Mark Cuban on Why Patients Don’t Trust Their Medical Bills

People trust their doctor. They do not trust the bill they get afterward.

In this clip from our episode “Why Healthcare Prices Are Like Fight Club”, host John Driscoll and Mark Cuban, Co-Founder of Cost Plus Drugs, break down why pricing transparency, not just lower prices, was the real reason Cost Plus Drugs earned the trust of patients across the country.

Listen to the full episode here

🎙️⚕️ABOUT MARK CUBAN
Mark Cuban is a self-made billionaire entrepreneur known for his early tech ventures like Broadcast.com, his ownership of the Dallas Mavericks, and his role as a "Shark" on ABC's Shark Tank, investing in numerous startups and expanding into media, film, and healthcare, always championing innovation and disruption. 

In 2019, Mark co-founded Costplusdrugs.com with the aim of lowering generic drug prices for end consumers in the U.S., starting the company after receiving an email from a radiologist named Alex Oshmyansky, who pitched the idea of an online-based pharmacy. He often refers to Cost Plus Drugs as a critique and disruptor of the US health care system, including offering transparent, direct-to-consumer pricing and reducing the role of pharmacy benefit managers. 

Mark has earned a number of accolades including being named to the Texas Business Hall of Fame, the Horatio Alger Award, the SXSW Hall of Fame, Ernst and Young Entrepreneur of the Year, and GQ Man of the Year.

🎙️⚕️ABOUT CARETALK
CareTalk is a weekly podcast that provides an incisive, no B.S. view of the US healthcare industry. Join co-hosts John Driscoll (President U.S. Healthcare and EVP, Walgreens Boots Alliance) and David Williams (President, Health Business Group) as they debate the latest in US healthcare news, business and policy.

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Transcript

John: 0:06

I just remember that early discovery phase when you were talking to, I think I talked to you once or twice, you talked to a lot of my friends, and the patience and the care with which you got into the details of how our crazy healthcare system, but you could have gone after anything. What intrigued you about going after drugs and drug margins and, you know, what's turned what right now is probably one out of every five healthcare dollars that, that insurers cover is, is now drugs?

Mark Cuban: 0:34

It was the path of least resistance, to be candid. Um, you know, nobody knew what the price of a medication was. The stories, um, of hearing people at the pharmacy counters turning around and not being able to get their drugs are tragic. And so when I looked, it was very self-evident that nobody knew not only the price, but the cost of a medication, and nobody trusted, trusted the economic side of pharmacy or medical. And so it just made natural sense to me a- as a, an entrepreneur that if I showed my cost for a medication and I showed my markup and let- had it at 15%, not only would we be less expensive, but we would be trusted, and that's the key that was missing. People don't trust the economic side of their healthcare. They trust their doctor, but they don't trust the bill that they're gonna get or what it's going to cost. And by, you know, having that ultimate transparency of cost and markup, that was unique and that would allow us to not only be less expensive, but to be trusted, and that's what got us there.

John: 1:35

And the vast majority of Americans assume that they're getting a fair price at the pharmacy. What are they missing?

Mark Cuban: 1:44

They're missing, you know, they trust their pharmacist and assume that the pharmacist is gonna do the right thing for them. What they're missing is there are these enormous conglomerates that dominate the economics of not just pharmacy, but all of healthcare. And in pharmacy specific, they're called pharmacy benefit managers, and they effectively control, you know, 85% of the formularies, which what determines, um, what healthcare, um, members, what drugs are available to them and at what price. And with that control, they've been able to dominate the, the pharmacy market and really define pricing.

John: 2:23

Well, and I, I think the other thing is that it's all done in the shadows. You know, one of the- Yeah … the amazing things that you've been able to do is really talk about true pricing. I think the MD Anderson study recently said that you can, you know, that it, it can often cost $50 a copay for a generic prescription that they can, people can get for $5 on the cost- Cost Plus Plus pharmacy. I mean, it was just mind-blowing.

Mark Cuban: 2:48

Yeah, it's crazy. Yeah, it's crazy. I mean, whether it's what Medicare spends on drugs, whether it's insurance companies. I was just talking to an insurance company, and they literally don't know what their actual net price is because of all the rebates and fees. And where the industry is really turned upside down when it comes to patients starts with distribution