Mark Cuban Was Asked Why He Wanted To Tackle Big Pharma – 'Because Everybody Thinks It's F***ed Up, You Know … And They're Right'

Mark Cuban didn't hold back during his conversation with Fortune's Andrew Nusca at the annual Fortune Brainstorm Tech dinner in Las Vegas on Jan. 6, 2025. Known for shaking up industries, Cuban focused on the mess that is the pharmaceutical system and how his company, Cost Plus Drugs, is trying to clean it up.

"Because everybody thinks it's f***ed up, you know and they're right," Cuban said when asked why he decided to tackle the pharmaceutical industry. "There's nobody who looks at the health care system or the pharmaceutical industry and says, ‘Wow, that's well-run, that's just the way we want it, it's great for us, we love participating in it.'"

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Cuban said it all started with a cold email from Dr. Alex Oshmyansky, who pitched the idea of a pharmacy that could manufacture generic drugs facing shortages. Cuban was intrigued. "It was right around the time that the pharma bro was going to jail and I started digging in and looking at, you know, what he had done. And this guy just basically bought, you know, a whole year's worth of manufacturing for a drug called Daraprim, a generic drug and then just jacked up the price. And then as I started digging in more, it was obvious this was not an efficient market. It was very inefficient. It was very opaque."

The solution, Cuban decided, was transparency. "If we create a company and we, A) limited our margins and B) published all of our pricing and our price list, then maybe we can have an impact." And so, Cost Plus Drugs was born in January 2022 with just 111 medications and a website. The company has since grown to 2,500 drugs and Cuban says it's saving people millions – and forcing industry giants to follow suit.

The concept is simple. Cost Plus Drugs uses a flat 15% markup, adds $5 for the pharmacy fee and another $5 for shipping. That's it. Cuban offered a specific example: "A 90-day prescription for generic Cialis (Tadalafil) costs about $14. Compare that to a big bag of M&Ms, which costs $19. You decide what you want next to your bed."

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Cuban also shared a story about a friend in need of Droxidopa, a drug that was costing $10,000 every three months. "We checked into it. We got it. Instead of $10,000 every three months, it was $180 every three months. And now we got it down to about $90 every three months."

One of the biggest obstacles Cuban has encountered are pharmacy benefit managers (PBMs), which he says were initially designed to negotiate better drug prices but have since become profit-driven monopolies. "They got greedy. So the original goal of pharmacy benefit managers made perfect sense. You have an organization that works with many companies and insurance companies and says, ‘You know what? Let me aggregate all the demand you have for prescriptions and I'm gonna go to the pharmaceutical manufacturers and negotiate for you.' Makes perfect sense. But then, these pharmacy benefit managers wanted to grow more, so they bought the insurance companies or the insurance companies. And then they bought retail pharmacies. And then they bought specialty pharmacies. And now they're even trying to do some things with manufacturers so they're completely vertically integrated."

Cost Plus Drugs has made its entire price list public to fight back. "Companies now can go down the list when they can see their costs or, more importantly, their employees can say, ‘Wait, my coinsurance or my copay is $40 or $50 or $100 if it's an expensive drug, but I can buy it from Cost Plus Drugs for $15. How is that even possible?'"

Cuban's ultimate goal is clear: to fix a broken system. "We're here to make an impact," he said. Judging by the changes Cost Plus Drugs has already inspired, he's well on his way.

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