Mark Cuban is taking on America's $5 trillion healthcare industry with a radical transparency play. His startup Cost Plus Drugs is selling generic medications at cost plus 15% markup, undercutting traditional pharmacies by thousands of dollars and refusing to work with the pharmacy benefit managers that control drug pricing nationwide.
Mark Cuban just declared war on the most entrenched industry in America, and he's not playing by anyone else's rules. The billionaire entrepreneur's Cost Plus Drugs is systematically dismantling the $5 trillion healthcare machine with a weapon the industry never saw coming: radical price transparency. Cuban told TechCrunch's Equity podcast this week that drug prices are "opaque by design," and his company is pulling back the curtain on an industry built on information asymmetry. The numbers are staggering—a generic chemotherapy drug that costs thousands at traditional pharmacies sells for just $21 through Cost Plus Drugs. That's not a typo; that's the power of cutting out the middlemen who've been skimming profits for decades. Cuban's model strips away the complexity that pharmacy benefit managers use to justify their existence. Instead of the labyrinthine pricing schemes that leave patients guessing at checkout, Cost Plus Drugs uses a simple formula: manufacturer cost plus 15% markup plus $5 pharmacy fee plus shipping. "They price to market; we price based off of cost," Cuban explained, drawing a line in the sand that separates his approach from every other player in the space. The strategy goes deeper than just undercutting competitors. Cuban has built a fully automated manufacturing facility in Dallas that can "turn over a new drug in four hours and ship it out to hospitals." This isn't just about selling existing medications cheaper—he's attacking the artificial scarcity that drives up prices for critical drugs like pediatric cancer treatments and Pitocin. While Cuban stopped short of directly accusing manufacturers of intentional profiteering, federal data confirms that drug prices spike significantly during shortages. His robotics-driven factory is designed to eliminate these bottlenecks entirely. The incumbent response has been predictable. "Everybody was saying you can't fight these big companies, the insurance carriers, the PBMs," Cuban said. "I'm like, 'Well, I just won't work with them.'" This refusal to participate in the traditional system puts Cost Plus Drugs at odds with even Amazon, which Cuban notes is still "beholden to PBMs" through its pharmacy partnership. Even tech giants with infinite resources can't escape the gravitational pull of existing healthcare economics. Cuban's manufacturing play addresses both sides of the profitability equation. While direct-to-consumer drug sales operate on "razor-thin margins," the manufacturing operation provides higher-margin revenue that helps the overall business work toward profitability. It's also another vector for disrupting supply chains that have remained largely unchanged for decades. The broader implications extend far beyond prescription drugs. Cuban's approach offers a playbook for founders trying to disrupt entrenched industries: refuse to play by the incumbents' rules. "Don't be dependent on them," he advised entrepreneurs. "All of healthcare is basically an arbitrage. How can I just get a small percentage of a $5 trillion market through technology, pricing, whatever it may be?" His final piece of advice channels classic startup wisdom with a healthcare twist. "When you run with the elephants, there's the quick and the dead," Cuban said. "You've got to be quick, or you're going to be dead. They've got to protect their legacy businesses, but they can't move as quickly. They can't react as quickly, and so that's always going to give the founder an edge." The is playing out in real-time across America's pharmacies, and Cuban is betting that transparency and speed will triumph over complexity and incumbency.