Mark Cuban has a simple question for CVS’s drug middleman: Why don’t you publish your prices?

Mark Cuban. (Photo by Brian Fluharty/Getty Images)

Businessman and TV personality Mark Cuban has a seemingly straightforward question for the huge drug middleman owned by CVS: If you’re as transparent about drug pricing as you claim, why don’t you publish prices on your website?

The company didn’t answer directly.

Cuban, founder of Mark Cuban Cost Plus Drugs, last week raised that question to the Capital Journal in response to a paid column that appeared April 3 in Forbes magazine. It was written by David Joyner, president of CVS Caremark, CVS’s pharmacy benefit manager, or PBM.

The company is the largest drug middleman in the United States. It represents insurers in drug transactions by creating lists of drugs that are covered, negotiating deals with manufacturers, reconciling transactions at the pharmacy counter and reimbursing pharmacists.

The three biggest PBMs — CVS Caremark, OptumRx, and Express Scripts — are part of giant corporations that each own a top-10 insurer. Together they represent 80% of the patients whose prescriptions are covered by insurance. And they say they use that size to force the big pharmaceutical companies to reduce prices.

“Our size and scale allow us to go toe-to-toe with drug companies, driving competition and negotiating discounts that make the difference between someone affording their medication or going without,” Joyner wrote in his Forbes column.

However, those companies have for years been dogged by accusations that they’re not transparent and that they’re pocketing huge amounts from their position as middleman in lucrative pharmaceutical transactions. 

For example, a special investigation by the Ohio Department of Medicaid showed that CVS Caremark and OptumRx in 2017 took nearly a quarter-billion dollars in previously unknown fees from the health program for the poor. Six years later, the companies are still in court, fighting to keep secret information that it redacted in the report — even though the media reported it in 2019.

Questions about the big PBMs reached the point that the Federal Trade Commission in 2022 mounted a major investigation of the companies’ practices. It’s ongoing.

Amid stories about seemingly arbitrary pricing in which the big PBMs were sometimes paying themselves 100 times as much for drugs as they could be gotten elsewhere, Cuban and others started opening businesses that take drug purchases outside the insurance/PBM system. Discarding the PBM model of using a dizzying array of “maximum allowable cost” lists, the pharmacies publish their cost for the drugs and charge that plus a set markup plus a set dispensing fee.

For example, pharmacist Nate Hux opened Freedom Pharmacy in Pickerington. Illustrating how arbitrary pricing in the insurance/PBM system can be, Hux in 2021 reported selling a patient Celecoxib — a generic version of the anti-inflammatory drug Celebrex — for $23.05. When the patient used her insurance, her copayment alone had been $141.

The Mark Cuban Cost Plus Drug Company site reports other such disparities. 

In his column, Joyner, the CVS Caremark president, points out that such operations deal chiefly in generics — the least expensive class of drugs that are no longer patented and thus available from multiple manufacturers. He said the idea behind such cost-plus businesses is old and outmoded.

“The reality is, the Cost Plus offering is neither novel nor unique — it is a generic sourcing business that is 10 years too late,” Joyner wrote.

Cuban appeared to tweak Joyner for claiming the Cost Plus idea is irrelevant, while simultaneously going to the trouble to write a column in a national magazine criticizing it.

“My only response is that we are honored that he would take the time to talk about us and we hope he continues to do so,” Cuban, an owner of the Dallas Mavericks, said in an email.

In his column, Joyner said Cuban’s operation couldn’t address “the real issue: This country has a brand drug pricing problem.”

Those are the more-expensive drugs that are still under patent. The big PBMs negotiate huge, non-transparent rebates and discounts from their manufacturers in exchange for covering them on behalf of the millions of patients they represent. Joyner blamed drugmakers for raising list prices of drugs, but research has shown that list prices go up in conjunction with rebates and discounts received by PBMs. 

A spokesman for CVS Caremark didn’t respond directly to a question asking whether, through its negotiations, the company impacts the prices of branded drugs.

In his column, Joyner also said CVS Caremark was bringing sunlight to drug pricing. He wrote, “… we are creating a more transparent environment for drug pricing in this country, and it’s not just for 2,500 drugs; it’s for every drug from every manufacturer for every condition and every patient.”

That prompted Cuban to ask whether the company would publish drug prices on its website as his company had.

“All anyone has to do is go to costplusdrugs.com and look at our pricing and then go to their websites and do the same,” Cuban said. “Then they can make their own decisions.”

Asked whether CVS Caremark would publish prices, its spokesman, Phil Blando again didn’t respond directly.

“The point David (Joyner) is making is one we’ve talked to you and many others about: PBMs are the only enduring protection from high prescription drug prices for seniors, the disabled, and working families,” Blando said in an email. “Prior to the advent of PBMs, consumers were at the mercy of drug companies’ high list prices. Many patients could not afford their medicines and otherwise manageable conditions took a heavy toll. We remain confident in our model and our ability to deliver sustainable savings to our clients and their members without sacrificing access or quality.”

For his part, Hux on Monday said his Pickerington business has grown by the month. He said word-of-mouth, media coverage and Cuban’s venture have all raised awareness of the cost-plus pricing model.

He said that it not only allows him to offer many medicines much more cheaply, the model also creates fewer headaches than his insurance-using pharmacy does.

“We don’t have to fool around with chasing claims, all the extra administrative work,” Hux said. “The documentation, there’s a lot of paperwork to deal with. And the fees they charge the pharmacies. And the audits. It’s just very inefficient. I hate it.”

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