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Pharmaceuticals

Mark Cuban: Business Is How We Teach Washington What Works

At the Dallas Regional Chamber's annual meeting, he discussed how his pharmaceutical company is doing to drug prices what government regulation has been unable to do.
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Mark Cuban
Jake Chessum

Mark Cuban doesn’t use lobbyists to make changes in Washington. What’s more effective, he says, is proving what works by building successful businesses. The latest example is Mark Cuban Cost Plus Drug Company, which is one year into business and doing its best to disrupt one of the most entrenched industries in the country.

Cuban was the main event at the Dallas Regional Chamber’s annual meeting, which was named the best chamber of commerce in the country last year. He was interviewed by The 19th Founder Emily Ramshaw in front of a packed house at the Winspear Opera House. Cuban sidestepped a couple of the questions about politics (“Hell no,” he responded to whether he was running for president) but was happy to discuss the growth of his drug company in Deep Ellum.

Ramshaw noted the love Cost Plus gets on Twitter, where there are countless examples of those celebrating the savings achieved through ordering drugs via Cost Plus. On the company’s website, customers can see the cost of the drugs from the manufacturer, the 15 percent added fee for shipping and Cost Plus’ services, shipping and dispensing fees, and the total price– a level of transparency uncommon in healthcare.

In the first year, Cost Plus has added more than 1.7 million accounts purchasing more than 1,000 drugs. Cuban brought up the leukemia drug Imatinib, which cost patients between $250 and $2,000 (even after discounts). At Cost Plus, the same medicine is $14.

So how is he doing it? Transparency is part of the formula. Cuban says the industry is now using the list of drug prices on their website as a price list, as the costs of drugs have historically been hidden via layers of go-betweens. Those middlemen, called Pharmacy Benefit Managers, have been at the center of skyrocketing drug prices. These companies, which are third-party administrators for pharmacies responsible for paying drug claims, have become a new source of revenue for pharmacies, increasing drug prices along the way. Cost Plus cuts out the intermediaries and sells drugs at lower prices.

Research published in the Annals of Internal Medicine found that Medicare spent $9.3 billion each year on 89 drugs also offered by Cost Plus. If Medicare had purchased those same drugs from Cuban’s company, it would have saved taxpayers $3.3 billion.

The company is looking to add partnerships to supply drugs to employees and self-insured employers. The Dallas Morning News reported that it is in conversation with hospital systems to address drug shortages.

The success and growth of the company, Cuban says, is an example of capitalism finding solutions where the government hasn’t. “The best way to teach politicians how to do things is by growing a business because that’s the one thing they pay attention to,” he said at the meeting. “They see where the money is, figure out what’s working and what’s not. By learning what to do, we can help make our city or state or country better.”

Cuban touched on a range of other issues throughout the conversation, including the importance of artificial intelligence for all businesses (“If you look at the top 10 companies on the stock market by market capitalization, all but Berkshire Hathaway are all great at artificial intelligence”), the importance of branding for the next generation (“If your brand doesn’t match up with how Gen Z sees themselves, you’re discarded”), and the importance of walkability (“Every great city is going to be a walking city that puts people over cars”). He is also a proponent of ranked-choice voting to prevent extremism from making it to the ballot on both ends of the spectrum.

During Ramshaw’s “Lightening Round” at the end of the conversation, we learned that TikTok is a “bathroom utility” for Cuban, he wishes he would have invested in Spike Ball on Shark Tank, and that if forced to listen to one song on repeat in perpetuity, it would be “Good Vibrations” by the Beach Boys.

Asked if he was ready to disrupt other industries, Cuban insisted that his plate was full with healthcare. Cost Plus started as a cold email from radiologist Alex Oshmyansky but has become an influential player in the pharmaceutical industry. Cuban’s thoughts about taking on some of the most established industries might be counterintuitive but may prove correct. “When you talk about disruption and trying to find new opportunities, sometimes it’s the biggest industries that seem the most entrenched and the most stable that are the ripest for opportunity,” he says.

Author

Will Maddox

Will Maddox

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Will is the managing editor for D CEO magazine and the editor of D CEO Healthcare. He's written about healthcare…

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