MARK CUBAN WAS CONFIDENT HE wouldn't be recognized in Boston Common. This was early June, and it happened to be the day of the Boston Dyke March, billed as an "anti-capitalist intersectional gender liberation" event. On our walk over to the park, people had bum-rushed the billionaire, angling for an autograph or selfie. Basketball fans on the street lit up at the sight of himthe minority owner of the Dallas Mavericks. But as we strolled the 50-acre stretch of green, considered the oldest public park in the US, Cuban the capitalist assured me that this crowd couldn't be less interested in him.
"Mark Cubannnnn!" a young woman screeched just then. She hurried over. Her friends joined. They were infectiously joyful, wearing strips of rainbow fabric fashioned into skirts, and they wanted a selfie. Cuban obliged, beaming like a dad.
Cuban, now 66, is at a turning point. Late last year he announced that the upcoming season of ABC's Shark Tank, the reality show that catapulted him to fame, would be his last. He also sold off his controlling stake in the Mavs. Was the tech entrepreneur and investor... slowing down?
The suggestion is offensive to him. He simply has a new obsession. In 2018, Cuban received an email that, to him, smelled like blood. A 33-year-old radiologist named Alex Oshmyansky was cold-pitching a pharmaceutical startup. He wanted to sell generic drugs for about as much as they cost to make or buy. Cuban was intrigued. He invested $250,000.
Within two years Cuban had invested so much that he owned the company. In January 2022 they began selling products as Mark Cuban Cost Plus Drugs. The name references, well, Mark Cuban, but also simple algebra: the base price of the drug, plus a 15 percent markup, plus a $5 pharmacy service fee, plus $5 in shipping. The company ships around 2,500 drugs, including ones for epilepsy, diabetes, and birth control, to consumers and pharmacies across the US.
What excited Cuban was the way Oshmyansky wanted to subvert the middlemen in America's famously contorted health system. Pharmacy benefit managers, or PBMs, sit between drugmakers, insurers, patients, and pharmacies. They're largely responsible for setting all kinds of details: what drugs a patient's insurance will cover, how much they cost, what slice a pharmacy gets. They claim to be money-saving heroes. But as a recent New York Times investigation found, PBMS can charge drugmakers and employers extra fees, effectively jack up prices for patients, and contribute to driving independent drug stores out of business.
When I meet Cuban for breakfast at a posh Boston hotel, the kind of place with soft jazz and gas fireplaces going even on the muggiest days, he's on a tear about PBMs. Their trade groups demonize drugmakers as badly as "the Republicans demonized Hillary Clinton," he claims. Cuban says he's not driven by any personal experience with health care. He simply saw a chance to rip into a dysfunctional industry.
Cuban is also outspoken about tech platforms and politics. He's an active Xer and doesn't hesitate to take on Elon Musk. He has alleged that Musk manipulates the platform's algorithm, and he took it in stride when Musk referred to him as a poop emoji. At the time of our breakfast, President Joe Biden was still on the ticket, and Cuban had stern messaging for his campaign team: Loosen up your stance on taxing crypto or lose the election. When we caught up a second time, in August, Cuban said he's impressed by the way Democratic presidential nominee Kamala Harris is punching back at the Trump campaign's aggressive rhetoric, and the "Bring Your Dad to Work Day" energy that Tim Walz exudes. And he likes that the duo might draw in moderate voters and tamp down some of the chaos the US has endured in the past eight years.
Although, Cuban himself seems to thrive in chaos.
Lauren Goode: Things have been changing for you lately. You're leaving Shark Tank. You sold your majority stake in the Dallas Mavericks. Are you going through a midlife crisis?
Mark Cuban: No, no, no. The exact opposite. It's more platforming for the next step. I don't look at myself and think, "I'm a man of a certain age, I've got to change what I'm doing." No. It's more like, I like to disrupt things. I like to play the game. I like to compete in business, and Cost Plus Drugs could be the biggest thing I've ever done.
Why?
If I said to you, Lauren, you could change health care in this country, would you do it?
I mean, yes, given recent experience with doctor's appointments. It's all opaque. I have no idea what kind of bill I'm going to get.
Nobody has any idea. Going back to 2017, the Republicans were talking about getting rid of the Affordable Care Act. I talked to various people who had no idea what they were going to do for health care. So I said, "OK, let me dig into it." I started working on various plans. I worked with the Rand Corporation to come up with some ideas.
Then, in 2018, I got a cold email from Alex. He said he wanted to do a pharmacy for drugs that are generic and in short supply, because there are various drugs, like ones for pediatric cancers, that people can't get, and it's insane and someone needs to make them.
I'm like, "That's a great idea, but you're thinking too small." This was around the time that Pharma Bro was going to jail for all his shit. [Martin Shkreli, who was convicted of securities fraud, had a company that bought the marketing rights for an antiparasitic drug and raised the price of a pill from $13.50 to $750.] I said to Alex, "Why can't we also buy out a year's supply?" He said it would cost us about $250,000. I'm like, "Are you kidding me? Only $250,000? Great." The problem is, you can't buy it, because somebody already locked it up.
In terms of intellectual property?
No. They bought the entire year's supply. [The waiter comes and offers coffee.] Can I get an oatmeal with just raisins? Nothing else.
That's very specific, just raisins.
Yeah. I have no willpower, and if it's in front of me, it's gone.
Speaking of gone... so someone locked up the drug.
Right, they went to the manufacturer and got a de facto exclusive. Because if there's only 100 or so people that use it in a given year, they can jack up the price. I thought it was fucked up that could even happen. I started digging further.
The biggest problem isn't the care itself, and it's not the pharma side. The pharma manufacturers are perceived as bad guys because they're the ones with the patents, but they're not the bad guys, generally.
What do you mean by that?
Because your insurance company, whoever it may be, uses a PBM, a pharmacy benefit manager. The PBM has negotiated with a pharmacy what the reimbursement rate is. Except they basically said, "Here's what we're going to reimburse you." [His Apple Watch buzzes.]
You can go ahead and check that.
It's my son. [Speaking into watch.] We'll do a late lunch. Don't worry about it. Go ahead and have fun. [Back to the interview.] He's playing basketball.
Nice.
So, with the PBMs, there's no negotiation. Particularly for the small independent pharmacies, they take it or leave it. And: "Oh, by the way, you are not allowed to say anything about this contract at all." Period. The number one rule of health care contracts is you don't talk about health care contracts. So instead of breaking even, the pharmacy might lose $20 to $30 on every brand subscription they're doing. The idea is, they'll make it up on toilet paper and other stuff. Well, that doesn't work.
And the drug manufacturer?
The PBMs also negotiate with the manufacturers, but they lose out as well. They have no idea who is using their medications, what the demographics are, what the adherence is. So the PBM will offer to do analysis for them, and then sell the manufacturer access to the data for their own drug.
Then the trade association for the PBM says, "Look at the bad guys!" It's so convoluted and opaque.
[Greg Lopes, a spokesperson for the Pharmaceutical Care Management Association, a trade group, told WIRED, "PBMs have a proven track record of securing savings on prescription drugs for patients." He added that drug companies "are solely responsible for setting and raising prescription drug prices."]
OK, so you saw how these entities bought up drugs and controlled the market. Why didn't you, a billionaire, take that approach with other drugs? Why didn't you say, I'm going to buy all the insulin in America?
Well, we looked at manufacturing insulin. We developed our own glargine [synthetic] insulin, and I spent $5 million or more, I don't even know. But that was right when Biden made sure Medicare plans were covering insulin for up to a $35 copay. So it made no sense to do it at that point.
You told Texas Monthly that you don't care if you don't make a fortune off of this. Is that still true?
I want to make it so it's self-sustained. I don't want to subsidize it the whole time. But I don't need to make money.
Do you see Cost Plus Drugs as altruistic?
No. I see it as fun with a huge impact. Altruism is like, "Great, I feel good because I'm helping people. I gave money and da-da-da-da-da." Disrupting an industry that everybody hates, that's fun. I'm getting emails and letters, if not every week, every two weeks, saying, "Oh my God, my grandma's alive." I just got a note from someone who wrote, "You saved me $15,000 a year on my cancer medication. I would be dead if it weren't for you."
What's interesting is-and I'm not going to say midlife crisis-it does seem like you're at least thinking about your legacy now.
But if I was 25 and this opportunity came up-
You'd still do it.
I'd do the same thing. The difference is I would probably try to make as much money as I could because I'm only 25 and I'm trying to establish myself. Now I don't need the money. My next dollar is not going to change my kids' kids' kids' kids' life.
But it does take a lot of time and emotional energy. It takes a lot of work to learn all this in a few years, enough to turn a whole industry around. That's what people are most surprised about. I walk in the door and I'm telling the CEO of a major company, "You're an idiot because I've studied your business and here's what's wrong." [The waiter arrives with our food.]
Thank you so much. See, the other part of this is I track everything I eat in MyFitnessPal. I think my streak is up to 3,600 days.
How big do you want Cost Plus Drugs to be? How are you thinking about scale?
We'll sell every drug we're legally allowed to sell. But scale isn't so much about size, it's about disruption. If I do my job, that means we've disintermediated those PBMs.
What about the part of your business that manufactures drugs, will you grow that?
We manufacture drugs that are on the FDA shortage list and are injectables. There's an FDA drug-shortage list that hospitals can't access but the companies can, so they jack up the price.
How are you approaching GLP-1 drugs, like Ozempic and Wegovy?
OK, so that's an interesting question, because GLP-1s are on the shortage list. As long as the patents are valid, there's a rule that says if it's on the shortage list, you're allowed to make it. So companies can manufacture them, and that's why you see some companies starting to sell them at a lower price now.
That's also why you see some GLP-1 makers invest huge amounts to expand their capacity, because they don't want to be on the shortage list. It's unlikely those drugs will stay on the shortage list for long, so we don't make them.
I have to imagine manufacturing your own drugs from scratch is like making silicon chips-a multiyear, multibillion-dollar investment to spin up your fabs.
Same thing. It's multiyear. It's not multibillion, but it's all robotically driven. Right now our capacity is about 2 million vials a year.
How long are you going to stay with this?
Until it's fixed. I want to say I fixed the health care system. Can I do it? Maybe. Is it 100 percent? No. Is it greater than1 percent? Greater than zero? Yes.
On the Trevor Noah podcast, you talked about how if you'd done something else in life you'd probably still be successful because of your work ethic and curiosity. But you've also gotten incredibly lucky.
And I'll be incredibly lucky here too.
Do you think we should have billionaires?
Yeah, of course.
Why?
Everything's relative. "Millionaire" used to be inconceivable. When I became a billionaire, a company with a $5 billion or $10 billion valuation was huge. Now there are trillion-dollar companies. And I guarantee you, those people are going to be a lot smarter than the government.
The billionaires are?
The 1 percent who figure it out and are able to create something that's of value, yes. There's Atlas Shrugged for a reason. "Who is John Galt?" was a saying for a reason. There's a point of diminishing returns. Those people in a position to make something or build something, whatever it may be, aren't going to all of a sudden say, "Well, it's OK that I can't be rewarded for that."
As an entrepreneur, I can create things and get rewarded and reinvest in other companies, like I did with Cost Plus Drugs. So while the money seems obscene in a lot of respectsand I understand that completely, I couldn't even spend the money that I have without it I couldn't invest in the things that I invest in, the hundreds of entrepreneurs that I have backed. I couldn't do Cost Plus Drugs.
Do you think that billionaires should be taxed more than they are now?
Not on unearned income or on capital gains.
The majority of Americans support a wealth tax on the very rich. It's one of the few things that people are aligned on.
If there's a net-worth tax there would be no Cost Plus Drugs, because I wouldn't know what my tax is next year.
Could you pay your taxes either way? You shared a tweet in April that showed you owed $275,900,000 in taxes this year.
I couldn't. Because who carries that much cash?
Are you still a libertarian?
Not so much anymore.
Why is that?
Things change. This country has 110 million more people than it did in 1980.
And there are all these policies that have been put in place.
Would I like less government? Yeah, I would like less government. Would I like a smarter government? Even more so. Would I love to see government as a service so fewer people have to do the same bureaucratic work over and over again? Do I think AI will be smarter than 99 percent of these people doing the rote bureaucratic work? Yes, I do. Do I wish that we had anybody who understood that and was trying to propose it and implement it? Yes. That's part of being a libertarian.
But you can't go from where we are to there, in a direct line. It's impossible.
And you've said you're not going to run for office.
No, hell no.
Why not?
Who would put themselves through that? I can do more from the private sector. You can't be president and change health care. You've got to get Congress behind you, and this, and that. As an entrepreneur, you can c...
"Mark Cubannnnn!" a young woman screeched just then. She hurried over. Her friends joined. They were infectiously joyful, wearing strips of rainbow fabric fashioned into skirts, and they wanted a selfie. Cuban obliged, beaming like a dad.
Cuban, now 66, is at a turning point. Late last year he announced that the upcoming season of ABC's Shark Tank, the reality show that catapulted him to fame, would be his last. He also sold off his controlling stake in the Mavs. Was the tech entrepreneur and investor... slowing down?
The suggestion is offensive to him. He simply has a new obsession. In 2018, Cuban received an email that, to him, smelled like blood. A 33-year-old radiologist named Alex Oshmyansky was cold-pitching a pharmaceutical startup. He wanted to sell generic drugs for about as much as they cost to make or buy. Cuban was intrigued. He invested $250,000.
Within two years Cuban had invested so much that he owned the company. In January 2022 they began selling products as Mark Cuban Cost Plus Drugs. The name references, well, Mark Cuban, but also simple algebra: the base price of the drug, plus a 15 percent markup, plus a $5 pharmacy service fee, plus $5 in shipping. The company ships around 2,500 drugs, including ones for epilepsy, diabetes, and birth control, to consumers and pharmacies across the US.
What excited Cuban was the way Oshmyansky wanted to subvert the middlemen in America's famously contorted health system. Pharmacy benefit managers, or PBMs, sit between drugmakers, insurers, patients, and pharmacies. They're largely responsible for setting all kinds of details: what drugs a patient's insurance will cover, how much they cost, what slice a pharmacy gets. They claim to be money-saving heroes. But as a recent New York Times investigation found, PBMS can charge drugmakers and employers extra fees, effectively jack up prices for patients, and contribute to driving independent drug stores out of business.
When I meet Cuban for breakfast at a posh Boston hotel, the kind of place with soft jazz and gas fireplaces going even on the muggiest days, he's on a tear about PBMs. Their trade groups demonize drugmakers as badly as "the Republicans demonized Hillary Clinton," he claims. Cuban says he's not driven by any personal experience with health care. He simply saw a chance to rip into a dysfunctional industry.
Cuban is also outspoken about tech platforms and politics. He's an active Xer and doesn't hesitate to take on Elon Musk. He has alleged that Musk manipulates the platform's algorithm, and he took it in stride when Musk referred to him as a poop emoji. At the time of our breakfast, President Joe Biden was still on the ticket, and Cuban had stern messaging for his campaign team: Loosen up your stance on taxing crypto or lose the election. When we caught up a second time, in August, Cuban said he's impressed by the way Democratic presidential nominee Kamala Harris is punching back at the Trump campaign's aggressive rhetoric, and the "Bring Your Dad to Work Day" energy that Tim Walz exudes. And he likes that the duo might draw in moderate voters and tamp down some of the chaos the US has endured in the past eight years.
Although, Cuban himself seems to thrive in chaos.
Lauren Goode: Things have been changing for you lately. You're leaving Shark Tank. You sold your majority stake in the Dallas Mavericks. Are you going through a midlife crisis?
Mark Cuban: No, no, no. The exact opposite. It's more platforming for the next step. I don't look at myself and think, "I'm a man of a certain age, I've got to change what I'm doing." No. It's more like, I like to disrupt things. I like to play the game. I like to compete in business, and Cost Plus Drugs could be the biggest thing I've ever done.
Why?
If I said to you, Lauren, you could change health care in this country, would you do it?
I mean, yes, given recent experience with doctor's appointments. It's all opaque. I have no idea what kind of bill I'm going to get.
Nobody has any idea. Going back to 2017, the Republicans were talking about getting rid of the Affordable Care Act. I talked to various people who had no idea what they were going to do for health care. So I said, "OK, let me dig into it." I started working on various plans. I worked with the Rand Corporation to come up with some ideas.
Then, in 2018, I got a cold email from Alex. He said he wanted to do a pharmacy for drugs that are generic and in short supply, because there are various drugs, like ones for pediatric cancers, that people can't get, and it's insane and someone needs to make them.
I'm like, "That's a great idea, but you're thinking too small." This was around the time that Pharma Bro was going to jail for all his shit. [Martin Shkreli, who was convicted of securities fraud, had a company that bought the marketing rights for an antiparasitic drug and raised the price of a pill from $13.50 to $750.] I said to Alex, "Why can't we also buy out a year's supply?" He said it would cost us about $250,000. I'm like, "Are you kidding me? Only $250,000? Great." The problem is, you can't buy it, because somebody already locked it up.
In terms of intellectual property?
No. They bought the entire year's supply. [The waiter comes and offers coffee.] Can I get an oatmeal with just raisins? Nothing else.
That's very specific, just raisins.
Yeah. I have no willpower, and if it's in front of me, it's gone.
Speaking of gone... so someone locked up the drug.
Right, they went to the manufacturer and got a de facto exclusive. Because if there's only 100 or so people that use it in a given year, they can jack up the price. I thought it was fucked up that could even happen. I started digging further.
The biggest problem isn't the care itself, and it's not the pharma side. The pharma manufacturers are perceived as bad guys because they're the ones with the patents, but they're not the bad guys, generally.
What do you mean by that?
Because your insurance company, whoever it may be, uses a PBM, a pharmacy benefit manager. The PBM has negotiated with a pharmacy what the reimbursement rate is. Except they basically said, "Here's what we're going to reimburse you." [His Apple Watch buzzes.]
You can go ahead and check that.
It's my son. [Speaking into watch.] We'll do a late lunch. Don't worry about it. Go ahead and have fun. [Back to the interview.] He's playing basketball.
Nice.
So, with the PBMs, there's no negotiation. Particularly for the small independent pharmacies, they take it or leave it. And: "Oh, by the way, you are not allowed to say anything about this contract at all." Period. The number one rule of health care contracts is you don't talk about health care contracts. So instead of breaking even, the pharmacy might lose $20 to $30 on every brand subscription they're doing. The idea is, they'll make it up on toilet paper and other stuff. Well, that doesn't work.
And the drug manufacturer?
The PBMs also negotiate with the manufacturers, but they lose out as well. They have no idea who is using their medications, what the demographics are, what the adherence is. So the PBM will offer to do analysis for them, and then sell the manufacturer access to the data for their own drug.
Then the trade association for the PBM says, "Look at the bad guys!" It's so convoluted and opaque.
[Greg Lopes, a spokesperson for the Pharmaceutical Care Management Association, a trade group, told WIRED, "PBMs have a proven track record of securing savings on prescription drugs for patients." He added that drug companies "are solely responsible for setting and raising prescription drug prices."]
OK, so you saw how these entities bought up drugs and controlled the market. Why didn't you, a billionaire, take that approach with other drugs? Why didn't you say, I'm going to buy all the insulin in America?
Well, we looked at manufacturing insulin. We developed our own glargine [synthetic] insulin, and I spent $5 million or more, I don't even know. But that was right when Biden made sure Medicare plans were covering insulin for up to a $35 copay. So it made no sense to do it at that point.
You told Texas Monthly that you don't care if you don't make a fortune off of this. Is that still true?
I want to make it so it's self-sustained. I don't want to subsidize it the whole time. But I don't need to make money.
Do you see Cost Plus Drugs as altruistic?
No. I see it as fun with a huge impact. Altruism is like, "Great, I feel good because I'm helping people. I gave money and da-da-da-da-da." Disrupting an industry that everybody hates, that's fun. I'm getting emails and letters, if not every week, every two weeks, saying, "Oh my God, my grandma's alive." I just got a note from someone who wrote, "You saved me $15,000 a year on my cancer medication. I would be dead if it weren't for you."
What's interesting is-and I'm not going to say midlife crisis-it does seem like you're at least thinking about your legacy now.
But if I was 25 and this opportunity came up-
You'd still do it.
I'd do the same thing. The difference is I would probably try to make as much money as I could because I'm only 25 and I'm trying to establish myself. Now I don't need the money. My next dollar is not going to change my kids' kids' kids' kids' life.
But it does take a lot of time and emotional energy. It takes a lot of work to learn all this in a few years, enough to turn a whole industry around. That's what people are most surprised about. I walk in the door and I'm telling the CEO of a major company, "You're an idiot because I've studied your business and here's what's wrong." [The waiter arrives with our food.]
Thank you so much. See, the other part of this is I track everything I eat in MyFitnessPal. I think my streak is up to 3,600 days.
How big do you want Cost Plus Drugs to be? How are you thinking about scale?
We'll sell every drug we're legally allowed to sell. But scale isn't so much about size, it's about disruption. If I do my job, that means we've disintermediated those PBMs.
What about the part of your business that manufactures drugs, will you grow that?
We manufacture drugs that are on the FDA shortage list and are injectables. There's an FDA drug-shortage list that hospitals can't access but the companies can, so they jack up the price.
How are you approaching GLP-1 drugs, like Ozempic and Wegovy?
OK, so that's an interesting question, because GLP-1s are on the shortage list. As long as the patents are valid, there's a rule that says if it's on the shortage list, you're allowed to make it. So companies can manufacture them, and that's why you see some companies starting to sell them at a lower price now.
That's also why you see some GLP-1 makers invest huge amounts to expand their capacity, because they don't want to be on the shortage list. It's unlikely those drugs will stay on the shortage list for long, so we don't make them.
I have to imagine manufacturing your own drugs from scratch is like making silicon chips-a multiyear, multibillion-dollar investment to spin up your fabs.
Same thing. It's multiyear. It's not multibillion, but it's all robotically driven. Right now our capacity is about 2 million vials a year.
How long are you going to stay with this?
Until it's fixed. I want to say I fixed the health care system. Can I do it? Maybe. Is it 100 percent? No. Is it greater than1 percent? Greater than zero? Yes.
On the Trevor Noah podcast, you talked about how if you'd done something else in life you'd probably still be successful because of your work ethic and curiosity. But you've also gotten incredibly lucky.
And I'll be incredibly lucky here too.
Do you think we should have billionaires?
Yeah, of course.
Why?
Everything's relative. "Millionaire" used to be inconceivable. When I became a billionaire, a company with a $5 billion or $10 billion valuation was huge. Now there are trillion-dollar companies. And I guarantee you, those people are going to be a lot smarter than the government.
The billionaires are?
The 1 percent who figure it out and are able to create something that's of value, yes. There's Atlas Shrugged for a reason. "Who is John Galt?" was a saying for a reason. There's a point of diminishing returns. Those people in a position to make something or build something, whatever it may be, aren't going to all of a sudden say, "Well, it's OK that I can't be rewarded for that."
As an entrepreneur, I can create things and get rewarded and reinvest in other companies, like I did with Cost Plus Drugs. So while the money seems obscene in a lot of respectsand I understand that completely, I couldn't even spend the money that I have without it I couldn't invest in the things that I invest in, the hundreds of entrepreneurs that I have backed. I couldn't do Cost Plus Drugs.
Do you think that billionaires should be taxed more than they are now?
Not on unearned income or on capital gains.
The majority of Americans support a wealth tax on the very rich. It's one of the few things that people are aligned on.
If there's a net-worth tax there would be no Cost Plus Drugs, because I wouldn't know what my tax is next year.
Could you pay your taxes either way? You shared a tweet in April that showed you owed $275,900,000 in taxes this year.
I couldn't. Because who carries that much cash?
Are you still a libertarian?
Not so much anymore.
Why is that?
Things change. This country has 110 million more people than it did in 1980.
And there are all these policies that have been put in place.
Would I like less government? Yeah, I would like less government. Would I like a smarter government? Even more so. Would I love to see government as a service so fewer people have to do the same bureaucratic work over and over again? Do I think AI will be smarter than 99 percent of these people doing the rote bureaucratic work? Yes, I do. Do I wish that we had anybody who understood that and was trying to propose it and implement it? Yes. That's part of being a libertarian.
But you can't go from where we are to there, in a direct line. It's impossible.
And you've said you're not going to run for office.
No, hell no.
Why not?
Who would put themselves through that? I can do more from the private sector. You can't be president and change health care. You've got to get Congress behind you, and this, and that. As an entrepreneur, you can c...
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WIRED (Digital) - 1 Issue, November - December 2024