Mark Cuban, the founder of Cost Plus Drug Co., remains committed to disrupting the U.S. health care system to make it more affordable for consumers.
“Prior to us, there was no transparency whatsoever, and so nobody knew what the price of any medication was,” the entrepreneur and investor said during an appearance on The Daily Show. “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? Transparency.'”
Cost Plus works directly with drug manufacturers to bypass middle men 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. The company now sells about 2,500 drugs, including some brand-name medications, and partners with a growing list of health systems. It also manufactures its own generic medications as well as several drugs in short supply out of a 22,000-square-foot manufacturing plant in Dallas.
Although Cost Plus delivers its medications through mail order, it is starting to partner with retail pharmacies as well.
“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 typically would cost $2,000 in most pharmacies but that his company offered for less than $30.
Cuban said his company is doubling down on its promise of transparent drug pricing and will start publishing its customer contracts.
“We’re going to publish all contracts,” he told Stewart. “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.'”
Cuban was critical of the three dominant PBMS — 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,” he said. “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.”
When asked what else he has his eye on, Cuban replied, “health care.”