Cost Plus Drugs Co-founder Mark Cuban | Full Interview | Code 2022

Cost Plus Drugs Co-founder Mark Cuban reveals how his company is revolutionizing healthcare by providing transparent pricing, eliminating middlemen, and offering affordable generic drugs, including insulin.

Key takeaways
  • Transparency in Healthcare Costs: By adding transparency to the cost of medications, Cost Plus Drugs aims to open the kimono on healthcare, allowing patients to see the actual costs of their medications and compare prices across different pharmacies.

  • Eliminating Pharmacy Benefit Managers (PBMs): PBMs are often criticized for their role in inflating drug prices. Cost Plus Drugs bypasses PBMs, allowing the company to offer lower prices to patients.

  • Direct-to-Consumer Model: Cost Plus Drugs operates on a direct-to-consumer model, meaning patients can purchase medications directly from the company’s website without going through a pharmacy. This eliminates the middleman and further reduces costs.

  • Generic Drugs: Cost Plus Drugs primarily focuses on generic drugs, which are typically more affordable than brand-name drugs. The company has also started manufacturing its own generic drugs to further control costs.

  • Cost-Plus Pricing: Cost Plus Drugs operates on a cost-plus pricing model, meaning the company charges a fixed markup on top of the actual cost of the drug. This markup is typically around 15%, significantly lower than the markups charged by traditional pharmacies.

  • Impact on Insulin Prices: Cost Plus Drugs has made a significant impact on the price of insulin, a life-saving medication for people with diabetes. The company offers insulin at a price that is significantly lower than the prices charged by traditional pharmacies and insurance companies.

  • Political Involvement: Mark Cuban, the founder of Cost Plus Drugs, has been vocal about his political views and has criticized both the Democratic and Republican parties for their roles in the high cost of healthcare. He has also expressed interest in running for president in the future.

  • Expansion into Other Healthcare Services: Cost Plus Drugs is exploring the possibility of expanding into other healthcare services, such as testing and medical devices. The company believes that it can bring the same transparency and cost-saving approach to these areas as it has with prescription drugs.

  • Challenges and Limitations: Cost Plus Drugs is still a relatively new company and faces several challenges, including competition from traditional pharmacies, the need to scale its operations, and the complex regulatory environment surrounding healthcare. Additionally, the company’s focus on generic drugs may limit its ability to offer a wide range of medications.

  • Impact on the Pharmaceutical Industry: Cost Plus Drugs has disrupted the traditional pharmaceutical industry by challenging the status quo and pushing for lower drug prices. The company’s success has put pressure on other pharmacies and drug manufacturers to lower their prices and improve transparency.