Billionaire entrepreneur and investor Mark Cuban believes the U.S. healthcare system is fundamentally broken — and he isn’t holding back in saying so.
“No one looks at the financial side of healthcare and says, ‘This is how it should work,’” Cuban said on a recent episode of the Equity podcast. “When you visit the doctor and get a prescription, you have no idea what the cost will be. You don’t know if you’ll even be able to afford it.”
The former Shark Tank star and Dallas Mavericks minority owner points to the central issue: drug prices are largely set by pharmacy benefit managers (PBMs) — middlemen who control much of the prescription market. According to Cuban, their opaque pricing models are designed to confuse patients and maximize profits.
That frustration led him to launch Cost Plus Drugs in 2022, a company built to disrupt the industry by making drug pricing transparent and affordable. “They price to market; we price based on cost,” Cuban explained. The results can be staggering — a chemotherapy drug that might cost thousands at a traditional pharmacy could be sold for just $21 through Cost Plus Drugs.
The model is simple but revolutionary: medications are sold at the manufacturer’s cost, plus a 15% markup, a $5 pharmacy fee, and shipping. Cuban added that his company is now expanding to allow customers to pick up prescriptions at local pharmacies, further widening access.
Why U.S. Drug Prices Are So High
Pharmaceutical companies often argue that inflated prices are necessary to fund the billions required for research and development. But critics disagree. A 2021 study showed that revenue from just the top 20 best-selling drugs was more than enough to cover R&D costs, leaving billions in profit.
Cuban also pointed to artificial shortages as another driver of skyrocketing prices. “Believe it or not, even today, drugs like pediatric cancer treatments, Pitocin, sterile water, and many others suddenly go into short supply. And why? Because manufacturers manipulate shortages to drive prices higher,” he said.
Although proving intent is difficult, it’s well documented that prices surge during shortages, making life-saving drugs even harder to access.
Building His Own Factory
To fight back, Cuban invested in a robotics-driven manufacturing facility in Dallas. “We built a factory where we can produce a new drug in four hours and ship it directly to hospitals,” he said. This gives Cost Plus Drugs the ability to address shortages quickly while also cutting costs.
While shipping medications directly to patients has slim profit margins, Cuban explained that manufacturing and supply chain innovation provide a path toward sustainability and growth.
Refusing to Play by Industry Rules
Cuban insists his company isn’t just about lowering prices — it’s about changing the game entirely. “Everyone told me you can’t fight the big players — the insurers and PBMs,” he said. “But I decided, I’m not going to work with them. Their system isn’t aligned with patients’ best interests.”
He contrasted his approach with Amazon’s, noting that even the tech giant has partnered with PBMs through Amazon Pharmacy, a move he says leaves them “beholden” to the very middlemen he’s avoiding.
His advice for founders aiming to disrupt massive industries? Independence. “Don’t depend on them. If I were 25 and starting out, I probably would have gone along with PBMs because that’s where the money is. But healthcare is just arbitrage — people trying to skim a small piece of a $5 trillion market. If you want to win, don’t play their game.”
The Founder’s Advantage
Cuban closed with a piece of wisdom he’s carried since his early days: “When you run with the elephants, there are the quick and the dead. You’ve got to be quick, lean, and adaptable. You’ve got to zig and zag, always improving. Big incumbents can’t react as fast — they’re tied to protecting legacy businesses. That’s the founder’s edge.”
