Mark Cuban: The Cost Plus Drugs model shows the purchase price, adds transparent markup and pharmacy fees, allowing customers to see the final price
Mark Cuban is urging to pass the proposal to governors and all known politicians, stating it could reduce healthcare spending in a state. The Cost Plus Drugs model shows the purchase price, adds transparent markup and pharmacy fees, allowing customers to see the final price; many insured customers still buy because the cash price is often lower than what their insurance plans require them to pay.
Five points for Texas: First, allow patients to buy the same drug at a lower cash price and count that expenditure towards deductibles within state authority, exchanging savings for competition. Second, require state, city, county, and school districts to use standardized contracts with pharmacy benefit managers and third-party administrators; he claims existing texts can be hundreds or even over a thousand pages, which he calls "contract terrorism," and is willing to provide his own written templates for free, which can be modified as open source. Third, the prices, costs, rebates, guarantees, pharmacy reimbursements, related compensations, and audit rights paid by taxpayers must be disclosed to break information asymmetry through price discovery. Fourth, abolish non-disclosure clauses so employers can compare prices and terms. Fifth, give a serious violation one chance, and if repeated, suspend Texas government procurement qualifications for a period, treating audits as investments: spending $10 million to block $100 million in waste yields a tenfold return.
The company has production and wholesale capabilities in Dallas, with a website serving all fifty states, combating opaque price differences with a cost-plus markup of about 15% plus fixed pharmacy fees. The target is pharmacy benefit managers managing prescription plans, not the prescribing rights of doctors.
In market mechanisms, this is a strike against intermediaries in state procurement rules: buyers are patients who want cash prices counted towards deductibles and public employers, while sellers are benefit managers who survive on contract thickness and non-disclosure clauses. Funding shifts from rebates and price differences to visible markups. Beneficiaries are pharmacies with lower cash prices and taxpayers; those under pressure are vertically integrated insurance-benefit management-affiliated pharmacies. The event driver is the policy list, not new drug approvals.
When cash prices are lower than insurance copays, the plan itself is a markup machine.
Source: Public information
ABAB AI Insight
Cuban has written a legislative explanation for the drug-selling company: disclosing the purchase price has already won part of the insurance copay in the market, and the next step is for the state government to recognize that this cash can count towards deductibles; otherwise, patients are effectively punished for saving. Standardized contracts and open-source templates turn the "thousand pages no one can read" from a weapon of information asymmetry into a comparable commodity. Once non-disclosure clauses are removed, employers can see how much others are paying, and price discovery can begin.
The capital path is to bypass the purchasing and distribution of benefit managers and then use the political list to change the procurement operating system for public employers. Money shifts from rebate pools back to drug price tags. The motivation is to make the Cost Plus markup the default comparison benchmark. Resource mobilization relies on Dallas production capacity, logistics across fifty states, and a free contract, rather than acquiring another insurance company.
The analogy falls on the price comparison after the deregulation of airline ticket prices and the public bidding of municipal contracts. The industry phase shifts from middle-layer expansion to a control period of procurement transparency. The position is at the contract table of the state government as one of the largest employers, not at the main venue for federal drug price negotiations.
The structural judgment belongs to the transfer of pricing power. The mechanism is: drug prices are not in the formula, but in the contract; if contracts cannot be read, compared, or discussed, pricing power remains with the party writing the contract. Two strikes out change fines from operating costs to losing government procurement, and deterrence begins to resemble pricing.
ABAB News · Law of Cognition
When cash prices are lower than insurance copays, the plan is a markup machine
Contracts that cannot be read are, in themselves, pricing power
If fines can be written into costs, they are not punishments