In a virtual fireside chat on Tuesday with Scripta Insights CEO Eric Levin, Mark Cuban spoke passionately about the potential of simplified contracting and cash pay. Scripta is a partner of Cuban’s company, Cost Plus Drugs.
The conversation comes on the heels of growing buzz around TrumpRx, a website announced by the administration earlier this fall. Its goal is to bring down the price of medications by being transparent around price. “It’s kind of a portal for best prices,” Cuban said. Cost Plus operates on the same philosophy, sharing its own published price list with TrumpRx to expand reach.
“It’s about just getting the best price possible to sponsors and patients,” Cuban said during the fireside chat. The biggest challenge right now, in Cuban’s view, is educating executives about this as an alternative to the traditional pharmacy benefit manager (PBM) negotiation model. “With cash-pay options, you can save money,” Cuban said. “And the lowest-hanging fruit are biosimilars.”
Though a few states already require this, Cuban also recommended that employers mandate that cash payments be applied to a member’s deductible. “If you’re self-insured, it’s your contract. You get to write it the way you want,” Cuban said. This is something many brokers do not have incentive to recommend, he said, because it doesn’t keep them in good standing with PBMs.
“If your consultant truly was good at their job, this already would’ve been built into the contract. You should question your consultant,” Cuban added, highlighting that they often get kickbacks for making certain recommendations.
Cuban spent a good portion of the fireside chat bashing traditional PBMs, though intentionally without calling out any specific players. If PBMs are really as great at negotiating prices as they claim, Cuban said, they have no reason not to be transparent with their data.
But in reality, for branded drugs, PBMs don’t negotiate—they “auction off their formularies,” per Cuban. The goal is to get as much upside for themselves as possible.
Cuban pointed to the complex ownership network of PBMs as an example of their effort to obfuscate what he repeatedly called a rip-off.
“You’re part of a multi-hundred billion-dollar company. Why do you need to create this subsidiary? Because that’s how they game the system,” Cuban said.
Last month, Fierce Healthcare published an investigation into alternative funding programs. These middlemen may recommend to self-insured employers certain coverage decisions for high-cost drugs that impact access. But patients are often afraid to speak out, for fear of employer retaliation. When asked by Fierce Healthcare what employers can do to be more mindful of member disruptions, Cuban recommended that employers seek out Cost Plus Drugs.
In particular, he referred to Cost Plus Wellness, a free platform that helps self-insured employers contract directly with providers. With over 9,200 providers on the platform today, Cost Plus Wellness also publishes its contracts online. Cost Plus pays providers a bit more than cash price and takes care of prior authorizations.
“The missing piece in all of this is, and our hope, is to be able to create a provider network where all the contracts are published,” Cuban said. “When you want to start to get away from the insurance companies, if you’re self-insured, the hard part is putting together the network.”
Cost Plus Drugs is a relatively small operation. The entire company is about 70 people, Cuban said, with three people managing the company’s benefits.
This work shouldn’t be hard, he argued. Employers just need to simplify their contracting. There’s no need for formulary tiers or therapeutic classes, per Cuban. GenAI bots can also be a powerful way to spot inconsistencies or bad deals in a contract. “I’m like, where are we getting screwed?” Cuban said of his own genAI prompts.
Overall, Cuban believes the direct-to-consumer movement will bring down prices over time. With the ACA subsidy expiring, and premiums on those plans going up exponentially, those who can’t afford them will be doing cash-pay for everything going forward, Cuban noted.
Historically, the lack of alternatives for affording care has been unique to the healthcare industry. If you need a college loan and then drop out, banks still loan the money. But if you’re in a car accident and can’t afford your deductible, “we do nothing for you,” Cuban said. “To me, that’s the opportunity.”