Entrepreneur and investor Mark Cuban wants to "f--k up" the U.S. healthcare system to make it more affordable, the billionaire told "The Daily Show" host Jon Stewart this week.
While the "Shark Tank" star acknowledged opportunities to have big ambitions in politics or raise prices to make more money from his upstart online pharmacy, Mark Cuban Cost Plus Drug Company, Cuban said he's more interested in disrupting healthcare to bring about long-term changes for the industry.
“I don’t want to be 95 and look and say ‘I was president,’ but I didn’t get to know my kids at all. I’d rather say, ‘I f---ed up healthcare and everybody’s healthier and got a better world to live in,'" Cuban said to Stewart as a guest on his show this week.
Launched in January 2022, Cost Plus Drug Company is making waves in the industry. It works directly with drug manufacturers to bypass middlemen and lower prices. For consumers, the price of each drug includes a 15% markup as a profit margin, a $3 pharmacy handling fee and a $5 shipping fee. Cost Plus also transparently displays what it pays for its medicines.
“Prior to us, there was no transparency whatsoever and so nobody knew what the price of any medication was,” Cuban said this week. “These pharmacy benefit managers are dictating prices left and right. They’re basically stealing money from employers and employees. So we walked in there and said, ‘What’s the one missing piece?’ [It’s] transparency.”
Co-founder and CEO Alex Oshmyansky, M.D., Ph.D. actually started Osh’s Affordable Pharmaceuticals in 2018. “On a whim," he sent a cold email to Cuban describing his goal to reduce the cost of generic drugs for patients, Oshmyansky told Fierce Healthcare in a previous interview when the company was name one of the Fierce 50 of 2023. Cuban initially joined the company as an investor. “We started Cost Plus as co-founders. Doing a transparent cost-plus mail order wasn’t the original thought. It was something we came up with together. I believed that together we could pull it off,” Cuban told Fierce Healthcare last year.
The company is now becoming a major disrupter in generic drug pricing. Cost Plus now sells about 2,500 medications, including some brand-name drugs, and it partners with a growing list of health systems. Community Health Systems expanded its previously announced partnership with Mark Cuban Cost Plus Drug Company to all 71 of its affiliated hospitals. CHS was the first health system to directly purchase pharmaceuticals from Cost Plus. The companies unveiled their collaboration, which initially focused on high-demand generic injectables, in March.
The company now works with at least four PBMs, including Rightway, EmsanaRx, RxPreferred Benefits and PCA Rx.
It made waves when it inked a partnership with Coherus BioSciences to sell a biosimilar version of AbbVie’s blockbuster rheumatoid arthritis drug Humira.
A year ago, Blue Shield of California, one of the state’s largest health insurers, announced it would drop CVS’ Caremark as its main PBM in favor of a new model for drug benefits. The insurer plans to partner with Cost Plus Drug Company along with Amazon Pharmacy, Abarca and Prime Therapeutics.
It marked the second insurer to sign with Cost Plus, following Harrisburg, Pennsylvania-based Capital Blue last fall.
Cost Plus also now manufacturers its own generic medications and as well as drugs in short supply out of a 22,000-square-foot manufacturing plant in Dallas. Cost Plus initially started to manufacture commercial batches of epinephrine and norepinephrine for patients in the intensive care unit, according to Oshmyansky
In July, the Food and Drug Administration approved allowing Cost Plus to temporarily import a syphilis drug that has been in shortage for more than a year, the company said in a post on X (formerly Twitter).
Cuban's company is doubling down on its promise of transparency on drug pricing and will start publishing its customer contracts, Cuban told Stewart.
"We're just getting it approved today. We're going to publish all contracts. Never before has it been done where, for my companies, we're saying, if you want to do business with us, if this hospital system wants to work with my companies, whatever it may be, we're going to publish them and put them online for anybody to see all of our pricing," he said.
Cost Plus offers its medications through mail order but is starting to partner with retail pharmacies, Cuban said.
"We are in the process of having a significant impact on the drug market," Cuban said, noting that transparent business practices have helped lower the price of medications. He cited a chemotherapy drug that would typically cost $2,000 in most pharmacies but his company offered for under $30.
Cuban had some spicy things to say about the big PBMs, with the three biggest players in the market being CVS Health's Caremark, Cigna's Evernoth/Express Scripts and UnitedHealth's OptumRx. "There's no reason for the big ones that control 90% of the prescriptions that are filled, there's no reason for them to exist. There are others that are called pass-through PBMs that show you all your claims, show you all your data, show you all your pricing, that do it for a fraction of the price. So there's an opportunity for disruption," Cuban told Stewart. Pass-through PBM means to directly transfer pharmacy fees and rebates to the client or patient without any additional markups or intermediaries.
Cuban also cited the Federal Trade Commission's (FTC's) recent interim staff report that contends the top PBMs overcharge patients for cancer drugs and steer patients toward its pharmacies.
The report stirred up discontent among some industry observers and the PBMs. They said the report did not prove the FTC’s claims and used limited data while relying too heavily on anecdotes.
"Like any agency, they do some thing's right and some things wrong, but, in this case, with the PBMs, they're crushing them, and it's justified," he said.
Cost Plus' approach seems to be making an impact as incumbent pharmacy giants like CVS and Walgreens are now following Cost Plus' blueprint to offer transparent drug pricing. In December, CVS Health said it was overhauling the way it reimburses its pharmacies for prescription medications as the healthcare industry faces increased scrutiny for high drug prices.
When Stewart asked Cuban what else he had his eye on, the entrepreneur simply replied: "Healthcare."