Mark Cuban Cost Plus Drug Company | Alex Oshmyansky, CEO/Founder

Transcript Disclaimer: This transcript is generated using speech-to-text technology and may contain errors or inaccuracies.

Mike Koelzer, Host: [00:00:00] Alex for those that haven't come across you. Tell our listeners who you are and what we're talking about today. My name 

Alex Oshmyansky, MD, PhD: is Alex Oshmyansky. I'm the chief executive officer and founder of the Mark Cuban Cost Plus Drug Company. I am a physician by training, uh, diagnostic radiologist, uh, still practice every Saturday night.

I still do diagnostic radiology. The Mark Cuban Costco stroke company is dedicated to producing low cost versions of ultra high cost, generic drugs. And we launched about a month ago with our, our first product and yeah. Would love to 

Mike Koelzer, Host: chat about it. Why radiology, what interested you in that years ago?

So I actually also have a 

Alex Oshmyansky, MD, PhD: PhD in, uh, in mathematics and a lot of green. No, no. I went. Law school for a year. Just out of curiosity, 

Mike Koelzer, Host: you went there, then you got smart and said, no, thank you. 

Alex Oshmyansky, MD, PhD: I loved it. Those stills were fun. Surprisingly fun. You'd be viewed. Uh, you wouldn't think of it, but, uh, but yeah, no, uh, yeah, no, I honestly, I had started a company before and had so much in legal fees.

I was just like, Uh, this is me just being grumpy, like George Costanza asked I'm like, you know what, I'm just going to learn it myself.

Mike Koelzer, Host: So then you ended up in a PhD in mathematics and then a MD and studying radiology. Yeah, 

Alex Oshmyansky, MD, PhD: that's right. So I did, uh, I, uh, started a MD-PhD program. Yeah. So it was a joint program from the start. Gotcha. Yeah, and just happened to do a PhD part of an identity field called mathematical biology, where you use mathematics to, to describe biological systems.

Um, so, you know, I had always had an interest in, in very quantitative things, um, a nice way to combine medicine and physics mathematics in a way that helps people very directly. So 

Mike Koelzer, Host: say you're doing that every Saturday night. In the way of that during your weekdays, when did you stop doing your regular practice of medicine and what got in the way of that?

So when I 

Alex Oshmyansky, MD, PhD: was still going through my radiology training, um, you know, I had been, uh, working with a group of patients with a condition called primary pulmonary artery hypertension. Um, and you know, these patients, um, needed. Uh, I was working with a pulmonologist on a research study and he had patients who needed a medication called Bocentin, which I'm sure many of your listeners are probably familiar with.

Mike Koelzer, Host: I'm not, but I'm sure they are. My listeners know I'm not too smart on that drug stuff. Uh, basically it, 

Alex Oshmyansky, MD, PhD: it treats a condition called primary pulmonary artery hypertension. So hypertension specifically of the big blood vessel that comes out of the heart and goes to the lungs. And, uh, yeah, essentially, you know, it's an off-patent medication that went off patent, you know, 20, 30 years ago, something like that.

Um, but it's still tremendously expensive. Uh, at the time it was, uh, I think like 20, $30,000 list price for a month's supply. And, you know, patients were meant to apply to patient assistant programs to these nonprofits that covered their copays for these drugs when they couldn't otherwise afford it. Um, but you know, several patients who needed it urgently kind of fell through the cracks.

Nobody knew there was a problem and they died. So, you know, that, you know, obviously a horrible, horrible situation and kind of stuck with me that I was just angry that this situation would exist. And, uh, You know, if I'm being perfectly honest, you know, Martin Shkreli happened. Uh, do you remember him the so 

Mike Koelzer, Host: far?

Yeah, I know, 

Alex Oshmyansky, MD, PhD: just kind of the straw that broke the camel's back. And I was like, you know what, someone's going to make a pharmaceutical company to just make reasonably priced versions of these medications. Um, then you founded, uh, the company then that was about five years ago or so. And 

Mike Koelzer, Host: you already graduated from med school then 

Alex Oshmyansky, MD, PhD: or not?

Oh yeah. So I graduated med school a while ago. I'm old. Uh, 

Mike Koelzer, Host: You'd been practicing medicine daily. When you decided that this was a problem in your memory that had been coming back of why this was so expensive and then Martin helped push it along a little bit. 

Alex Oshmyansky, MD, PhD: Yeah, exactly. Exactly now. So, you know, I graduated med school back in 2009 and finished my residency and fellowship training.

So, uh, you know, the other training. To come complete before you're allowed to practice independently as a doctor, uh, around 2015 and basically started this company, uh, actually as a nonprofit, uh, almost immediately after I completed my medical training and sort of worked, uh, began practicing full-time. As a diagnostic radiologist at that point while trying to raise the financing necessary to get the company off the ground.

Um, you know, unfortunately a [00:05:00] pharmaceutical company is a rather capital intensive business. Um, my plan had been to sort of, uh, work overtime as a radiologist and put money away in the background, like save it up and then all donated as a, as a bolus. But you know, it was going to take a long, long time to do that.

Was 

Mike Koelzer, Host: your goal actually with this company, was it to try to find ways to work with the industry? Or did you actually start from the beginning saying I want to make medicine that is cheaper. 

Alex Oshmyansky, MD, PhD: Yeah. So the initial intent was, was that was just like, I'm going to make medicine, you know, it's kind of wound in other directions.

Better strategies sort of unfolded, you know, uh, you know, at the time I think it's fair to say I was relatively naive at the journey, but yeah, initially, um, you know, the idea was just, yeah, just do it from scratch. You know, uh, get our own a and DA's are on. And those abbreviated new drug approvals, perhaps contract, manufacture out the manufacturing of the actual drugs themselves.

Yeah. So that was the initial intent. Um, but you know, it ended up being the case that with several of these drugs, you know, the manufacturers actually are not the issue. You know, it's the actual intermediaries and supply chain between the pharmacist and the patient and the pharmaceutical manufacturer.

Expert, you know, dramatically increasing the cost of these drugs and you know, our first product actually we're doing. Alvin does all. We did not manufacture ourselves. It's actually a private label product. So there's actually another manufacturer, but we just put our own label on it. We put our own NDC code on it, which lets us set the WAC price.

Well, so acquisition costs as well as the AWP price. And we can publish that publicly, you know, whichever way we like. Um, but you know, the actual manufacturing, the actual a and D has helped by another company 

Mike Koelzer, Host: for our listeners. That drug is one that would be a great first one to start because it's treating a problem for those typically financially disadvantaged.

Very 

Alex Oshmyansky, MD, PhD: strangely in the 21st century and 19th century condition has, has re-emerged, you know, in America, primarily the, the American south where it's a bit warmer, you know, which is, which is hookworm, uh, which is a parasitic infection you get basically from, from stepping on sewage, uh, froze this way through your feet.

Mike Koelzer, Host: And open-source or just through your skin, not just through your skin, 

Alex Oshmyansky, MD, PhD: straight through. Yeah. You know, if you know, it's not like an emergent, generally not emergently life-threatening condition, but if it sort of is left to fester for, uh, for years, it can cause, you know, growth defects and our logic problems and.

You know, a number of, uh, very difficult problems. Um, and it can actually be treated with only two tablets of Alvin. You know, it doesn't generally doesn't really require more than that. Um, but, uh, when the list price of Albendazole is $250 a tablet or $500, suddenly it becomes cost-prohibitive for, particularly for the indigent population, which is disproportionately affected by this.

You know, they're not able to afford $500 treatment and health systems aren't able to, to afford mass treatment protocols for that price. Wow. Price up. This is a very old medicine. It's on the whole list of essential medicines and in most of the world, you can get it for 50, 50 cents a tablet. But, uh, but yeah, due to a variety of market conditions, uh, you know, you're just able to keep that price super high in the United States and people have kept it that way.

Um, so yeah, so what we essentially did is we talked directly to one of the manufacturers of Alvin diesel, um, and you know, we I'm under a nondisclosure agreement, so, you know, So exactly what we got it for, but, uh, you know, let's just say it cost us on average, about $13 a tablet all the way from purchasing it packaging and labeling it, serializing it and distributing it.

You know, per tablet too, to get us out there. Uh, we put a flat 15, one, 5% margin, which gives us our $15 price point to pharmacies. And you know, what I've been told by the pharmacist that I've spoken to so far is that if you try to get the same product from McKesson, uh, you know, it costs closer to $125 a tablet.

Um, so you know, that. Presumably McKesson has significantly more purchasing power than I do. So that Delta is, you know, they're probably buying it for even less. And that Delta is just being captured by McKesson or any of the other big wholesalers. And then you have the pharmaceutical benefit manager at the end of the day, getting their cut of the rebate.

So I wind up with the [00:10:00] intermediary getting, you know, almost 10 X the purchase price, just in fees along the way before the drug is even, uh, has even sold to, to. Patient or the insurance payment. So essentially what we do is we try to disintermediate this chain through price transparency, and just say, Hey, this is actually what it costs us to acquire, distribute this drug.

You know, anything about that, you know, use your, use your kind of common sense, uh, in terms of, you know, whether that's a fair price or not. 

Mike Koelzer, Host: I love your LinkedIn. It says making affordable medicine. That's perfect. I wish we all could know. So succinctly what our mission is. So obviously you want the people to see that cheaper, but who do you, when you say, like, people can then see what's happening, who are those people that you would like to see when you say, yeah, we'd like to show all this kind of fluff in the prices.

Is there anybody that you kind of want? 

Alex Oshmyansky, MD, PhD: Obviously one, the patients themselves. So, you know, specifically for our vendors, all we'll be distributing for free, uh, you know, a large portion of that initial order to start the mass treatment protocols with, with our, you know, uh, colleagues. At the Baylor school of medicine, they'll do mass treatment throughout the south to eradicate hookworm.

Should've been gone a long time ago. Came back. Now we can wipe it out again because we can get the drug at a reasonable price. 

Mike Koelzer, Host: Imagine that before certainly imagining it now, by seeing what's happening with the COVID vaccines, for 

Alex Oshmyansky, MD, PhD: example. Um, but you know, moreover, you know, certainly we'd hope that, you know, we can educate, uh, policymakers, you know, people in positions of authority.

Trying to determine what the best policy is to really reduce costs for Americans about, you know, where the actual problematic aspects of the pharmaceutical supply chain are. Uh, I'm sure many of your listeners have been squeezed tremendously by DIR fees, others Nanigans. And these, these are such, you know, forgive me, uh, you know, relatively obscure issues to the layman, you know, uh, I mean, part of our marketing is, you know, We are a pharmaceutical manufacturer than we are.

We are sending up our own sterile fill, finish facility in Texas, uh, which we're hoping to have online and sort of a commissioned and validated in 2022, uh, that will be focused on rare disease, shortage, drugs, drugs, where it is actually challenging you to do, you know, actually obtain the drug at all. 

Mike Koelzer, Host: I see.

So those aren't the ones that are easily available. It's just not the Delta. It's actually maybe hard to get a hold of them. And more than just L Ben does, all would have been. 

Alex Oshmyansky, MD, PhD: Exactly. So there are specific drugs that are actually challenging to acquire disproportionally. Those tend to be sterile injected as a finished facility, but moreover, you know, we describe ourselves even in sort of the private label, part of our business as being a pharmaceutical manufacturer.

No patients don't understand what a pharmaceutical benefit manager is, you know, it's startling. Um, you know, even before they merged with other healthcare conglomerates, the PBMs. Fortunately 20 fortune 25 companies and largest companies, some of the largest companies in America by revenue. Uh, and yet at the same time, the pharmaceutical benefit managers, it's not just that people haven't heard of these specific companies.

They've never heard of the industry as a whole. So there's a big sort of educational challenge to the lay public. 

Mike Koelzer, Host: Let me see if I've got this. Did you say that you call it just a manufacturer? Because people don't understand pharmacy benefit managers and things. 

Alex Oshmyansky, MD, PhD: Yeah. So we are setting up a sterile fill finish facility, uh, in Dallas, Texas, uh, and that facility is going to be focused on, on shortage drugs on, uh, on rare disease, orphan drugs, where, you know, it can be difficult, uh, or cost-prohibitive to, to get ahold of the drugs.

You know, period, so we will be fracture, 

Mike Koelzer, Host: But would you call yourself anything but a manufacturer? Are you also a PBM in a sense and stuff like that? Or did I hear that wrong 

Alex Oshmyansky, MD, PhD: more broadly? We're also exploring, you know, other supply chain mechanisms to get our products out there. So I would kind of like a wholesaler.

Yeah know, in a, in a sense, uh, you know, essentially where, you know, have sort of two parts of the business in my mind, one, the actual form manufacturing and to sort of a supply chain innovation business, where we're looking to find ways to get products to patients, uh, at transparent. And sort of get past the sort of gatekeepers between, uh, patients, pharmacists and the actual drugs themselves.

Mike Koelzer, Host: And so when you're talking to people, the easiest way, and part of this whole company is on communication. Also the easiest way to say is we're a manufacturer of medicines. And if you're [00:15:00] interested enough to talk more about it, we can go into a little bit more about what that means, but let's just say we're a manufacturer right now.

Exactly, 

Alex Oshmyansky, MD, PhD: exactly. People cause people to understand. Pharmaceutical manufacturer is, you know, what is the role of a wholesaler? People know what a wholesaler is, but they don't understand why it might be problematic in the pharmaceutical industry. You know, or, you know, you know, cop, you know, Cardinal McKesson AmerisourceBergen with their role, it was the role of the big PBMs are, um, you know, they just, this is not something that's in the lay person's day-to-day life.

So, so yeah, for messaging that helps. But I think, you know, part of the next step of the company is sort of educating, you know, Not just patients, not just policymakers, but also, you know, the lay public as to where the actual problematic aspects of the pharmaceutical supply chain are in terms of where the value is not actually being added, but it's being extracted.

Uh, and revealing that just by, you know, just showing, showing our work, you know, uh, showing where the costs come in, what it costs us to do each individual step of the distribution process and just laying it all out on the line and saying, this is what it costs, and this is what it should cost. Uh, to, to acquire the drugs at the, at the end of the 

Mike Koelzer, Host: day.

Yeah. I like the way you describe that. I've heard it put that way before, maybe someone would argue with it, but yeah, it's not that we're not getting a lot of value from someone, it's actually that they're not adding any value if they're extracting it. I would certainly throw PBMs in the mixer and somebody might not, if they're.

Let's put opaque, PBMs. Cause there are some good ones out there and I've talked to some good ones, but they're just stripping that out of there. So Alex, where did you pick up your knowledge then? And maybe you can't even pinpoint it because you've been doing it for, you know, six or seven years, whatever.

Where did you pick up your knowledge of and all that stuff? Did that just soak in over time or did you have a source for that? 

Alex Oshmyansky, MD, PhD: No, no, that's a good question. Uh, I think it's probably more the former and just sort of, you know, rolling it in over time, you know, doing your research, you know, it's tricky because none of this, there's no centralized source of this information.

You can go through this. Textbook of why drugs are so expensive. 

Mike Koelzer, Host: If there wasn't, would it be bombed by somebody, you know, 

Alex Oshmyansky, MD, PhD: not be around long, 

Mike Koelzer, Host: you wouldn't want to have your residency or something. 

Alex Oshmyansky, MD, PhD: Exactly, exactly. So, you know, it's more just like conversations like these, uh, you know, with countless dozens, hundreds of individuals over the course of the better part of the last decade in terms of trying to figure out, you know, how.

You know, what are the problems and how do we get past them? And, you know, it's obviously extremely challenging. Lots of people have, uh, have taken this on. Uh, but you know, you gotta take up the good fight. You know, you got to give, give it her own shot. 

Mike Koelzer, Host: Most people might look just to money to say, well, that's where your speed bump is and get this going, but maybe more intricate or maybe dividing that down.

Where were the biggest roadblocks in you moving forward? I'm assuming there's always roadblocks, you know, in a good story. Yeah, no, I think 

Alex Oshmyansky, MD, PhD: that's, that's largely, it is, uh, you know, capital is, is a huge part of the capital trying to, to get the, the capital necessary to get things off the ground. Um, and yeah, in the first like three years or so of the company, as a nonprofit did not have any luck raising any.

Uh, $0 raised outside of what I invested myself. Um, but uh, eventually ran into a group of venture capitalists and Silicon valley that periodically invested in, in nonprofits, uh, an organization called Y Combinator, which is a quote unquote startup accelerator. Uh, and I went to Silicon valley to interview with that.

Mike Koelzer, Host: How do they accelerate just financially or do they throw some other stuff behind 

Alex Oshmyansky, MD, PhD: it? So Y Combinator has been the initial investor in a wide variety of companies. You've probably heard of, uh, what, what have they done? Uh, Dropbox, Airbnb, uh, they're they're they're well known, sort of gotcha. I have a residential program, they invest a small amount of capital.

They sort of mentor you. And then at the end they introduce you to a whole bunch of investors and they were great. Uh, and yeah, basically their feedback was, uh, you know, when I talked to them about the nonprofit was we, we liked what you're doing, but you will not be able to raise enough money to get this off the ground as a nonprofits.

Uh, if you reincorporate as a, for profit, uh, public benefit corporation, Uh, or a for-profit company that still has a public social mission. Uh, we'll invest in you like we would in any other company, 

Mike Koelzer, Host: It sounds like the second one to me was not anything official. It was just like a corporation that says we're going to do good.

But was the first one you mentioned, is that actually a designation? Sure. 

Alex Oshmyansky, MD, PhD: So it's a relatively new thing. [00:20:00] Um, then, you know, it still remains to be seen how. How much of an impact it has because it's relatively new, but the way we're actually incorporated we're incorporated in the state of Illinois. Uh, we are, you know, and after our name, we, instead of the initials, Inc, Inc, we actually have PBC public benefit corporation.

Mike Koelzer, Host: I've never heard of that before. That's cool. Uh, so the idea 

Alex Oshmyansky, MD, PhD: of it is, you know, in principle as a, you know, just an average. Like your actual it's actually in law that your obligation is to maximize profit for shareholders and you can be penalized for not doing that. Uh, a public benefit corporation has its charter.

Uh, you actually, when you file your registration with the state, you have a social mission. You actually put it on file with the states. Uh, and then after the fact, um, You know, uh, basically you're judged not only on how profitable you are for your shareholders, but on how well you accomplished your, your social mission.

Um, and that was my understanding. That's never actually been litigated, like no one's actually ever been sued for not being profitable. Um, but in principle, you are formerly judged as a company based on how well you accomplish your social mission 

Mike Koelzer, Host: in the PBC, in the PVC, correct. A regular corporation. They might have.

Outreaches and stuff, but it probably always has to be explained in a way that says, well, yeah, we're doing this outreach, but ultimately it's going to help us increase our profits, you know, it's Goodwill or it's marketing or something, but they have to keep that stock going. 

Alex Oshmyansky, MD, PhD: Yeah. And forgive me if I, if I'm messing up some nuance of like the corporate government and some legalities.

But my, my understanding of it is that, uh, you know, you have this concept of fiduciary duty to your shareholders and your, you know, your actual obligation as a corporate entity is to maximize profits. And that's actually a legal standard that 

Mike Koelzer, Host: you can be held to. And that's what a farmer bro. That's what he would say he was doing just increased.

Profits. I don't know. So maybe something's broken, arguably everybody would say that he's broken, but maybe the system is broken somehow 

Alex Oshmyansky, MD, PhD: going to have a pretty compelling argument there that the externalities of having that kind of system in place greatly outweigh the benefits of the individual profit motive at some level, like if, if people are dying, uh, because they can't get access to their medicine and people are not.

You know, in principle compelled, uh, to maximize shareholder profits, like isn't that a pathologic system that requires some kind of intervention? Uh, yeah, 

Mike Koelzer, Host: My son and I always talk a lot where we always say that if you're going to make a rule, the rule. Can't really depend on just the goodness of people you want.

An example was we bought stuff and we wanted to return it to this company. It was like a toilet seat or something like that. And the company we bought it from didn't want to return it. And we were like, yeah, but your rule says, you'll take anything back. And the point I'm trying to make here, and a real simple point is it's hard to set a rule up like that, to talk about shareholders and then have somebody extend the rule to.

Um, and then say you're doing it wrong. It's like, well, maybe the rules have to be changed because he was playing in the rules. I don't know. 

Alex Oshmyansky, MD, PhD: Forgive me. I'm going to wax philosophically for, for a bit. Please do, but you know, yeah. My PhD is in math and in particular I study some systems called cellular.

Uh, the most famous of which is Conway's game of life. Uh, and essentially, uh, the way it works is you have rules on a grid, uh, and depending on what your rules are, you get these really elaborate patterns and slight tweaks to the initial rules of the game. Uh, like have amazing consequences in terms of like the patterns that form.

Uh, unfortunately I can't really do them justice, uh, you know, in an audio format. But, uh, but if anyone Goggles to game of life and cellular automata, you'll see these, these patterns, that form. Um, and you know, my, my view of sort of the market is, is similar. Um, you know, uh, this, this, you know, a centralized, you know, communist market never functions because it doesn't function because there's just not enough processing power to really, um, you know, Adapt to how much ice cream does.

One group of people want, like it's much more efficient to have multiple parallel processors, essentially attacking this problem in the form of, you know, hundreds, thousands, hundreds of thousands, millions of other companies, all working to solve these problems simultaneously. Uh, but at the same time, somebody has to set the rules of the game, uh, set the rules of the game of life, if you will.

Uh, and the patterns that come out, um, get, you know, Will drastically very basic. What the rules are set at. And in this case, the government and other stakeholders are the ones [00:25:00] that set the rules. So if you, if you set the rules that, you know, profit at all costs, well, you're, you're going to get a certain set of outcomes.

If you do that, you 

Mike Koelzer, Host: really can't set a rule and then depend on the Goodwill of people. If you have to do that, we'll put it in the rules somehow. If, as long as you're making rules, just try to make a better rule, I guess. 

Alex Oshmyansky, MD, PhD: Yeah. And of course it's challenging because you know, you have unintended consequences from every rule you make.

Uh, yeah. But at the same time, yeah, certainly this, uh, you know, I think we've discovered in 21st American, uh, economic history that sort of this sociopathic, uh, view of. Uh, private enterprise where, you know, everyone's in it for themselves and there's no other consideration has too many negative outcomes to really be sustainable in the long-term.

Maybe we have to revert to something closer to, you know, the theater of Roosevelt type model of, you know, some form of constraint or capitalism or capitalism would lose on it. Prevent these excesses that really hurt people from formerly taking shape. 

Mike Koelzer, Host: I dunno, it's hard to put a rule on everything you want to rule on everything, but there's always going to be someone that's trying, I suppose.

Yeah. No. 

Alex Oshmyansky, MD, PhD: And it's, you know, the devil's in the details 

Mike Koelzer, Host: of course, but yeah, that's what it is. Alex, you graduated your first college degree when you were 18. That's right. How, why is that? Because you were just moving faster in the classes and so on. And it was, this was a challenge to keep moving up then. 

Alex Oshmyansky, MD, PhD: I don't know.

I guess I, you know, uh, it's hard to say I was like 13 when I started, so, you know, but, uh, but no, I was just good at math, so they just let me keep doing stuff. 

Mike Koelzer, Host: Were you homeschooled in high school or did you go through a regular high school? 

Alex Oshmyansky, MD, PhD: Kind of college and high school and parallel. Gotcha. Yeah.

So actually I was very fortunate that the school district I was at, if they didn't have a class available, that was like a natural extension of what we taking calculus three after calculus or whatever, like you've been taken out to like the local community college or a local branch of the university of 

Mike Koelzer, Host: Were you in regular grades up until eighth grade?

And then you went to college and high school to get it. So, yeah, 

Alex Oshmyansky, MD, PhD: no, I'd be reading my differential equations, textbooks stuff, and you know, and in the library between normal 

Mike Koelzer, Host: classes, we haven't talked to medicine much, and I know you have a heart for that, but did you ever have thoughts of going more solidly math?

Alex Oshmyansky, MD, PhD: Yeah, no. I was basically being, uh, you know, my trajectory was to, to being kind of like a string theorist, uh, when I was a kid. You know, theoretical physics, high energy particle physics, um, and, uh, know essentially one day I just remember reading, uh, a story on the cover of, I think it was nature. It was either the nature of science, or one of the two big, you know, scientific journals.

And it was on this big, this discovery that may have held. I forget now it's, you know, 20 years ago. Uh, but like, you know, that the universe is actually a 20 dimensional soccer ball. It's geometry. And I was like, You know, I want to have more, you know, with all the wisdom of a 17 year old, you know, I was like, you know what?

I want to have an actual impact on people's lives. You know, I have an interest. I was like, how do I do that? And be a scientist. I'm going to go into medicine. 

Mike Koelzer, Host: Probably a lot of pharmacists are in your category, you know, or they've got the mass smarts in that, but they don't maybe want to focus just on the math things and.

Alex Oshmyansky, MD, PhD: Yeah, exactly. Uh, you know, at some point, uh, you know, you want to use your scientific proclivities to have a direct impact and directly help people. And, you know, certainly the allied health professions, more broadly medicine, uh, pharmacy, uh, dentistry, physician assistants, all of the above are excellent ways to go about doing that.

Uh, and yeah, and I've always been privileged to be able to, to act as a, as a medical provider in any. 

Mike Koelzer, Host: Do you still keep your feet wet in math? You still like read math stuff for kicks or 

Alex Oshmyansky, MD, PhD: not really, if I'm being honest, you know, there's just too much to do. I do a little bit. I, I constructed an artificial intelligence that, uh, you know, uh, Basically survey the string theory landscape, no practical application to this whatsoever, but you know, there's this concept of, uh, basically in string theory, you can have like some absurd number of different potential string theories, more than, you know, particles in the universe, essentially.

Uh, but most of those don't move. Don't actually result in a string theory that has a viable universe. Uh, and that's called swamp land. So the landscape is the landscape of viable universes and string theory. And the swamp land is a non-viable university. So artificial intelligence is cruising along the universal string theories and trying to categorize like any patterns between, ah, the background of my laptop.

But,[00:30:00] 

uh, despite this. I like it just because it sounds fancy and it's like, it's an artificial intelligence exploring parallel universes, 

Mike Koelzer, Host: Rooney back into the company. But I want to ask, do you have any interesting hobbies? Um, no. I, 

Alex Oshmyansky, MD, PhD: I did, uh, get into filmmaking for a while and actually shot the first feature length film in virtual reality.

It premiered at South by Southwest a few years ago. And yeah, there were some. Processing, you know, stuff with the film, uh, uh, you know, other than that, uh, you know, uh, that's really cool. My wife always mentions my love of my projects to me. Like me, I tend not to have hobbies because I have them.

Yeah. Yeah, yeah. Right. Yeah. I mean, the company is very much a passion project and now it's all 20 hours a day. 

Mike Koelzer, Host: Yeah. Yeah. All right. So back on the company than Alex, so you're finding out back then that you were not able to make it as a nonprofit, and then you start saying, well, I've got to look for some people that can move this along.

So you went to the. Combinator. And then what do you find out there that says you have to make a next move? Oh, sure. 

Alex Oshmyansky, MD, PhD: So, you know, they introduced me to, uh, They have you pitch and, you know, in front of a crowd, uh, and it's something like two, 3000 investors. Uh, well, you know, that's listening to the pitch and, you know, I was very fortunate.

I was able to get a really good group of investors out of that. Uh, people who I think share the mission and ideals of the company and were willing to support it in that way. Uh, yeah. And just kind of on a whim. Uh, I had been told that, uh, Mark Cuban read his. Email him. Uh, and he does, it's just not one of his emails and juven@gmail.com.

Um, and yeah, so I emailed him and, uh, yeah, he was super enthusiastic about the idea, uh, and has really transformed, uh, everything that we're doing. Uh, you know, uh, I don't want to speak for him too much, but, you know, Mark certainly has been looking, uh, looking at the pharmaceutical space for some time as well.

Very deeply knowledgeable about it. You know, I always kind of saw him as, you know, a tech guy, uh, you know, obviously an entertainment, sports, um, you know, a big figure. Um, but yeah, I didn't realize he spent a lot of money, because he knows about PBMs. He knows about the price fixing games. Uh don't kill him. Yeah, no. Uh, and he was looking for ways to disrupt it for some time and.

And it just kinda clicked, um, then use, you know, overwhelmingly become the dominant investor, uh, in the organization. That's the name. Um, and you know, I'm incredibly fortunate to have, you know, uh, fallen in with Mr. Cuban because, you know, at the end of the day, when you're. Actively advertising that you are not maximizing profits.

Um, yeah. That's not a great way to raise capital.

Yeah. That's not a great pitch. 

Mike Koelzer, Host: Wait a minute. Back on this. Y Combinator, I thought you mentioned that they take so many nonprofits under their wing sorta. Is that to mean? They give nonprofits a chance on the floor seeing how they're going to be a profitable company, or do they take the non-profit as a loss because they feel they should do that for society or do they give you a chance because they think you're.

Be highly profitable. You 

Alex Oshmyansky, MD, PhD: Now, my interaction with Silicon Valley in general is that a lot of the investors are genuinely well-meaning people whose hearts are in the right place. Uh, I mean there's staff and other people who are just in it for the money and, you know, I'm trying to do whatever. Um, but no, you know, a lot of them, like, you know, especially the engineers who are sort of early employees at the big tech companies.

You know there, you know, you know, they definitely have a streak of idealism in them. Uh, so, you know, I think they were like, okay, you know, a certain number of cops, you know, shouldn't say companies, non-profits, uh, you know, uh, we're not going to have, you know, profitability be the most important thing with them.

We're going to see. Accelerate their mission. Can we maximize social benefit by, uh, you know, having a cup, you know, donating to these non-profits and then putting them in front of the stage of two to 3000 quote unquote on investors to look for other sources of donations for those nonprofits, 

Mike Koelzer, Host: they might be.

Getting you in front and everybody is watching you. It still might be a nonprofit ish or, or the other one we mentioned, but they may not be burning holes in their own pockets, doing that. Eventually a nonprofit, the goal might be to have it self-sustainable. And so they're [00:35:00] not seeing a company that is just going to drain money, but they know that maybe a nonprofit needs a little break at the beginning in order to then become a.

Sufficient nonprofit. Exactly, 

Alex Oshmyansky, MD, PhD: exactly. Like the people, uh, they, you know, they go in Y eyes wide open that they're not going to make a return. You know, they're donating, they're not investing. Uh, but you know, could they put, you know, for interesting, interesting non-profits that could greatly accelerate their social mission with a little bit of capital that they put them in front of two, 3000 people and they get enough donations.

Could that be the sort of activation energy necessary to get the reaction though? Uh, of that nonprofit moving forward. And I, you know, obviously don't want to speak for the Y Combinator folks, but I think that that's kind of what their intent was by letting a couple non-profits into infusion or batches, get that 

Mike Koelzer, Host: spark going and maybe bleeds to something else and so on.

And at minimum leads to more recognition and maybe more donations to help get it going. Whatever happens, you know, at least until goodness comes out. 

Alex Oshmyansky, MD, PhD: Yeah, exactly, exactly. Um, so no, I think it's just a really interesting model. I think they've had, uh, you know, a couple interesting success stories, uh, with that, uh, you know, uh, and, uh, yeah, certainly I'm, I'm glad they were willing to evaluate our application.

Cause it certainly dramatically accelerated what. How much 

Mike Koelzer, Host: time do you think, let's say a major investor either it being Mark Cuban or someone else in a position let's say with your company or similar to this, how much time do you think is spent with maybe their legal team or the investor themselves or whatever?

Laying all this out. I mean, was this pages and hours and hours and pages of stuff to get Mark's name on it, or was it not as intricate or how much is involved in that? 

Alex Oshmyansky, MD, PhD: So Mark is really different from most of the other investors. I've. I've been very lucky. All my investors are great, but yeah, you know, if you watch shark tank, uh, you know, they keep talking about how much they work with the companies that they invest in.

Um, and you know, my previous experience in entrepreneurship, uh, you know, generally, uh, investors will help, but you know, their time is valuable. So generally they'll help in terms of like making an introduction for you or. You know, something along those lines, but, uh, but no mark, mark gets super into it.

And I don't think it's just the drug company. I think it's all his individual companies. I have no idea how he has the time. Uh, but, uh, but no, he, uh, at least, um, you know, generally a couple of times a week, uh, he gets involved like operational stuff in the company at least once a week. Uh, we have.

Discussion and a back and forth about how things are going. Uh, and that in my experience in the entrepreneurial world tends to be the exception, not the rule, but he's very hands-on and very knowledgeable about the nitty gritty details. Uh, we 

Mike Koelzer, Host: introduced certainly. How much is involved in setting up something, was it like you had lawyers and they had lawyers and all this, or is that all kind of done in the Y common or they make that easy, getting that union 

Alex Oshmyansky, MD, PhD: going sort of like sample templates now, uh, or accepting like early stage investments available.

Um, so I did start a company before in grad school. Uh, I started. Uh, a company that makes door handles to dispense waterless hand sanitizer when you use them. So the idea was to keep doctors and nurses from forgetting to wash their hands between rooms, uh, and at the time, uh, so I, you know, I'm the same age as mark Zuckerberg, uh, not, not exactly a successful, 

Mike Koelzer, Host: uh, to our wives.

We are in our hearts. We are. We don't need to compare to 

Alex Oshmyansky, MD, PhD: anybody else. Uh, but before he made it kind of popular for there to be like young, the entrepreneur is, uh, you know, there was a time like this is kind of like early to mid two thousands where, you know, investors still wanted like gray hair, you know, sort of older, older guys to like gray haired, white men to like, you know, steward the company wants to the early stage founders at that.

Uh, and you know, there are a lot more, you know, this sort of pathway to getting financing as a young entrepreneur wasn't as well. You know, the template documents didn't really exist at the time. Uh, so then I remember my first company, we did a full series, like for a small seed capital round, like did a full equity raise.

So there were shares of stock issued and that was kind of a nightmare of lawyers. Uh, we had lawyers on our side. Other side, a lawyer on their side and, you know, the lawyers get paid by the hour. So it's in their interest to like, make things as complicated as humanly possible. And the deal fell almost so far, you know, several times, you know, it was just a nightmare, but it was kind of like, uh, almost of a, of a bygone era, because [00:40:00] now there are so many startups, uh, that sort of raise money.

I don't want to say it's standardized, but, you know, they're just expectations now. Uh, so generally it's, you know, uh, for most of my investors, uh, you know, we generally, you know, they heard me pitch, uh, we have an email back and forth and have coffee for, you know, 30 minutes an hour. Um, and generally afterwards they say yes or no, um, uh, the documents are all sort of standard.

Everyone knows what to expect. So on serious, I'll make a decision in about a day, uh, and you have Armani and about a week is generally the 

Mike Koelzer, Host: expectation. That was really enlightening. So I had no idea. That was a great way to explain it. Everything's kind of standardized, there might be some talk about final percentages and things, but all like the customer and stuff are standardized.

Well, some of the handheld things have made that easier. Not that you maybe would do that deal on a handheld, but there's like funding, you know, programs and stuff that probably have almost made it into like an app, you know, like big deals into an 

Alex Oshmyansky, MD, PhD: app. There are actually laps. I forget how I wish.

I can't remember the one I used, but. You know, if, uh, if your listeners want to look up something called a safe agreement, uh, S a F E simple agreement for future equity. That's generally the one that's for seed stage investments. That's very commonly used. Uh, and just those. Those template forms. You know, obviously once you get past that, you know, the danger, you know, for larger equity financing, it gets more complicated and more individualized.

But yeah, in terms of like, if you're looking to start a startup, like those are generally, uh, the documents that you would get for your initial investment. 

Mike Koelzer, Host: I saw two, Alex, you had your hands in a little bit of the COVID-19 with supplies and things like that. Are you doing something with that, too? Sure. 

Alex Oshmyansky, MD, PhD: So, um, yeah, this is a kind of a long story, but, uh, you know, uh, uh, essentially a contact reached out to me sort of towards the, to start up the COVID 19 pandemic.

Uh, this was. Early March of last year, it was the CEO of a hospital system that I had been introduced to. At one point, I was like, Hey Alex, you're in medical supply chain stuff. Uh, way you could help us get in 95 masks. And I was like, well, I'll check. And basically just, uh, put up, uh, you know, Y Combinator for its alumni has just like a message board.

And I both was anyone I've ever been in 95 masks. And yeah, I got connected to several people who had had similar requests at the same time, including people with. Uh, who had worked extensively with, uh, you know, tried to serve Chinese supply lines. Uh, yeah. And, uh, you know, we all kind of rap together.

We started a nonprofit called, uh, project and 95, which then coalesced into an even larger group of people doing the same thing called the C 19 coalition, basically a whole bunch of well-meaning people who had the same idea at the same time. Um, and yeah, I think we, you know, as, since the start of that, we're able to destroy.

Uh, project in 95 alone, about 5 million pieces of people and the C 19 coalition more broadly, I think, over a billion units of PPE, uh, over the last year. So that was one of the founding members of that, but, uh, sort of stepped away after a few months old, uh, had, had ended or not ended. It hasn't ended.

He still has 

Mike Koelzer, Host: the worst part of the PPE. The worst part 

Alex Oshmyansky, MD, PhD: of it, it's sort of, there was an infrastructure at that point and what I had to offer. Particularly helpful anymore. Uh, so I sort of bought out of it, uh, at that point, but it's still around. Uh, I actually just looked it up out of curiosity the other day.

It's, you know, there's a whole board of directors and hundreds of volunteers and still have a PPE available, uh, you know, to, to aggregate. Uh, through that website. So 

Mike Koelzer, Host: it's amazing how fast some of that stuff happened, you know, cause for a while and the pharmacy and all them, all the listeners know this, there was a few weeks where, you know, everything was out and stuff, but then it's like, it's amazing how fast capitalism get stuff going for people to make a rightful dollar on some of that.

This is kind of a cliche question, but let's say 10 years from now, do you see yourself being, um, you know, very involved with this company? Do you see yourself saying, okay, I'm going to go do something else because my skills lie in doing these other ideas, where do you think you would be doing in 10 years?

Alex Oshmyansky, MD, PhD: Uh, not just saying that really don't, I, I, you know, I guitar, you know, the company sort of, so all encompassing, I can't really envision doing anything else, but that, I mean 10 years of so far out, who knows. But yeah, my, my only plan is to keep running the company and growing it because there's plenty of stuff to do for 10 years.

Mike Koelzer, Host: If [00:45:00] you're an 18 year old again, How many years ago, we won't say how old are you? All right. So 18. So that was half of your life. So if you were 18, again, any huge diversions that you would have avoided, would you have done things like you did now? Would you have taken a different path or would things have been about the same for you?

Alex Oshmyansky, MD, PhD: Definitely regret as I did not learn to code better when I had more time to do it. Now I can code, you know, my, my PhD required coding obviously, but, you know, but that's, you know, very sub-specialized mathematical design 

Mike Koelzer, Host: or. Something to make like the swamp AI important stuff like that.

Alex Oshmyansky, MD, PhD: I think that's an incredibly valuable skill set. I know it was like, you're saying it's cliche to say. Uh, but it did super true, you know, that's, it's such a valuable skill set that I probably would have built that up more. You know, there's still plenty of time to do it, but it's just easier when you're young and have lots of time on, I probably would've ventured out into entrepreneurship perhaps a little bit earlier, uh, really kind of clicked for me.

Uh, but you know, uh, it just takes a long time to get properly trained as a medical doctor and, uh, or, you know, as, you know, a pharmacist and there's a reason for all that time, you know? You're doing and not killing people. You have to spend a lot of time learning it. 

Mike Koelzer, Host: Is there a chance that you would have, there's always a chance, but would you might have.

Not got a medical degree and maybe been Morin computers, or are you thinking more just hobby-wise that you would have taken the time when you could computer-wise 

Alex Oshmyansky, MD, PhD: hobby-wise, you know, I view it as a, you know, a great privilege to be able to, to help help it. Right? Yeah. It's hard. And it's so part of my personality, my definition of self at this point, that it's hard to envision anything else.

Yeah, but, you know, certainly would have been good to have the other skills that will be helpful at this point. 

Mike Koelzer, Host: W w when you say programming, is that kind of like a skill, like learning how to. Do woodworking and the tools are not that important. You could use different saws and different companies, electronic, you know, hammers or whatever, you know, different tools, but you still know the process or is it tied down more into one coding?

Cause I'm always thinking, like if I learned it, I'd probably learn the wrong one. Is that not a thing to worry about? 

Alex Oshmyansky, MD, PhD: Yeah. We think it's, there's probably a middle ground in there. You get more, you know, like. When we can do different types of songs is probably easier than

overlap, like JavaScript or Python, your ability to understand like C plus plus there's a lot of overlap. 

Mike Koelzer, Host: You're going to learn it a lot 

Alex Oshmyansky, MD, PhD: quicker and learning different languages, like not programming languages, but 

Mike Koelzer, Host: like verbal. 

Alex Oshmyansky, MD, PhD: Yeah. And especially, you know, if there's similar language and there's probably more overlap there.

Mike Koelzer, Host: Yeah. Like German and English are fairly similar or something like that. 

Alex Oshmyansky, MD, PhD: And a lot of it is there's a lot of math and algorithms that go into it, and those are the same between all the programming languages. Gotcha. You know, I think it's probably somewhere in between 

Mike Koelzer, Host: in between two of them 

Alex Oshmyansky, MD, PhD: learning a different language.

Like verbal language, using a different set of tools each time it's not completely transferable, but at the same time, you know, like learning Mandarin each time you got to learn a new 

Mike Koelzer, Host: programming language. Right. What advice do you wish you maybe would've been given like at, well, let's say at 18, what advice do you wish you could have been given?

Let's say that maybe you knew intrinsically that you could have done more programming. It was something that. You could have maybe thought of on your own then any advice that you wish you would've gotten back when you got your first degree that externally maybe could have helped you take more risks, more 

Alex Oshmyansky, MD, PhD: risks in general.

Uh, you know, it's always scary to, to venture out from, from what you're doing, but, um, you know, I think. The data as much as you can, uh, people who tend to take more risks with their career, uh, seem to wind up doing better, like control risks. You don't want to do something crazy, but like, uh, you know, if you don't take some element of risk in your life, uh, and even in just your professional life, you know, uh, you know, you'll never really get the reward from it.

Uh, 

so 

Mike Koelzer, Host: I always say that like, where you look at these ink articles, you know, Inc you look at those articles and everybody has gone through. Three or four catastrophes, not down to the bottom, but I mean, they've all been through their struggles. And I tell my wife, it's like, this is maybe 10 [00:50:00] years ago.

It's like, well, I can't worry so much about things because nobody usually starts down here and just has this straight trajectory going up. And it's like, I don't know why I try to fight for that so much. Yeah. So much anxiety that that doesn't happen because that's nobody's story. Everybody's story has its ups and downs.

So that's, that's really good advice

Alex Oshmyansky, MD, PhD: and you only have to succeed as long as, you know, you can fail like that a dozen times, but if you just hit it right once, then. 

Mike Koelzer, Host: Yeah, I'm still waiting for mine.

Yeah, that's right. Hey Alex, what a pleasure talking to you? That's my wish. 

Alex Oshmyansky, MD, PhD: I really appreciate you taking the time to chat today. It's always fun to see these kinds of things. Um, if any of your listeners, a long chat about. Uh, about the business. I'm alex @ alex@costcostrobes.com. 

Mike Koelzer, Host: Wonderful. We'll be watching well, thanks a lot, Alex.

And, um, continued best wishes on everything you're doing. Alright. Talk to you again. Thank you.