This Week Health
June 18, 2022

Cost Plus Drugs Company, Mark Cuban's Chance to Disrupt the Industry

Mark Cuban's Cost Plus Drugs Company is a Pharmacy Benefit Manager (PBM) disrupting the pharmaceutical industry by solving patient equity problems. Founder Mark Cuban outlines the difficulties in prescription medicine and how Cost Plus Drugs cuts out the middleman to provide safe and affordable medicine for Americans.

Patients are Getting Shortchanged

In a system where patients are supposed to be protected, there is no protection, certainty, or transparency. The patient is left out of the equation as payers and providers align interests financially.

In Cuban's mission to provide the lowest prescription costs, Cost Plus Drugs deals directly with manufacturers and sells straight to consumers. This streamlined approach partners with True Pill and does not offer things like rebates, contracts, or insurance.

"We have one simple goal, to be the lowest-cost provider of drugs, period. You're not going to get bells and whistles," Cuban said.

The Equity Problem

Mark Cuban, Founder, Cost Plus Drugs Company

The company primarily chooses drugs offering bioavailability and impact. With a focus on equity, these are necessary drugs and hard for people to afford. Cost Plus Drugs first focuses on medications often in shortage rather than drugs with the highest prescription rate.

Equity for American patients needing transparently-priced drugs is the company's primary purpose. To Cuban, it is criminal for people to choose between rationing drugs, paying rent, and having other necessities.

"This is an equity problem where not everybody has equal access to drugs. Not everybody has a great job with a great insurance program where they don't have to worry about it," he explained.

Patients no longer need to navigate co-pays and medication deductibles while using Cost Plus Drugs. Instead, they can freely navigate the company’s website, where pricing information is provided.

Cost Plus Drugs Offers Price Transparency and Savings

Cost Plus Drugs shows drug pricing on its website, offering full transparency of what patients can save by purchasing through them. The price differences are significant, with some cancer medications offering over two-thousand dollars of savings.

While customers can find lower prices than the reference prices used in cost comparisons, it requires research and jumping from pharmacy to pharmacy to find, Cuban explained. Even after receiving a lower cost this way, the same price is not a guarantee in the future.

Cost Plus Drugs provides consistently low prices and plans to further lower medications as possible. By forgoing a middleman, the company offers these low rates plus an additional 15% charge, according to Cuban. Price breakdowns are visible for each drug online, allowing customers to decide with all available information.

Taking out the Middleman

Cost Plus Drugs fulfills medications through Truepill and manufactures with third-party relationships. The goal is for the company to manufacture the drugs independently. A facility in Dallas, Texas, is currently in construction, which Cuban hopes will be complete by the end of 2022.

As a PBM, the organization deals directly with unions, self-insured companies, and hospitals. While some managers have become vertically-integrated organizations that control high retail prices through overseas entities, the goal for Cuban is transparency.

"By being a PBM that's transparent–by being a retailer that is transparent–we eliminate all the uncertainty," he said.

Changing the Payer System

Currently, insurance is not accepted at Cost Plus Drugs, as it significantly adds to the cost of drugs. Instead, Cuban's company offers a cash model.

Looking at the profits from Medicare and medical loss ratios, insurance companies have no direct incentive to lower rates and keep hospitals charging more, Cuban explained.

Even with recent laws requiring online prices, pricing dramatically changes between insurance programs. This inconsistent payer system is something Cuban is changing.

"That is absolutely insane. We won't work with insurance companies unless they change how they do business," he said.

Fitting the Business Model with Health Providers

Health systems and providers want cheaper drugs, Cuban emphasized. Not only does this make it easier for providers, but it also alleviates additional administrative costs.

A red flag for the cost of healthcare is administrative costs. New contracts are required each time providers join a network, and renewals include additional fees. Beyond this, the payers gain an increased ability to deny claims, which is challenging for providers.

"By working with us, we simplify that and minimize the administration costs. So it's cheaper, easier for the provider, and cheaper and easier for the patient as well," Cuban said.

Cost Plus Drugs is Disrupting the Industry

Cuban explained that capitalism is about creating businesses for rewards and is not always about maximizing cash profits. With his capital as an entrepreneur, he sees meaningful reward in disrupting the pharmaceutical industry.

The mission of Cost Plus Drugs differs from other billionaires’ attempts to solve problems within healthcare. With capital upfront, there is no need to raise money, allowing the company to do things the way it wishes.

"We're not trying to fit in, and it's not about how much money I have in my wallet. It's really just our approach," he emphasized.

After several years of working towards the launch of, there has been a significant success. The proof is in the results from customers and patients.

Patient Successes

When patients struggle, they often talk online to other struggling patients. Patients are the greatest advocates for Cost Plus Drugs, as they recommend to others to check their website’s prices.

The company grows in popularity as customers are relieved to know better than what insurance companies tell them. This, for Cuban, is the only relationship the company needs.

People lacking the finances to afford life-saving medications will look to every resource they can. Cuban desires to reduce the stress of these patients as much as possible by consistently providing fair prices. As the company continues to expand, it plans to add more medications to address the equity issues affecting patients.


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