U.S. prescription drug pricing is opaque and largely determined by pharmacy benefit managers (PBMs), creating unpredictable costs for patients. Cost Plus Drugs, launched in 2022, sells medications directly to consumers using a transparent formula: manufacturer cost plus a 15% markup, a $5 pharmacy fee, and shipping, with an option for local pharmacy pickup. This model can produce dramatically lower prices for some generics, including chemotherapy drugs. The U.S. remains one of few high-income countries without government-negotiated drug prices, and the industry argues high profits are needed to fund costly drug development.
No one looks at the financial side of healthcare and says, 'This is the way it should work,' Cuban said on this week's episode of the Equity podcast. 'When you go to the doctor and you get a prescription . . . you have no idea what the cost to you is going to be. You don't know if you can afford it or not.' The former 'Shark Tank' host and minority owner of the Dallas Mavericks basketball team explained the root of the problem: most drug prices today are set by pharmacy benefit managers (PBMs), or third parties that manage prescription drug programs. Cuban said drug prices are opaque by design.
That's exactly why he launched Cost Plus Drugs in 2022 - to pull back the curtain on drug pricing, bring down costs to the average consumer, and disrupt the traditional pharmacy industry. 'They price to market; we price based off of cost,' he said. The difference is shocking. For example, a generic chemotherapy drug might cost thousands over the counter at a pharmacy, whereas it might cost '$21 from Cost Plus Drugs,' Cuban said.
As its name suggests, Cost Plus Drugs sells meds directly to consumers at a transparent price - the manufacturer's cost, plus a 15% markup, plus a $5 pharmacy fee, plus shipping. 'And we're adding the ability to pick it up in a local pharmacy,' Cuban added. To understand why Cuban's model is disruptive, it helps to know why drugs cost so much in the first place. The industry has defended its practice of overcharging for medication in the U.S. - which is one of the only high-income countries whose government doesn't set or negotiate drug prices - by arguing that without the incentive of high profits, companies couldn't invest the billions of dollars needed to bring new
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