# Mark Cuban's call. A wake-up call for employers.

Source: https://ethosbenefits.com/insights/mark-cuban-wake-up-call-for-employers
Type: Insight
Topic: Pharmacy and PBMs
Author: Donovan Ryckis, Founder and CEO
Reviewed by: Patrick Ansara, Partner and Director of Client Operations
Publisher: Ethos Benefits
Published: 2023-12-28
Last updated: 2026-11-03
Cite as: "Mark Cuban's call," Ethos Benefits, https://ethosbenefits.com/insights/mark-cuban-wake-up-call-for-employers, updated 2026-11-03.

**Summary:** Mark Cuban says self-funded employers' sickest workers fund their drug rebates. What his Cost Plus Drug Company shows employers about pharmacy pricing.

## Key takeaways

- Mark Cuban has said that, as an employer, he realized his sickest employees were funding the rebate checks his company received from its pharmacy benefit.
- The Mark Cuban Cost Plus Drug Company, which opened in January 2022, prices each drug at its cost plus a 15% markup and a flat pharmacy labor fee, shown on every listing.
- Employers can apply the same test to their own plan by asking what they pay per drug, who keeps the difference and where rebates come from.

Employers have been hearing benefits consultants call for transparent, fair and affordable pharmacy benefits for years, and many have brushed the message aside. If the consultants haven't moved you, maybe Mark Cuban will.

## Why should employers listen to Mark Cuban?

Employers should listen because Cuban's story is likely their own. Cuban, known for "Shark Tank" and his years as owner of the Dallas Mavericks, turned his attention to the rising and hidden cost of prescription drugs. He has said in interviews that the turning point came from his own company: as an employer, he realized his sickest employees were the ones funding the rebate checks his company received.

That is not a business quirk. It is a human problem. In many plans, an employee's cost sharing is based on a drug's list price, while the rebate that lowers the net price flows back to the PBM and the plan. The people who need the most medication pay the most, and the savings show up somewhere else.

## What did Cuban do about it?

Cuban opened the Mark Cuban Cost Plus Drug Company's online pharmacy in January 2022 with a plain message: drug pricing should be fair, visible and accessible, not hidden. Employers can see in that response what transparency looks like in practice.

Cuban's approach is about business reform, but it is also about caring for people. His voice adds weight to what many consultants have been saying: the current system needs to change. For employers working through the decisions behind their health plan, his message is a reminder that every pharmacy contract has employees on the other end of it. If the logical case for transparency didn't land, perhaps Cuban's human one will.

## How does Cost Plus compare with a PBM?

Cost Plus publishes every part of a drug's price, while much of what a traditional PBM earns never shows up on the plan's invoice. Employers can check the Cost Plus model on any drug the company sells. Each listing breaks the price into three parts:

| Part of the price | What it is |
|---|---|
| Manufacturer cost | What Cost Plus pays for the drug |
| Markup | 15% of the drug cost |
| Pharmacy labor fee | A set charge per prescription, currently $5.00 |

Shipping is added at checkout. The labor fee started at $3 and went to $5 in September 2023, which the company attributed to rising pharmacy labor costs.

Compare that with how a traditional PBM is often paid. The FTC's July 2024 interim staff report found that the three largest PBMs processed nearly 80% of US prescriptions in 2023, and its January 2025 report found that pharmacies owned by those PBMs earned more than $7.3 billion above estimated acquisition cost on specialty generic drugs from 2017 to 2022. [Spread pricing](https://ethosbenefits.com/benefits-101/pbm-spread-pricing), rebate retention and pharmacy steering are hard to see from a plan sponsor's chair. A published cost, markup and fee puts everything on the table, which is why Cuban's model has drawn so much employer attention.

Cost Plus is not the right answer for every drug or every plan. The point for employers is the standard it sets: you should be able to see what a drug costs and what everyone in the chain keeps. We look at how that same concentration plays out across health care in [the downside of vertical integration](https://ethosbenefits.com/insights/vertical-integration-in-healthcare).

## What should you ask your PBM?

Employers can put Cuban's test to their own plan with a few direct questions:

1. **What does our plan pay for each drug, and what was the pharmacy paid?** The difference is spread, and you should know whether your contract allows it.
2. **Where do our rebates come from, and who keeps them?** Ask how rebates are defined in your contract and whether any are held by a group purchasing organization or other affiliate.
3. **How is employee cost sharing calculated?** If it is based on list price, your sickest employees may be paying more than the drug actually costs the plan.
4. **Can we get drug-level claims data?** Without it, you can't check any of the other answers.

Ethos Benefits reviews PBM contracts and pharmacy spend through its [pharmacy and PBM service](https://ethosbenefits.com/services/pharmacy-pbm). For more conversations about pharmacy benefits, listen to the [Business of Benefits podcast](https://ethosbenefits.com/podcast).

## Let's make a commitment together.

The push for transparency in health benefits is more than a professional recommendation. It is a human necessity. Cuban, a businessman many admire for his directness, has made that need hard to ignore. When it comes to the health of your employees, transparency is the only policy that puts them first.

## On the podcast

- [Self-Funded Health Insurance, PBMs and Reference-Based Pricing: The People's Picks: our most-watched moments](https://ethosbenefits.com/podcast/self-funded-health-insurance-most-watched-moments), The Business of Benefits, Episode 84
- [PBM Rebates and Who Really Pays: Mark Cuban](https://ethosbenefits.com/podcast/pbm-rebates-mark-cuban), The Business of Benefits, Episode 75

## Frequently asked questions

### What is Mark Cuban's point about rebates and employers?

Cuban has said that when a self-funded employer receives drug rebate checks, the money traces back to the prescriptions of its sickest employees, who often pay cost sharing based on a drug's higher list price. He argues employers should look at who funds those checks before treating them as savings.

### What is cost-plus drug pricing?

Cost-plus pricing sets a drug's price at what the pharmacy paid for it, plus a fixed markup and a flat fee, and shows each part. At Mark Cuban Cost Plus Drug Company, each listing shows the drug cost, a 15% markup and a pharmacy labor fee, currently $5.00, with shipping added at checkout. The labor fee was $3 at launch.

### Does Cost Plus Drugs take insurance?

The online pharmacy launched in January 2022 as a cash-pay pharmacy that did not accept insurance. Employers who want to use it through their plan should ask their PBM or pharmacy administrator whether it can be added to the network, how claims would be handled and how member cost sharing would work.

### Do drug rebates lower what employees pay?

Often not directly. In many plans, an employee's cost sharing is based on a drug's list price, while the rebate that lowers the net price flows back to the PBM and the plan. That is Cuban's point: the employees who need the most medication pay the most, and the savings show up somewhere else, such as the employer's rebate check.

### How can an employer tell who funds its rebate checks?

Start with how employee cost sharing is calculated. If deductibles and coinsurance are based on list price, employees filling rebated drugs pay on a price the plan itself never pays. Then ask the PBM for drug-level claims data showing the list price, the net price after rebates and the member's out-of-pocket cost for each fill.

## Sources

1. [Sildenafil Citrate 50mg Tablet (price breakdown)](https://www.costplusdrugs.com/medications/sildenafilcitrate-50mg-tablet/), Mark Cuban Cost Plus Drug Company
2. [FTC Releases Interim Staff Report on Prescription Drug Middlemen (July 9, 2024)](https://www.ftc.gov/news-events/news/press-releases/2024/07/ftc-releases-interim-staff-report-prescription-drug-middlemen), Federal Trade Commission
3. [FTC Releases Second Interim Staff Report on Prescription Drug Middlemen (January 14, 2025)](https://www.ftc.gov/news-events/news/press-releases/2025/01/ftc-releases-second-interim-staff-report-prescription-drug-middlemen), Federal Trade Commission