Disrupting Prescription Drug Pricing: Mark Cuban’s Cost-Plus Vision

Exposing Prescription Drug Pricing Flaws

Prescription drug pricing in the US is riddled with inefficiencies, as revealed in this JAMA interview published online on February 12, 2026. Mark Cuban, cofounder of the Mark Cuban Cost Plus Drug Company, discusses with Editor in Chief Kirsten Bibbins-Domingo how pharmacy benefit managers (PBMs) owned by major insurance companies dominate formularies and pricing through opaque practices. His company’s model—selling medications at manufacturer acquisition cost plus a 15% markup—exposes systemic flaws, particularly for generics, but extends to branded drugs blocked by PBM control. The core argument is that the market lacks efficiency due to vertical integration, forcing patients and employers to pay inflated retail prices while rebates flow back to PBMs and insurers.

PBM Formulary Lockdown

Cuban asserts that the US prescription drug market is not efficient, as evidenced by Cost Plus Drugs’ inability to access branded and specialty medications despite willingness to apply the same cost-plus pricing. He explains that pharmaceutical manufacturers avoid direct sales to his company because the “big 3 insurance companies” owning PBMs threaten to downgrade their entire portfolios on formularies covering 300 million lives, potentially costing manufacturers tens to hundreds of millions. A specific example is a recent conversation with a pharmaceutical CEO, who indicated that Cost Plus Drugs would need to cover half of 180 million lives before manufacturers could risk collaboration. This control extends beyond generics, with Cuban noting that branded drugs like Eliquis, retailing at $609, involve 50% rebates captured by PBMs, highlighting how formulary auctions prioritize PBM leverage over competitive pricing.

Insurer Scale Capture Tactics

The interview reveals how PBMs, owned by insurers with thousands of subsidiaries including hospitals, oncology centers, and physician practices, achieve “scale capture” and regulatory influence, mirroring the AT&T monopoly broken up in 1984. Cuban quantifies this with one insurer’s 2600 subsidiaries generating $200 billion in intercompany transfers—0.6% of US GDP—enabling “left pocket, right pocket” markups invisible to employers. For self-insured plans covering over 160 million beneficiaries, employees face full retail prices like $600 for Eliquis until meeting deductibles, with half as rebates retained partly by PBMs (e.g., 10%) and passed to insurers, effectively making sick employees subsidize employer plans. This dynamic disadvantages patients with low take-home pay, who skip medications due to high deductibles.

Divestiture and Employer Pushback

To achieve efficiency, Cuban advocates divesting noninsurance assets from the largest insurers, breaking their control over PBMs and subsidiaries to prevent intercompany manipulations. Complementing this, he urges educating employers—the second-largest expense after payroll—on PBM rip-offs, citing consultants and brokers receiving hidden fees from insurer subsidiaries. Transitioning from critique to action, Cuban positions independent pharmacies and physicians as parallels: pharmacies close due to under-reimbursement (e.g., $560 for $570 Eliquis cost or $750 for $1300 GLP-1 agonist), prompting state laws in Oklahoma, Arkansas, and Pennsylvania mandating fair PBM reimbursements and fill fees. He calls for physicians to form lobbying associations like the National Community Pharmacists Association to combat under-reimbursement, late payments, clawbacks, and out-of-network steering.

Rewriting Reimbursement Rules

These insights challenge entrenched assumptions of competitive prescription drug pricing, revealing PBM-driven opacity as a barrier to value-based reimbursement and access for cost-effective therapies. Implications include heightened scrutiny of formulary decisions in pricing models, potentially accelerating transparency mandates and influencing payer negotiations for branded drugs if divestitures occur.

Cuban’s trust equation—transparency divided by self-interest—suggests reframing reimbursement around direct cost-plus benchmarks, empowering self-insured employers to bypass PBMs and reduce patient cost barriers. Critiques of Cost Plus Drugs, such as limited branded offerings and pharmacy networks, are acknowledged but outweighed by its transparency, urging clinicians to advocate collectively against insurer consolidation to safeguard independent practices and ensure rested providers deliver optimal care, ultimately fostering equitable drug access.