Mark Cuban tells us how he’d fix healthcare

Despite coming up in the worlds of entrepreneurship and reality television, Mark Cuban has become a big name in the healthcare industry in recent years.

In 2022, the billionaire entrepreneur founded Mark Cuban Cost Plus Drug Company, an online pharmacy that skirts insurance and sells drugs at cost with a 15% markup and fee for pharmacy labor and shipping. The company also posts on its website exactly how much it paid manufacturers for the medicines it sells in an effort to boost transparency in a historically complex and opaque industry.

In a recent interview, Cuban told Healthcare Brew he became interested in disrupting the healthcare industry in 2017 when the first Trump administration was determined to “repeal and replace” Obamacare.

“Out of curiosity, I dug in and started getting involved with it and trying to look at ways to change the system, and come up with better approaches to health insurance and healthcare,” he said.

When Alex Oshmyansky, a radiologist who became co-founder and CEO of Cost Plus, sent Cuban an email pitching a compounding pharmacy to manufacture drugs on the FDA’s shortage list, Cuban said, “I thought, ‘OK, that’s cool, but that’s not big enough.’”

He envisioned manufacturing far more than the couple hundred drugs on the FDA’s list. Today, Cost Plus sells more than 6,000 drugs, both generic and branded.

Cuban is still very involved in the day-to-day of running the company, he said. While Oshmyansky focuses on operations and running the manufacturing factories, Cuban focuses on strategy, marketing, and where Cost Plus will go next.

Putting the industry on blast

Beyond Cost Plus, Cuban has become known as a vocal critic of pharmacy benefit managers (PBMs), often posting scathing criticisms on his X account.

However, he told Healthcare Brew he was wrong to focus on PBMs in isolation rather than looking at them as part of insurance companies.

“The greatest trick the insurance companies ever played was putting the PBMs out there to take all the hits and pushing people to ignore everything else that they’re doing,” he said.

He called out issues with employer-sponsored health insurance in particular, saying insurance companies take advantage of the fact that most CEOs don’t understand the complexities of healthcare finances and therefore don’t know how to pick financially smart health plans.

Because he used to be one of those CEOs, he said.

Before starting Cost Plus, Cuban said he worked with a broker to manage insurance benefits for his companies. The broker told him every year that he got a “great deal” because his cost of providing benefits rose only 4%–5%, compared to other companies whose costs went up 7%–9%.

But in 2022, after spending several years learning the ins and outs of the healthcare industry and launching Cost Plus, Cuban decided to see for himself what kind of deal he had been getting. He calculated how much the Mavericks, the Dallas-based basketball team he owned a majority stake in from 2000 to 2023, paid for generic medicines over an 18-month period. The team paid $169,000 for generics that would have cost around $19,000 from Cost Plus, he found.

“When we talk about the challenge with healthcare—even PBMs—it’s the culture of how these companies are run,” Cuban said. “And if that’s the culture to squeeze as much as you can from wherever you can squeeze it, to claw back late pay and get whatever you can, you’re not aligned with patients.”

Waving a magic wand

Given the intricacies of health insurance, it’s no surprise that pharmaceutical pricing is confusing as well. The pharma industry is “the craziest industry ever,” Cuban said. “If they were on Shark Tank, we’d be going nuts.”

So, if given free rein to change anything about the industry, Cuban said his first move would be to make it so PBMs didn’t control formularies, or lists of drugs a health plan will cover, “because that’s all their leverage.” Every state could make its own formulary committee, as they already do for their Medicaid programs, he added.

The second thing he’d do would be to take legislation passed in Tennessee and Texas allowing people to pay cash prices for medications and have that money go toward their insurance deductibles, then expand that nationwide.

“If that were to happen and we were to get net pricing from the big specialty manufacturers, everything in pharmacy changes,” Cuban said. “Prices drop 30%, 40% overnight.”

Since he doesn’t actually have a magic wand, Cuban instead supports the bipartisan Break Up Big Medicine Act, which Sens. Elizabeth Warren and Josh Hawley introduced in February. If passed, the bill would break up healthcare conglomerates, barring insurance companies from owning PBMs and vice versa.

“I think it’s absolutely necessary for the biggest insurance companies to divest their non-insurance assets. Because the market is completely inefficient,” Cuban said.

Upping the score

Another way the federal government has attempted to tackle the issue of drug prices is by forming TrumpRx, a direct-to-consumer website to sell medicines to uninsured people in the US.

Cuban wrote in an X post following the announcement in September that he’d give TrumpRx “a grade of B” because pharma companies’ stock prices “didn’t get crushed,” suggesting the platform isn’t expected to make much of a splash.

Last October, at the annual HLTH conference in Las Vegas, Cuban announced Cost Plus would be working with TrumpRx, Healthcare Dive reported. Cuban told Healthcare Brew he chose to work with TrumpRx because it gives Cost Plus greater distribution, and “anything that saves patients money is a good thing.”

And now that the platform has been up and running for about a month—following delays from its planned January release date—Cuban said he’d upgrade his rating to “an A-” because more drugs (57) are now available on TrumpRx, including IVF medicines and GLP-1s.

“I think they’re doing a good job actually,” he said. “Anytime that you dent those big insurance companies, those mega-conglomerates, that’s a win.”

Weighing in on current events

Another top-of-mind issue in the pharma world is tariffs, which the Trump administration has been threatening since last April. So far, no pharma tariffs have actually materialized, though Trump has threatened 100% tariffs for any pharmaceutical company that doesn’t have manufacturing plants in the US.

But Cuban says he’s not worried about tariffs just yet.

“We could make our own generics. We’d have to buy the [active pharmaceutical ingredients (APIs)] from outside the country, but we can buy the APIs, store them in barrels, and have a year or two worth of hundreds, if not thousands of drugs, and we could do it within 18 months,” Cuban said.

What’s actually holding them back, rather than tariffs, he said, are what’s known as Abbreviated New Drug Applications, or ANDAs, which manufacturers are required to submit to the FDA for every new drug they make. But they cost more than $350,000 per application.

“That kills the economics,” he said. “We’re working with the FDA and…if we can get that waived or significantly reduced or even turned into a tiny licensing fee, then within 18 months, we’d be able to make most of our generic tablets here in the US.”

In addition to tariffs, the pharma industry has been paying close attention to whether the recent war with Iran will disrupt the supply chain. Cuban said “that’s a risk,” but Cost Plus has up to 60 days’ worth of inventory on hand.

“If we get past 60 days, then it could start to become an issue,” he said. “But we keep on buying as much as we can to have it in supply.”