Billionaire entrepreneur Mark Cuban isn’t holding back when it comes to America’s healthcare system. Speaking on the Equity podcast this week, Cuban argued that drug pricing is fundamentally flawed, opaque, and designed to profit at the expense of patients.
“No one looks at the financial side of healthcare and says, ‘This is the way it should work,’” Cuban said. “When you go to the doctor and you get a prescription, you have no idea what the cost to you is going to be.”
He blames pharmacy benefit managers (PBMs) third parties that set and manage drug prices, for the lack of transparency. To fight back, Cuban launched Cost Plus Drugs in 2022, a company that sells medications directly to consumers at a clear price: manufacturer’s cost plus a 15% markup, a $5 pharmacy fee, and shipping.
The savings are stark. A generic chemotherapy drug that might cost thousands at a retail pharmacy could sell for just $21 through Cost Plus, Cuban said.
The Dallas-based startup is also tackling drug shortages, which Cuban claims are often artificially created to drive up prices. To counter that, he built an automated manufacturing facility in Dallas capable of producing and shipping drugs to hospitals within hours.
“Everybody said you can’t fight the big insurance carriers or PBMs,” Cuban noted. “I just won’t work with them. I’m not going to play by their rules, because that’s not aligned with patients.”
Unlike Amazon Pharmacy, which still partners with PBMs, Cost Plus Drugs aims to bypass them entirely, a strategy Cuban believes gives him an advantage.
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His advice to founders: don’t rely on incumbents. “All of healthcare is basically an arbitrage,” Cuban said. “If you’re going to compete, you’ve got to be quick, lean, and willing to move differently than the elephants.”
By combining low-cost pricing, in-house manufacturing, and a refusal to work within the traditional system, Cuban is betting that Cost Plus Drugs can disrupt one of the most entrenched, and profitable, industries in America.
