{"id":211267,"date":"2024-03-08T10:15:14","date_gmt":"2024-03-08T10:15:14","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2024\/03\/08\/mark-cuban-says-ceos-dont-understand-their-health-care-costs-heres-what-the-cost-plus-drugs-cofounders-mistakes-have-taught-him\/"},"modified":"2025-06-25T17:21:03","modified_gmt":"2025-06-25T17:21:03","slug":"mark-cuban-says-ceos-dont-understand-their-health-care-costs-heres-what-the-cost-plus-drugs-cofounders-mistakes-have-taught-him","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2024\/03\/08\/mark-cuban-says-ceos-dont-understand-their-health-care-costs-heres-what-the-cost-plus-drugs-cofounders-mistakes-have-taught-him\/","title":{"rendered":"Mark Cuban says CEOs don\u2019t understand their health care costs. Here\u2019s what the Cost Plus Drugs cofounder\u2019s mistakes have taught him"},"content":{"rendered":"

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When a CEO fails to grasp the nuances of their company\u2019s health care costs, it\u2019s not just the bottom line that suffers. Employee efficiency and productivity could plummet, too, not to mention the corrosion of company culture. For these reasons, billionaire entrepreneur and Cost Plus Drugs cofounder Mark Cuban<\/a> urges business leaders to take a hard look at how their health dollars are spent.<\/p>\n

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\u201cEven though health insurance costs are the second-largest line item after payroll, CEOs don\u2019t really understand it or know anything about it,\u201d Cuban tells Fortune<\/em>. \u201cYou have employees that are more worried about whether their kids can get their medications paid for by the company insurance, or whether they\u2019re going to be able to get the surgery that they know they need and that the doctor recommends, but the insurance company is not approving.\u201d<\/p>\n

Cuban spoke with Fortune<\/em> on Monday after participating in a White House roundtable discussion<\/a> on lowering health care costs and bringing transparency to the role of prescription drug middlemen. He was joined by Dr. Alex Oshmyansky<\/a>, the CEO and cofounder of the Mark Cuban Cost Plus Drug Company<\/a>, a low-cost drug supplier. Before government leaders including Secretary of Health and Human Services Xavier Becerra<\/a> and Federal Trade Commission chair Lina Khan<\/a>, Cuban and Oshmyansky accused those middlemen companies, known as pharmacy benefit managers, or PBMs, of prioritizing profits over patients. <\/p>\n

These third parties act as intermediaries between health insurance providers and drug manufacturers. Cost Plus Drugs launched its online marketplace in early 2022, with the mission to buy drugs and sell them directly, and thereby more cheaply, to consumers. Oshmyansky announced at the White House that the Dallas-based company would begin manufacturing its own medications<\/a> this week.<\/p>\n

PBMs respond to Cuban\u2019s cost claims<\/h2>\n

The so-called \u201cbig three PBMs\u201d\u2014CVS Caremark, Cigna\u2019s Express Scripts, and UnitedHealth\u2019s Optum Rx\u2014controlled 80% of the market in 2022, according to the Drug Channels Institute<\/a>, and faced particular ire during the roundtable.\u00a0<\/p>\n

\u201cIf you\u2019re using a big three PBM, you are getting ripped off,\u201d Cuban tells Fortune<\/em>. \u201cPeriod. End of story.\u201d<\/p>\n

CVS Caremark spokesperson Phil Blando tells Fortune<\/em> in an email statement: \u201cEmployers, unions, health plans, and government programs work with CVS Caremark precisely because we deliver for them\u2014lower drug costs, better health outcomes, and broad pharmacy access. Through our True Cost, CostVantage and Choice Formulary initiatives, we are the leading agent of change, innovation, and transparency in the market.\u201d<\/p>\n

An Express Scripts representative tells Fortune<\/em> via email: \u201cOur clients choose to work with us because we offer broad flexibility and choice, the clinical expertise to ensure better health outcomes for the people they serve, and the negotiating muscle to secure savings across the thousands of brand, specialty, and generic medications available today, not just a handful of generic medications.\u201d<\/p>\n

Optum Rx didn\u2019t respond by deadline.<\/p>\n

The Pharmaceutical Care Management Association (PCMA)<\/a>, a trade organization representing PBMs, places blame on drug manufacturers. The Transparency<\/em> section of the PCMA website<\/a> contends there are right and wrong ways to be transparent about prescription prices. \u201cSpecific price concessions that allow drugmakers to realize they can discount less\u201d is one such move PCMA says increases costs.<\/p>\n

Neera Tanden<\/a>, domestic policy advisor to President Joe Biden<\/a>, said during Monday\u2019s roundtable that PBMs play a critical role in negotiating lower drug prices.<\/p>\n

\u201cWe have to remember that the original conception of PBMs is that they had the power to negotiate against Big Pharma,\u201d Tanden said. \u201cHowever, we have seen in current practices that that is a real challenge.\u201d<\/p>\n

The quest for PBM reform has bipartisan support in Congress. At the same time, pharmacy groups have criticized politicians for their lack of consensus and failure to pass what they view as meaningful change into law. In a statement Monday, the National Community Pharmacists Association<\/a> said, \u201cIf Congress fails to act this year, thousands of pharmacies could close, and millions of patients could be stranded.\u201d<\/p>\n

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