Two years after launching a company with a few dozen discounted generics, Mark Cuban's Cost Plus Drugs now offers more than 2,000 medications, partners with hundreds of independent and grocery chain pharmacies, and manufactures its own drugs.
The idea for Cost Plus Drugs started with a cold email. Around 2020, then-radiologist and pharmaceutical company founder Alex Oshmyansky, MD, PhD, emailed Mr. Cuban, a billionaire investor and "Shark Tank" panelist. The two emailed for months about disrupting an industry that allowed a drug company to increase medicine prices more than 4,000% overnight. They also talked about circumventing pharmacy benefit managers — the drug pricing middlemen business that's dominated by six companies.
Dr. Oshmyansky and Mr. Cuban founded Mark Cuban Cost Plus Drug Co. with the plan to sell pharmaceuticals at their manufacturing price, plus a 15% markup, $3 pharmacy labor fee and free shipping. (The company now has a $5 labor fee and a $5 shipping fee.)
In January 2022, Cost Plus Drugs became an online pharmacy with a few dozen generics for sale. The company steadily increased its portfolio while trimming prices. In the two years since, Cost Plus Drugs has ended plans to sell insulin and build its own PBM, instead partnering with PBMs not part of the six that control 96% of the market.
"People always ask, well why didn't somebody do this before? The reality is there's so much money there, it's hard not to be greedy," Mr. Cuban said on an NPR podcast in early 2022. "If you get to any scale at all, those PBMs will start throwing money at you and saying, 'Look, just play the game.'"
He said he's not interested in the game.
"I could make a fortune from this," Mr. Cuban said in late 2021. "But I won't. I've got enough money. I'd rather f— up the drug industry in every way possible."
Cost Plus Drugs has also penned collaborations and partnerships with about a dozen other companies, from a male fertility business to other mail-order pharmacies. Thousands of independent and grocery chain pharmacies have signed on to the Team Cuban Card, which enables patients to fill prescriptions for the manufacturing cost, plus a 15% markup, $8 dispensing fee and $1 processing fee.
Other big pharmacy players, including CVS, UnitedHealth Group, Express Scripts and Blue Shield of California, are taking notice of the growing demand for transparent drug prices.
In 2024, the pharmaceutical startup unveiled a marketplace specifically for hospitals and healthcare providers, and it secured its 21st brand-name drug and first health system partnership. Cost Plus Drugs also completed its $11 million drug manufacturing facility in Dallas — about a year after it planned to open — and the company said it will soon begin producing injectables in shortage.