Mark Cuban aims to lower prescription drug prices with online pharmacy 6/05/22 Transcript

Jeff: (00:00) People searching for cheaper alternatives to high priced prescription drugs have a new and perhaps unexpected option. It's an online pharmacy founded by billionaire businessman, Shark Tank star and Dallas Maverick's owner, Mark Cuban. His new direct to consumer company cost plus drugs offers more than 100 generic medications at discounted prices. And Mark Cuban joins us now. Thanks for being with us. Mark Cuban: (00:25) Thanks for having me on, Jeff. Jeff: (00:26) So you have solved a problem that politicians have struggled with for decades. And it strikes me that one of the ways you were able to do it was by approaching it as a business problem to tackle, and less so as a political issue. Mark Cuban: (00:40) Yeah, as an entrepreneur, anytime I see an industry that's been run the same way for decades, if not generations, and it's been obfuscated to the point where there's no transparency, and you have associations trying to protect that opaqueness, to me, that's an opportunity. And that's exactly what we saw with the prescription drug industry. And by adding transparency and our approach at cost plus drugs, which is, we'll show you our actual cost. We'll mark it up 15%. We'll add $3 pharmacy handling fee, and $5 shipping, and that's all you'll ever pay. That simplification and transparency has really had an impact. Jeff: (01:19) So what was the genesis of this company? As I understand it, there was a doctor with a business plan who reached out to you with a cold email. First of all, I'm not even sure how he would get your email, but he did, and you were receptive to it. Mark Cuban: (01:32) Very much. So, Dr. Oshmyansky, who's just the definition of rocket scientist. He's an MD, he's a mathematician, you name name it, he's got that after his name, reached out to me with the concept of doing specialty pharmacies, where we'll be able to take drugs that were in high demand, but were in short supply and reduce those prices. And I was like, "That's a great idea, but let's see if we can make it more mainstream." And so we spent the next three plus years going through, and getting all our I dotted and Ts crossed in terms of registrations and certifications and got to the point where we were able to go live with costplusdrugs.com on January 19th of this year. Jeff: (02:15) You could devote your time, money, and attention to any number of things. Why focus on this? Mark Cuban: (02:20) Because it's just wrong that people have to choose between eating, their rent, and taking their medications or buying their medications in United States of America in 2022, it's just wrong. And it was obvious there was not going to be a political solution. And even the attempts that are being discussed, don't really get to the heart of the problem. Setting a price, or doing a discount against other prices. All these numbers work from artificially set, retail and wholesale prices. The reality is the only number that matters is cost. Mark Cuban: (02:53) What can we, as, as the retailer or the distributor buy it for, and how low can we sell it? So we decided to take the exact opposite approach that politicians have been taking. And to me, once we realized that we could do this, I had to do it. And by the way, we're past 100 drugs now, we just crossed... Added another 90 yesterday. So we're past 700. And while those first 700 plus are generic, we'll be adding, branded name drugs as well over the course of the year. And by the end of this year, we hope to be past 2,000 drugs. Jeff: (03:27) What about insulin and EpiPens? Are those going to be available? Mark Cuban: (03:30) We're working on it. I can't give you a date. It could be six months, it could be a year, it could be two years, but the reality, Jeff, is that the branded name manufacturers that we're starting to work with, see us really as an opportunity to regain control of pricing. Four of the biggest companies in the country now are vertically integrated so that they have pharmacy benefit managers, insurance companies, and huge retail pharmacy among other companies. And that vertical integration truly allows them to distort pricing. And we're able to work around them by not working through them. Jeff: (04:04) So why hasn't this been tried before? Mark Cuban: (04:07) Basically, it has been tried before, but typically what happens, entrepreneurs like myself will build up the companies, the equivalent of a costplusdrugs.com, and then the big PBM, the big pharmacy benefit managers or the big insurance companies, they'll buy them. But I've been incredibly blessed in that my next dollar is not going to change my life, but my ability to invest in costplusdrugs.com is an ability to change millions of lives in this country, if not tens of millions over the next two years. And if there's a mission that I'd like to accomplish, that's it. Jeff: (04:43) What other seemingly intractable problems do you think can be solved through an entrepreneurial approach? Mark Cuban: (04:51) Look, healthcare in general, there's a law that says hospitals have got to show their pricing for their top procedure, all their pricing. And there are hospitals who are willing to take the $100 a day fine rather than show their pricing. And the fact that it's only $100 a day shows you the seriousness of it. So healthcare across the board is ripe for disruption. Jeff: (05:14) I want to ask you about your potential political future. You have been an outspoken voice in the last two elections, 2016, 2020, an outspoken anti-Trump voice. If he's to run again in 2024, everything suggests that he will, would that incentivize you to run? Mark Cuban: (05:32) No, no, because one of the things I try to teach my kid is you don't have to be the leader to be a leader. And I think with Cost Plus Drugs and what we're doing here, I can have more of an impact on the pricing of medication, which is a huge problem across this country than I could as president of the United States. And I think we're already taking those first steps and demonstrating it. Mark Cuban: (05:53) And if we can get through this over the next 2, 3, 4, 5 years and add all the drugs that are insanely priced, we'll go on to the next thing. And I think that type of impact is greater than the president of the United States can have. And I don't mean to say that from an arrogant perspective, but just as a business person, there are industries that are important to us as citizens of this country that I think can still be disruptive. Jeff: (06:16) Mark Cuban, great speaking with you. Thanks so much for your time. Mark Cuban: (06:19) Thank you. We really appreciate it, Jeff.