NOBODY IS SURE Mark Cuban is coming until he arrives. He rarely agrees to in-person interviews, and his team hasn’t responded to several requests for confirmation. When I park at the Mavericks’ office in Dallas at our scheduled time and introduce myself to a bewildered security guard, he explains that the building is undergoing renovations and Mr. C is not there. The guard deposits me in a conference room with a fancy bottle of water anyway.
The room is lit by four fluorescent circular fixtures overhead, which reflect off the white lacquered surface of a large conference table like ring lights off a pupil. A huge photograph of a beach with noxious- looking pink surf hangs on the far end of the room. Outside the space’s glass doors there is a giant photo of Cuban, who owns the Mavericks, grimacing in a suit. I’m staring at it when the actual Cuban appears, hurrying through the doors with one hand outstretched.
He is wearing sneakers, white Mavericks joggers, and a well-worn white T-shirt with a logo and TRACKS RECORDS, BLOOMINGTON, in emblazoned over one pec. (The owners of Tracks threw it at him last summer as he walked by the store while he was in town for a rugby reunion at his alma mater, Indiana University.) After he takes a seat, he places a bent plastic water bottle on the table, followed by a black wallet case containing his phone and a crowded key ring with a black Tesla key chain.
His eyebrows look groomed and his teeth are optic white and very straight, but his face doesn’t register as a rich guy’s. It looks increasingly Stallone-like the more you look at it, with the downturned outer corners of his eyes and a pummeled je ne sais quoi. “When I was like 18, I used to walk into places when Sylvester Stallone was brand-new—see how old I am—and people would start singing the theme song to Rocky,” he says. “I had the hair and all that.”
Mark Cuban has owned the Dallas Mavericks since 2000.
He joined Shark Tank as a judge in 2011.
Now 65, Cuban seems delighted to have something as universal as getting older to be self-deprecating about. He hates to be photographed, he explains, because he always thinks he looks older or out of shape. (The photograph hanging in the hallway was “not by choice,” he says glumly.) He likes to listen to Shark Tank, on which he has appeared as a judge since 2011, but he doesn’t like to watch it. “Just because I hate to see myself,” he says. “People always come up to me: ‘Oh, you look so much better in person.’ Or at least they used to.”
Besides the other hallmarks of midlife, he has the supplemental angst, however welcome, of his estimated $5.1 billion net worth. “I mean, I don’t want to look back when I’m 95 years old and say, ‘Okay, I made more money than this person, this person, and this person. But for what?’ My kids have more, and that’s a fear more than a benefit. There’s a point of diminishing returns where, you know—they’re 13, 16, and 19 now—they know they’re going to be fucking rich.” His biggest fear for them (after any health issues, he pointedly qualifies) is that they’ll turn out to be entitled jerks.
Cuban made his first millions from the 1990 sale of a software company he founded, MicroSolutions. He made his first billions nearly a decade later, from the sale of Broadcast.com, the ancestor of modern streaming, to Yahoo! This, he says, was when he stopped thinking of wealth as a scoreboard, like some guys—“primarily guys”—and began thinking of its impact on society. (That’s also when he bought the first of his two private jets.) Since then, he’s invested in hundreds of businesses and products, sometimes deciding to do so in real time on Shark Tank. Though the products on the show are occasionally frivolous, he has become a beacon of American ingenuity. His involvement is not charity, however. He is pragmatic and shrewd in his investments.
The same is true of Mark Cuban Cost Plus Drug Company, which he cofounded with a radiologist named Alex Oshmyansky and launched in January 2022. Cost Plus Drugs is an online pharmacy through which the two men are trying to make affordable pharmaceuticals more accessible for those who are underinsured or uninsured or who have high deductibles. Cuban believes it could be his most impactful undertaking.
He is, in part, thinking about his legacy. He grew up in Pittsburgh, which is dotted with monuments to Andrew Carnegie—libraries, museums, and a university. He describes how, in the 1900s, new immigrants had no access to knowledge and books. “That was his generation’s ability to be groundbreaking,” he says.
Pharmaceuticals are Cuban’s: Cost Plus Drugs is tapping into a massive and desperate demographic. A 2021 poll by Gallup and West Health estimated that 7 percent of Americans, or 23 million, were unable to pay for at least one prescription in the preceding three months, and 10 percent skipped doses of medications in the past year to save money. “I’m used to people walking up to me and saying hi, taking pictures,” Cuban says. “Now I’m getting people walking up to me and hugging me and crying, telling me stories about how their mom or they saved $1,000 or $1,200 or $2,000 or $5,000 a month.”
His and Oshmyansky’s business model is simple: Using digital pharmacy partners Truepill and HealthDyne, they ship generic drugs to customers. Generics have the same active ingredients, but they often cost significantly less than their branded counterparts. Whereas branded-drug manufacturers must charge more to cover the costs of developing, testing, and advertising new medications (those formulaic commercials you see, where someone steps out into a garden suddenly able to enjoy life after taking Gibralta, are critical tools for making customers feel comfortable introducing something new into their body), generic-drug manufacturers’ costs are comparatively low, partly because they only have to show that their product is as safe and effective as the original. To protect manufacturers from losing money on drug development, new drugs have patents and exclusivity periods; when they expire, generic makers pounce.
In 2020 alone, generics and biosimilars saved Americans $338 billion on drugs. But due to pharmaceuticals’ convoluted supply chain, generics still aren’t as cheap as they could be. Cuban and Oshmyansky decided to sell them with just a 15 percent markup, a $3 fee for labor (which will increase to $5 in September), and another $5 for shipping. In this way, Cuban told several publications in 2022, they would “fuck up the pharmacy industry.” But more than a year after Cost Plus Drugs’ debut, some noticed that, as one recent headline read, “Cuban hasn’t ‘f-ed up’ the pharma industry yet.” “Even Mark Cuban Can’t Fix This Broken Drug System,” read another.
Other cost-cutting operations have had little effect on the broader industry. But Cuban’s disruption goes beyond his business model. If he can use his influence and build enough trust to change how we think about and shop for medications, the shift could be tectonic. But are Americans too mired in the morass of our health-care system?
MARK CUBAN COST Plus Drug Company began with an email, as most things do for Cuban—including his days. “Generally, I get up in the morning, do emails,” he says. “Or lie in bed and do emails. Work out. Do emails. Eat. Do emails. Hang out with my kids if they want to hang out with me. Do emails. Eat. Do emails. Go to bed.”
Now he pulls out his phone and opens his in-box. He has received 181 emails since he last checked, before our interview.
“Let’s see if there’s anything decent,” he says, frowning as he dispatches a pitch into the entrepreneurial netherworld. There is suspiciously little junk mail, given that his email addresses are freely available to the public through a quick Google search. But his in-box still quivers with hopeful pitches, the subject lines full of affected confidence and casualness. It looks more like a Twitter feed. “It’s really easy because a lot of them are just bullshit. You know, I’ll get ‘billion-dollar idea.’ Ehhhhhhhh. I don’t want to hear about ‘ideas.’ ”
Cuban can certainly afford to outsource his communications, but, he says, it’s faster if he does it himself. He doesn’t take meetings or calls, so he holds court while doing things that don’t require his full attention.
In 2019, he got a cold email from Oshmyansky, who had already received some mentorship from start-up accelerator Y Combinator and had raised about $1 million for the nascent company, which he founded as a nonprofit in 2015. The radiologist tells me $1 million is paltry “in pharmaceutical dollars.” (Cuban will only say that starting a pharmaceutical company costs “a lot”—and that’s coming from a billionaire.)
Cuban had been interested in the health-care industry since 2017, when Republican legislation spurred significant discussion around repealing the Affordable Care Act. He had learned a bit about pharmaceuticals as he researched Medicare Part D, the optional drug coverage offered to Medicare qualifiers, but the cold email stirred him to understand the industry better. Oshmyansky, who was then working remotely from a pineapple farm in Hawaii that he and his wife had bought, was startled when Cuban replied within minutes.
Now the CEO of Cost Plus Drugs, Oshmyansky is unassuming. He is bald and bearded, with plastic-framed glasses, and he is as careful a speaker as Cuban is a brash one—the chaser to Cuban’s shot. But he’d been enraged and radicalized by the provocative decision of Martin Shkreli, then the CEO of Turing Pharmaceuticals, to inflate the cost of a drug called Daraprim, a lifesaving antiparasitic, from $13.50 to $750. (Shkreli was just one of many such profiteers, but his rattishness made him particularly notable. He may have done more to catalyze public awareness of and anger toward the pharmaceutical industry than anyone else.)
Mark Cuban and Alex Oshmyansky after touring their company’s Dallas manufacturing facility in March.
Cuban was impressed by Oshmyansky’s intelligence—“he’s a rocket scientist!”—and once he started learning more about the pharmaceutical industry, he began to see opportunities. “The entrepreneur took over,” he says, adding that he was especially drawn by the industry’s opacity, “a red flag for disruption.”
The two didn’t meet in person until a couple years after that initial missive, which is typical for Cuban. Instead, they made plans for the business over email. They would not accept insurance from major providers; they wanted to cut out the middlemen who crowd the traditional pharmaceutical supply chain, including big health plans. This way, they could offer drugs for common conditions—such as atorvastatin, the generic of Lipitor, used for high cholesterol—at a fraction of the cost. It’s $3.60 for a 30-count supply of 10mg pills; the same amount costs about $24 without insurance at my local CVS.
The cost differentials for more-expensive drugs can be even more dramatic. Thirty 400mg tablets of imatinib, the generic of the leukemia drug Gleevec, run $35.10 with Cost Plus Drugs; the same quantity costs around $800 without insurance at my local CVS. The CVS pharmacist who shared the price with me said it as if she were delivering a dire prognosis.
That a drug like imatinib can cost at least $750 more at one retailer than at another is the result of a convoluted, vertically integrated supply chain in which manufacturers, wholesalers, and pharmacies negotiate with health plans and third-party middlemen called pharmacy benefit managers, or PBMs. Though there are dozens of PBMs in the United States, three—CVS Caremark, Express Scripts, and OptumRx, all of which are closely integrated with insurance providers (Aetna, Cigna, and UnitedHealthcare, respectively)—now dominate the market. Drugmakers set the prices of their products astronomically high and then offer huge rebates to the PBMs and insurance companies that include those products in their coverage. But the rebates don’t do much to reduce artificially high drug costs for the consumer. They may even incentivize insurers to cover higher-cost branded drugs over generics that would be more affordable for those with higher deductibles, to secure fatter rebates.
Most consumers will stuff a CVS Caremark ID card into their wallet without a thought, not really knowing what it does but sensing that it would be bad to lose it. Yet slowly, to watchdogs if not necessarily the general public, PBMs are replacing drug corporations as the industry’s most visible villain. Leigh Purvis, director of health-care costs and access for AARP’s Public Policy Institute, believes this is due to intentional misdirection on the part of drugmakers who are eager to divert blame from their own pricing activity.
Both camps likely share the blame. Drug pricing is typically hidden in a black box, Purvis explains. “But the times that we have been able to get behind company pricing decisions, it really does seem to be [drug companies] trying to strike the balance between maximizing how much money they can make and making everyone really angry.” PBMs are not the only obstacle to consumer-friendly pricing, but to really fuck up the industry, Cuban needs the perfect enemy. PBMs are complex and shadowy enough to do the trick.
CUBAN CASTS PBMs as corrupt, enigmatic overlords. “It’s opaque because that’s how the biggest players in the PBM industry want it,” he wrote ominously in an email before we met, responding to a question about drug pricing. During our interview, as he walks me through the pharmaceutical supply chain—lining up his water bottle, phone, and keys plus my recorder as props to explain the vertical integration—he becomes emphatic as he describes how PBMs and large insurance companies regularly screw consumers. He leans in toward the conference table, getting more animated, blinking less.
“If Lauren or Mark has an expense they can’t afford, they’ll pay you, right?” he says of health plans. “But that isn’t what happens. They do all they can not to pay.” He sets off on a tirade, his intensity unbroken until the last stanza, when he sits back in his chair, resting his case. “You’re hoping your insurance company pays for it. But you’re terrified, because there’s a better chance it won’t. Because that’s the experience you and everybody you know have, right?”
In his email, each sentence broken into its own line, Cuban wrote that Cost Plus Drugs “was meant to be disruptive and a game changer” and described how “prior to Cost Plus there was zero cost transparency.”
This is, to some extent, rhetoric. Cost Plus Drugs’ model is not actually that disruptive: In the United States, there are similar cost-reducing pharmacies, which do not accept insurance and can thus set their own prices. Nor is its promise of transparency new. Independent pharmacies often use their unmuddled pricing as a selling point, and “transparency” has for the past decade been the industry’s premier buzzword, the “making the world a better place” of pharmaceutical start-ups. The prices Cost Plus Drugs offers aren’t even always the lowest on the market.
In February, for instance, a Kaiser Health News reporter used the drug discount aggregation site GoodRx to look up all the medications that Cost Plus Drugs provides that start with A, which resulted in a list of 211. The reporter found cheaper options than those at Cost Plus Drugs in 141 cases. Cuban suggested that his pricing, with the markup and the labor and shipping fees, might have skewed the costs and that bundling multiple drugs together under one shipping fee could be cheaper. (The publication also included one-time offers in its data.)
GoodRx is one of the few tools in customers’ arsenals for combating sky-high prices—when I told my local CVS pharmacist I was curious about the cost of drugs without insurance, she immediately recommended I check GoodRx—but its discounts shift kaleidoscopically, from day to day and market to market. And often, as was the case with imatinib, the $800 leukemia drug, the discounts still don’t make the cost of a regular prescription affordable for the consumer.
Cost Plus Drugs’ 15 percent markup is at least consistent, if somewhat arbitrary. When I ask Cuban how he and Oshmyansky agreed on that percentage, he reaches his right arm into the air above his head—yoink. “That means it seemed fair; it seemed enough for us to potentially make money but not too much.” It’s a business, not just another billionaire’s vanity project.
CUBAN’S COMPANY IS still not profitable, he tells me in a tone that implies profitability is a long way off. Both he and Oshmyansky demur when I ask how many users they have. “We’re redoing software, so I don’t have an exact count,” Cuban says. Oshmyansky says that they keep their company metrics confidential but adds, “It’s in the millions, I will say.”
Cuban told me in an email that the service is most heavily used by customers who are uninsured or underinsured or who have high deductibles. But Leigh Purvis of AARP suggests that Cost Plus Drugs still isn’t really hitting PBMs where it hurts: Customers have much greater difficulty affording brand-name drugs with no generic counterparts, and in those cases, PBMs and drugmakers have them over a barrel. “The reality is, where we’re seeing these incredible prices and incredible price trends is on the brand side,” she says, “and that’s where PBMs are playing a much heavier role.”
Still, Cost Plus Drugs, which now offers more than 1,000 drugs, is going all in on generics. In June, the company announced it would begin providing a biosimilar version of the rheumatoid-arthritis medication Humira, the top-selling pharmaceutical in the world. Cuban and Oshmyansky will also soon open a manufacturing facility in Deep Ellum, a Dallas neighborhood whose persnickety regulations required the company to install a mural, which they did happily, and open a sidewalk coffee shop, which they will do less happily. (“For $50 a month, you can subscribe to our coffee benefit manager,” Oshmyansky jokes—coffee will be $190 after discounts.) They’ll then produce their own generics, starting with those experiencing shortages, such as lidocaine.
The business is drawing new customers through alliances, including many with independent pharmacies, which enable Cost Plus Drugs users to pick up medications locally, and some with insurance companies, through which insured customers can spend less while still contributing to their deductibles. Many insurers, Cuban explains, have felt spurned or hassled by PBMs, too. “If we’re able to get any momentum to grow, and we get enough coverage, and we get enough customers, then hopefully, at some point in the future, they’ll be able to say to the PBMs, ‘We don’t need you.’ ” Cuban and Oshmyansky have even added some middlemen of their own to the company’s supply chain, albeit very selectively: They’ve partnered with several smaller “transparently minded and innovative” PBMs, allowing employers under their plans to offer Cost Plus Drugs medications to covered employees.
The end of PBMs is not exactly nigh, both because they are still so heavily involved in the sale of branded drugs and because operations like Cuban’s remain small relative to the size of the industry. If one of the three largest PBMs decided to put Cost Plus Drugs out of business, it would be easy. “They might say, ‘Okay, we’ll do cost plus 1 percent. Let’s see how long you can last with no business,’ ” he says. “But we’d cut back our costs. And I think what they would fail to realize at that point in time is that while certain customers would be cost-first, others would say, ‘I don’t trust these guys.’ ”
His is an optimistic view of the American consumer. It also reflects a deep trust in the Mark Cuban name. He often points out that Cost Plus Drugs is the first business he has ever put his name on. He says this is because he wanted customers and drugmakers to recognize his conviction in the business. It was also a critical move in an industry in which consumers’ trust is paramount: Medications do, after all, alter our very chemistry. A Johns Hopkins study published last winter found that in 2020, for 135 top-selling prescription drugs, the median promotional spending per drug was $20.9 million. In pharmaceuticals, exposure and a good name are everything.
Oshmyansky readily concedes that Osh’s Affordable Pharmaceuticals, his original proposed name, does not have the same clout as Mark Cuban Cost Plus Drug Company. “Him being that sort of Good Housekeeping seal of approval on the company is really the secret sauce,” Oshmyansky says. “That’s what’s allowed us to break out. Because a lot of what we’re doing, there’s nothing new to it. That’s one of the criticisms we get sometimes: Oh, there’s no new idea here. Correct. We’re basically just charging cash, which goes back to the 1850s. What we do is buy products, add a little margin, and then we resell them—outside of the ones we will be making ourselves soon. And ‘cost plus’ is not a new idea. But without our platform to let people know That’s an option that exists, I really think no one would have heard of it.”
Toward the end of my meeting with Cuban, I allude to the utility of his fame. “Yeah, because people know who I am, so I have the celebrity thing working. I have the money thing working,” he agrees in a tongue-in-cheek, yeah, yeah, heard it all before tone.
Cuban is preoccupied with not seeming like someone with an astronomical net worth. When he says that there are usually about 60 people in the fitness class he took earlier in the day, I remark that he must get plenty of attention when exercising with the civilians. “What’s that supposed to mean?” he asks, smiling. “No! What’s that supposed to mean?! I’ve been going to that gym for 30 years. So it’s no big deal. I play basketball there. Same people, same faces, same everything.”
His “just a regular guy” persona may be a shtick, but in the era of the Elusive Billionaire—the guy who hides on yachts and longs to eject himself into the cosmos—it’s a powerful one. Cuban makes himself as available to the public as a billionaire can, both by appearing on Shark Tank and by being extremely easy to reach. As he scrolls through his in-box, he shows me a few email chains from people who contacted him with political screeds that captured his curiosity. I can see that in some cases he went back and forth with these people for quite a while.
Consumers are craving transparency and accessibility. Cuban is doing jumping jacks with scores of people at the gym and patiently emailing with your conspiracy-theorist uncle. If the public is going to trust any billionaire with its medications, it’s probably going to be him.
This story originally appears in the September 2023 issue of Men’s Health.
Lauren Larson lives in Austin and is a features editor at Texas Monthly magazine.
Comments are closed.