Mark Cuban, businessman and founder of Cost Plus Drugs, said on June 6 that vertically integrated pharmacy benefit managers (PBMs) and health insurers use market power and payment practices that he said harm independent pharmacies, employers and patients.
"The PBMs/Insurance companies (they are vertically integrated) have multiple ways to extort indy pharmacies. They will force the pharmacy to hold receivables on the reimbursements, costing them a ton of cash. The information asymmetry is a feature for them and a cost for the entire country. There is nothing good about the biggest vertically integrated healthcare companies. This is not an efficient market. We need to break them up," Cuban said in a social media post.
The pharmacy benefit manager market is highly concentrated, with major PBMs linked to insurers, retail pharmacy chains and other healthcare businesses. According to the Federal Trade Commission (FTC), this vertical integration gives large PBMs significant influence over drug formularies, pharmacy networks, reimbursement rates and patient access across the prescription drug supply chain.
An FTC staff report found that the six largest PBMs handle about 94% of U.S. prescription drug claims, giving a small number of companies substantial control over how prescriptions are processed and reimbursed. The three largest—CVS Caremark, Express Scripts and OptumRx—are each tied to large healthcare conglomerates with insurance and pharmacy operations.
Federal reimbursement benchmarks such as the National Average Drug Acquisition Cost (NADAC) are used in Medicaid programs to help determine payment rates for outpatient prescription drugs, a process that intersects with broader pharmacy reimbursement systems shaped in part by pharmacy benefit managers. NADAC is based on a monthly nationwide survey of retail community pharmacy drug prices, with weekly updates for state Medicaid agencies, according to the Centers for Medicare & Medicaid Services.
Another FTC interim report said specialty generic drugs have become a major profit center within vertically integrated PBM systems, with pricing practices that can affect patients, insurers and pharmacies when reimbursement structures lack transparency.
Mark Cuban is a Pittsburgh-born entrepreneur, investor, and co-founder of Mark Cuban Cost Plus Drugs. His business career includes building Broadcast.com into an early streaming company, investing across technology, media, sports, and healthcare, and using Cost Plus Drugs to focus on transparent prescription drug pricing and affordability.
