How Mark Cuban’s Cost Plus Drugs Is Transforming Prescription Drug Pricing
Transparent pricing and no middlemen combine to make generics truly affordable.
Prescription drug affordability is a longstanding issue for millions of Americans. From high out-of-pocket costs to opaque pricing structures, access to essential medications can often mean difficult financial trade-offs. Billionaire entrepreneur Mark Cuban has stepped into this space, aiming to disrupt the industry and provide real, tangible savings for consumers through his Cost Plus Drugs company. But how does this model work, and what impact is it having on the U.S. pharmacy landscape?
What Is Mark Cuban Cost Plus Drugs?
Mark Cuban Cost Plus Drug Company (often called Cost Plus Drugs) is a public benefit corporation founded in 2022 with the explicit mission to lower prescription drug prices. Cuban, along with Dr. Alex Oshmyansky—a radiologist and the company’s co-founder and CEO—designed the company to strip away the traditional layers of intermediaries, especially pharmacy benefit managers (PBMs), whose complex rebate practices often lead to artificially high prices for consumers.
The company offers a cost-plus pricing model: it acquires generic medications at cost, adds a fixed 15% markup, a $5 pharmacy service fee, and a standard $5 shipping charge. The result is a transparent, direct-to-consumer drug purchasing process with no hidden fees, no middlemen, and no insurance required.
Why Prescription Drug Prices Are So High in the U.S.
High prescription prices are not simply a function of expensive manufacturing. The United States leads the world in per capita drug spending, with prices for many commonly used medications—especially generics—remaining much higher than in other developed nations. The reasons include:
- Lack of price negotiation for many drugs under U.S. law
- Patent protections and exclusivity for brand-name drugs
- Opaque, multi-layered pharmacy benefit manager systems facilitating rebates, manufacturer deals, and administrative fees
- No regulatory requirement for pharmacies or PBMs to disclose actual acquisition costs or retail markups
By targeting the middlemen—particularly PBMs, who extract profits throughout the pharmaceutical supply chain—Cuban’s approach directly addresses one of the biggest drivers of marked-up retail drug costs.
How Does Cost Plus Drugs Work?
The service operates as a fully online pharmacy. Here’s an overview of the process:
- Search for Medications: Consumers browse available generics via the Cost Plus Drugs website by typing in the name of their medication.
- See Transparent Pricing: Each drug’s cost is listed openly, broken down into the company’s acquisition price, the 15% markup, pharmacy fee, and shipping.
- Upload Prescription: Customers upload their prescription, or the company contacts their doctor for validation.
- Fulfillment & Delivery: Medications are dispensed by accredited partner pharmacies, including Truepill Pharmacy, and shipped directly to the consumer’s door, nationwide.
What others are reading
The process is designed for radical transparency: what you see is what you pay.
What Sets Cost Plus Drugs Apart?
- Simple Pricing: A fixed 15% markup plus two $5 flat fees. No hidden costs.
- No Insurance Required: Anyone with a valid prescription can purchase, regardless of insurance status.
- Direct-to-Consumer Model: Medications are shipped directly from the company’s mail-order pharmacy to patients across all 50 states.
- Vertically Integrated Supply Chain: Cost Plus both manufactures its own medications and partners with wholesalers for increased efficiency and affordability.
- Public Benefit Mission: As a public benefit corporation, it emphasizes social impact over profit-maximization.
What Drugs Are Available?
Initially launching with a few dozen generics, Cost Plus Drugs has rapidly expanded. As of late 2023, it offers access to over 2,200 generic medications—covering antibiotics, blood pressure medicines, mental health treatments, cancer therapies, and more. The company continues to work toward adding more commonly used drugs, single-source brands, and certain biologics.
Is It Really the Cheapest Option?
While Cost Plus Drugs often delivers substantial savings—sometimes even 50% to 90% lower than typical retail pharmacy pricing—experts note that it may not always offer the absolute lowest cost for every medication or market situation. Prices for some generics can occasionally be found lower at major retailers, certain membership clubs, or discount card programs.
The main advantage, however, is unmatched pricing transparency. Consumers can see exactly why each drug costs what it does, and there’s no fine print.
| Feature | Cost Plus Drugs | Traditional Pharmacies |
|---|---|---|
| Pricing Transparency | Full (itemized, public) | Low (hidden negotiations, rebates) |
| Insurance Needed | No | Yes (for most discounts) |
| Middlemen (e.g., PBMs) | None | Yes |
| Fees | 15% markup + pharmacy & shipping | Varies, often not disclosed |
| Drug Selection | 2,000+ generics (expanding) | Varies; often broader for all brands |
Who Can Use Cost Plus Drugs?
- Any U.S. Resident with a valid prescription from a licensed healthcare provider.
- People with no insurance, high deductible plans, or limited drug coverage.
- Employers and Managed Care Organizations can integrate Cost Plus Drugs into their pharmacy benefit for workforce or plan member savings.
The process works outside insurance, but also offers optional integration for employers and pharmacy networks seeking to make medications more affordable for employees or communities.
Affiliating with Local Pharmacies: The Network Model
Cost Plus Drugs isn’t just an online disruptor. It is also growing a national affiliate pharmacy network. Local independent pharmacies can join the Cost Plus Drugs Marketplace and buy thousands of medications at transparent prices. This provides:
- Access to more than 4,000 medications at set acquisition cost
- Fair, predictable reimbursement for pharmacies
- Equitable access to drugs for consumers in underserved areas
- Opportunities for community pharmacists to devote time to critical clinical services (like medication management and point-of-care testing) instead of navigating convoluted pricing and coupon systems
This model is intended to empower independent pharmacies to compete with large national chains, increase profit predictability, and free up pharmacists to provide more meaningful patient care.
Challenges and Limitations
While the Cost Plus model offers breakthrough pricing and transparency, there are some important caveats:
- Formulary Limitations: The selection is focused on generics, not most brand-name drugs (though specialty brands and biologics are being added).
- No Clinical Services: Cost Plus does not provide direct clinical pharmacy services, such as medication counseling or pharmacovigilance, relying instead on local and partner pharmacists for those needs.
- Availability: Although rapidly expanding, not all medications are available yet through their network.
- Pricing Not Always The Lowest: For some medications, alternative sources may, on occasion, offer a lower cost, particularly when insurance or discount cards are in use.
The Broader Impact: Challenging Pharmacy Benefit Managers
At the heart of Cost Plus Drugs is a mission to disrupt pharmacy benefit managers (PBMs). PBMs manage prescription drug benefits for insurers and employers, often controlling which drugs are available at what price. Critics claim PBMs negotiate secretive rebates and sometimes increase consumer prices in the process. Mark Cuban’s public and aggressive stance has shone a light on these controversial practices, prompting greater regulatory and consumer scrutiny.
The company’s straightforward, transparent model calls into question the necessity—and ethics—of such opaque industry structures. The hope of Cost Plus Drugs and its advocates is to inspire or force wider reform across the industry.
Success Stories: Real-World Savings
Many early users of Cost Plus Drugs report significant out-of-pocket savings. Examples include cancer patients managing ongoing medication costs, families accessing generic treatments for chronic diseases, and small businesses seeking to lower employee benefit expenses. In numerous cases, patients found their total Cost Plus cost, including shipping, was lower than their co-pay or deductible under traditional insurance plans.
- Generic cancer therapy: Retail cost of $9,657 dropped to $47 per month through Cost Plus Drugs (example cited in media interviews).
- Cholesterol or hypertension medications: Many generics for as little as $3 per month.
These anecdotes demonstrate how market-disruptive pricing, when paired with transparent operations, can have life-changing impact for consumers otherwise priced out of needed treatment.
Future Directions
Cost Plus Drugs continues to expand its offering of generics and, increasingly, is negotiating with manufacturers to add specialty and branded medications. It is also building a state-of-the-art manufacturing facility in Dallas, Texas, to address drug shortages and increase supply chain resilience. Ongoing outreach to partner with employers, managed care organizations, and local pharmacies is designed to scale the program for nationwide health system transformation.
Frequently Asked Questions (FAQs)
How do I use Cost Plus Drugs?
Visit the Cost Plus Drugs website, search for your medication, and follow the prompts to upload your prescription and place an order. Medications are shipped directly to your home.
Can I use my insurance with Cost Plus Drugs?
No, this service operates entirely outside of insurance. All purchases are out-of-pocket, but in most cases prices are much lower than typical pharmacy retail or insurance co-pays. Some employer plans may allow integration with Cost Plus as an alternative benefit.
Are only generic drugs available?
Currently, most medications available are FDA-approved generics, but the company is working to include selective single-source brands and specialty biologic drugs over time.
Do I need a prescription?
Yes. You must have a prescription from a licensed healthcare provider. The company can help coordinate prescription transfer from your doctor or existing pharmacy.
Who is behind Cost Plus Drugs?
Cost Plus Drugs was co-founded by Dr. Alex Oshmyansky (CEO) and billionaire entrepreneur Mark Cuban. Cuban’s backing and visibility have helped accelerate growth and draw media and policy attention to pharmacy industry reform efforts.
Key Takeaways
- Cost Plus Drugs, founded by Mark Cuban and Alex Oshmyansky, is transforming the pharmacy landscape with transparent, fixed-margin pricing and a public benefit mission.
- The company bypasses traditional pharmacy benefit managers, selling directly to consumers and, increasingly, through employer and local pharmacy networks.
- Savings can be substantial, and the process is simple, transparent, and accessible to all Americans with a prescription.
- Expansion into branded drugs, specialty medications, and local partnerships is ongoing as the company seeks to force lasting change across the healthcare system.
References
- https://en.wikipedia.org/wiki/Cost_Plus_Drugs
- https://www.markcubancostplusdrugcompany.com
- https://www.hendersonbrothers.com/exploring-the-full-picture-of-mark-cubans-cost-plus-pharmacy/
- https://www.drugtopics.com/view/mark-cuban-cost-plus-drugs-affiliate-pharmacy-network-aims-to-support-independent-pharmacies
- https://ldi.upenn.edu/our-work/research-updates/mark-cuban-explains-his-battle-against-pharmacy-benefit-managers/
- https://gradstudies.musc.edu/about/blog/2024/09/easier-pill-to-swallow
- https://www.trillianthealth.com/strategy/counterpoint/why-the-mark-cuban-cost-plus-drug-company-is-a-boon-for-the-pharmaceutical-industry
- https://jamanetwork.com/journals/jama-health-forum/fullarticle/2819897
- https://www.statnews.com/2024/07/29/mark-cuban-cost-plus-drug-company-bigger-impact-drug-shortages-not-drug-costs/
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