> a non-charitable approach would be to undercut by only 30-50% instead of 90%
Not if you're fighting deeply entrenched incumbents. Switching costs are huge, financially and politically. You need patients to hammer their providers to give them access to these drugs through this channel.
50% off is big, but it's something incumbents could match. 90% off leaves you with a profit margin, gets you PR points and holds the hounds at bay. Bonus: if you work out your competitors' debt loads and price at a level that they couldn't, financially, sustain.
If the incumbent is a large scale pharmaceutical company with thousands of drugs in its portfolio, then it can most definitely afford to lose money under-cutting you when you only make a small handful.
And I think that really just underscores why this approach is the Google Fiber of the US pharma market— it may be able to force prices down for a handful of select customers, and may be helpful for proving a point about true costs and the need for regulation, but its existence is most certainly not some kind of proof of the invisible hand stepping in to solve this problem on its own and that regulation is therefore unnecessary.
Of course not— it argues for not bothering to enter this space at all unless you're doing so with ulterior motives, for example as a PR stunt.
As for antitrust laws, isn't the whole point that we're in this mess because the incumbents are all conspiring to fix prices and the existing consumer protection systems which should be preventing that have been failing Americans for decades and thank goodness for the free market which created the necessary incentives for Mark Cuban to swoop in and start this business?
> incumbents are all conspiring to fix prices and the existing consumer protection systems which should be preventing that have been failing Americans for decades
The Sherman Act prohibits monopolies or cartels damaging competitors. As a competitor, you have standing. As a consumer, you do not.
I think this business could be phenomenally cash-flow positive in short order. It's not dissimilar from the way Teva started, just further down the pipeline.
Not if you're fighting deeply entrenched incumbents. Switching costs are huge, financially and politically. You need patients to hammer their providers to give them access to these drugs through this channel.
50% off is big, but it's something incumbents could match. 90% off leaves you with a profit margin, gets you PR points and holds the hounds at bay. Bonus: if you work out your competitors' debt loads and price at a level that they couldn't, financially, sustain.