at least know enough to say when like, okay, it's cool. We don't need to get charged any more legal bills.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“As a founder, you want to make decisions, you want to stick to it. If there are bad consequences, so be it. The same thing applies to medical decision making. You know, there's a quote from Sir William Osler, one of the founders of modern medicine, that they taught me in my surgical internship orientation, which is the essence of medicine is the assumption of responsibility, which is, you know, you have to take ownership for the patient. Like you have to make the decisions and live with the consequences because most of the time not making a decision at all is worse. So, yeah, I find it just breeds discipline that I have to do that within the company as well.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Still do that for Maybe it's just sunk cost fallacy. Like it was a long time getting to be a doctor. Not giving that up. But Jan, I do find it rewarding. I find it grounds you because as an emergency radiologist, you're making snap life and death decisions on a rapid pace. And I find it breeds discipline and decision making.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Like insulin is a great example, actually, when they came up with the recombinant insulins, they were very expensive, but the price did drop pretty substantially. And Big Pharma was selling insulin for about $20 a vile. But there were people literally dying because they couldn't afford their insurance. And yeah, that was pretty much entirely the fault of the PBMs.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“A big pharma certainly know no angels. They're not innocents in all of this, but at least they make the drugs, you know. When I talk to like a big pharmaco, they're like, you know, we do all the R&D. We take all the flack from the public because they know what a pharmaceutical company does Their eyes have glazed over by the time you say pharmacy benefit manager. Like we take all the legal liability, we do all the manufacturing, which I can vouch for is hard. Why did these guys get 30% off the top? Like, that's nuts. There's actually no love lost between pharma and the pharmacy benefit managers.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and then you hire a consultant, and the consultant gets paid on the back end by the PBMs. Like, basically, there's this whole corrupted system to ensure that the big PBMs are kind of locked into place. And if you can break that up from the private sector, that, I think, is the more meaningful reform”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Which is if the big Fortune 500 companies, Fortune 50 companies move away from the big PBMs and go to the smaller competition, like we think the industry will suddenly have to reform of its own accord. So we have this weird coalition of people we help, which is the most indigent members of society, but also kind of the most powerful. Because who pays for most of the drugs at the end of the day, large employers. It's just this stuff is so complicated. It's so convoluted that why would Mark Zuckerberg have to know about his Employees' pharmacy benefits. He has other stuff to worry about”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“I don't think that policy change regulation legislation is really going to help as soon as they implement a policy that's designed to eliminate some bad practice. The PBMs have already moved on. Generally, everything that's on discussion now for PBM reform on Capitol Hill is addressing the big scams that were in place five to seven years ago. So really what we think is the solutions is private sector reform.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, the pharmaceutical companies actually make more money selling through us than they usually do. So one of the questions we get a lot is, well, won't this take away from research and development, actually, if you drive down the drug costs? No, ironically, in this new model of transparency without all these mysterious actors obfuscating the true price of the drugs, the pharma companies wind up making more.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Kind of a paper tiger, like they need you more than you need them. And the irony is like we're a small company. We don't have the negotiating leverage. We actually pay more for the drugs. The pharmaceutical company.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Do they try to get locked up? Oh no, I've been told over and over again. You know, one of our initial big challenges was just getting the pharmaceutical companies to work with us because the big cartel basically says, like, don't do business with Cost Plus drugs or we won't buy your product anymore. They're not supposed to. It's grossly anti-competitive, but everyone tells us they do. So the first drug we had was actually in 2021 product called albendazole, which was an anti-parasitic agent sold for like $250 a tablet. We were able to get it for like $5 a tablet, but the company didn't want to be associated with us. They said, we'll sell it to you, but you have to put your own private label on it. That went really well and that it encouraged three other companies to give us 100 products that we could sell under their own name. They were willing to take the risk. And yeah, that's when the company properly launched in 2022. What we had to sell to the pharmaceutical companies for the longest time is, you know, the cartel.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Zero dollars, zero dollar marketing spend. You know, of course, we have Mark and his platform, but honestly, what drives our growth is just word of mouth. So we tell all the vendors that come onto our platform, all the pharmaceutical manufacturers, the exact same thing will happen. We'll sell zero of your medication for like a month or so. And then we'll sell out of all of it in a day. Then it'll scale from there. And what we find triggers those events is social media. Like someone in their Facebook group for chronic myelogenous leukemia will realize, hey, I can get $30 immatine instead of $2,000 imatenib through CosplusDrugs.com. They'll post. And then suddenly it'll spread like wildfire through that specific community. So we see that pattern happening again and again and again. So it really is all just driven by word of mouth.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Exactly. We were struggling, I want to say late 2022, because we were experiencing 20-30% month over month growth for a prolonged period of time, which is, you know, they tell you scaling is hard. Yeah, it's a cliche for a reason. Like, it really is challenging. And, you know, there was a period where it was like a week or two delay with prescriptions going out and we were just scrambling to keep pace, which now we're in a much, much better place. And the prescriptions go out in a day and a half on average. The robotics, the automation really helps just operationally keep pace with what has to happen.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“That's a component of it. A large part of it is just being able to get the product out the door fast enough because the robots are just faster from an operations perspective. So we do use vendors. We don't own the distribution robots ourselves. We use subcontractors, but they also have robotic pharmacy systems that they use.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and it's a lot of fun. So when I was growing up, I was actually being fast tracked towards being a high energy particle physicist. Yeah, so I started college when I was 13 and was meant to be a string theorist, essentially. Took a hard left turn at the last minute. I remember looking at with all the wisdom of like a 17-year-old, you know, like the journal Nature had a cover story about, I think it was a string theory M theory-like concept that the universe is a 26 dimensional soccer ball. And I was like, okay, this is going nowhere. I want to do something that's a little bit more substantive. I did wind up doing an MD PhD, a PhDs in applied mathematics. And yeah, actually now I've gone far down the like, like everybody else has down the AI rabbit hole.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“In a hermetically sealed chamber. So these are robot arms when you see the videos of car factories, kind of like those. But they have to operate under conditions of perfect sterility. So they're actually in a sealed chamber that gets periodically sterilized by vaporized hydrogen peroxide. So it's very neat stuff that they make these robots that can operate under these conditions that can mass produce medications at scale”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“We worry Exactly. So we use robotic technology that uses what are called single use disposable flow paths, which enable us to pivot from making one product to another very rapidly in principle within four hours. And we actually just got a grant from DARPA to take that technology, augment it with AI, miniaturize it, and kind of put it in a pod so we can actually rapidly scale our manufacturing abilities around the world and can put one of these automatic sort of manufacturing pods anywhere that there's a drug shortage. And that's sort of our initiative for the next 12 to 18 months.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“We actually have four different business lines, sort of the grand scheme is that I like to say we use vertical integration for good instead of evil, because anywhere we need to fit into supply chain to fix the problems, we can sort of fit in there. So we have our manufacturing operation, and there we're very focused on drug shortage products, so products that you can't get anywhere else. So I just came from the International Society of Pediatric Oncology Conference, and they estimate there's 120,000 children who die a year from not being able to get their chemotherapy around the world. And the thing is, the market is so distorted, the price of this drug is generally pretty cheap. It's needed in, relatively speaking, small quantities, so nobody wants to make the drug. So I like to say that our manufacturing makes the drugs that nobody else wants to make.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, let's just do it on the side. You know, it's all be a public service because there's these patients that are fairly small communities that need these ultra expensive medicines that we can reduce the cost 99%. Why not? And we figured it'd be fairly limited. We launched it in January of 2022, and it just exploded faster than I think any of us could have predicted. To your point on the statins, actually one of our top-selling drugs at first was generic Rusavostatin. And that kind of blew our mind. It's a very cheap drug. Like, why are we selling so much of this? And it turned out, yeah, one of the big PPMs was adjudicating it at $200 for a month supply, a drug that costs literally a penny a tablet. And now we have millions of people who are customers of our direct-to-consumer site and still growing as fast as we can keep pace.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, actually the manufacturing was a piece of it from day one because we always assume to get the drugs at a low cost, the system's so entrenched we're going to have to make them ourselves. And actually, the direct-to-consumer mail order piece was kind of an afterthought, believe it or not, because we were like, hey, this is a thing that's relatively easy to do compared to setting up our own manufacturing.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“I'm not a billionaire. I can't get away with it. But we get letters, emails every day from people who are like, hey, I was having to skip meals to afford my medicine. I thought I was going to die because I just couldn't get my chemo. I thought I would have to sell my house real people who they were being asked to pay $3,000 out of pocket for their chemotherapy, for their multiple sclerosis medication. And suddenly we can offer it for $20.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“No, he's taking customer service calls seriously, like, he is a manic workaholic. Like anytime I email him about any issue day or night, six in the morning, 2 a.m. within five to ten minutes, there's a response. And yeah, he is deeply into weeds on everything from like website design, coding to our manufacturing plant and operations. He's communicating like every hour about pretty much everything that happens. He wants to, you know, what he says is F up the industry.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“It worked out in my case. I was able to raise a small seed round a little over a million dollars, which not a lot of pharma dollars, but enough to get kicked up and off the ground. And just totally on a whim a couple months after that, I saw Mark Cuban had a public Gmail and I was like, can't hurt. And I shot him a line. And surprise, surprise, Mark is manic. He's incredible on email.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“So originally started to company actually as 501c3 nonprofit. I went out sort of trying to raise funds for it for the better part of three, four years and failed spectacularly, did not raise a dime beyond what I put in myself. Eventually, I applied to Y Combinator for financing the interview committee. Actually, Sam Altman was on mine at the time. Sam said, we like what you're doing. We'd like to get behind it. Do not think you'll be able to raise enough as a nonprofit. If you reincorporate as a public benefit corporation, so for-profit company, but with a registered public mission with the state, we'll invest in you like we would in any other company. And after three, four years of no success, I was like, okay, whatever. Let's give it a shot. Yeah, I'm a little bit embarrassed now to say it took corporate governance advice from Sam Ottman, but...”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, and it turns out he's a very, very small fish in a much larger pond of people taking advantage of people. But yeah, that was the sort of triggering event.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, for unrelated securities fraud. But, you know, in retrospect, maybe you did more to lower drug costs than anybody else by starting marking me on this track.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Think every single physician has had patients injured by not being able to afford their medications, family members. I'm a radiologist by training, but I was working with a pulmonologist on a research project at one point. And one day he came in and sensed because two of his patients had died over the same weekend. They both needed a drug called bozentin, which was then generic long off patent, but still cost $10,000 for a month supply. And you'd think that'd be enough to get me sort of started on this, but kind of distraught it broke the camel's back. Do you remember this character Martin Schrelly, the pharma bro? Yes. Yes, yes.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Actually, the list price of this drug is $10,000 for a month's supply. So actually, we're getting you an amazing deal at three thousand dollars. That's a 70% discount. How amazing are we? Meanwhile, if you go to the drug manufacturer and just say, can we buy this from you? Yeah, the troop price is closer to $20 to $30 for that same month's supply. And yeah, very proud that actually exposing that practice, the Senate actually questioned the CEOs of the big PBMs on it. And now there's an office of the inspector general investigation about that particularly egregious like 100,000 X price increase practice.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Of the big things that's unknown about our pharmaceutical distribution chain is there's effectively a cartel of three companies, these so-called pharmacy benefit managers, that the way they do this is very, very complicated. But the bottom line is they buy all the drugs. They mark them up as much as they want, and then they resell them. They accomplish that through effectively being a form of payment processor for insurance companies. But yeah, if you just go around the system, sometimes the price reductions can be radical. You know, it's estimated at least 30 to 40 percent of all drug spending goes to the pockets of the pharmacy benefit managers. There are drugs we sell on our site for $20,000, $30 for a month supply that if you tried to get it through your insurance and you had a high deductible plan, you would be asked to pay three to four thousand dollars out of pocket. Yeah, it's insane. It's criminal. Yeah. And that's not hyperbole. They will say.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“Plus part, so we do our true cost, and that's the big innovation if you want to call it that about our company. We reveal what we purchase all the drugs for. We had a 15, 1.5% margin for ourselves, $5 fee to pay our pharmacist, $5 shipping and handling. And then that's the total cost of the drug.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT
“One of our initial big challenges was just getting the pharmaceutical companies to work with us because the big cartel basically says don't do business with Cost Plus drugs or we won't buy your product anymore. They're not supposed to. It's grossly anti-competitive, but everyone tells us they do. I saw Mark Cuban had a public Gmail and I was like, can't hurt. I shot him a line and surprise, surprise, Mark is manic. He's incredible on email. But yeah, he got back in like five minutes and we had a brief dialogue and he invested a small amount of money to start with. Now he's a true operational co-founder. He wants to, you know, what he says is F up the industry.”
2024-12-03 · Masters of Scale · Rapid Response: How Cost Plus Drugs is revolutionizing pharma, with CEO Alex Oshmyansky · IDENTIFIED FROM THE TRANSCRIPT