The pharmaceutical sales entrepreneur told the audience at the Silicon Slopes Summit that these companies are “taking advantage of the system.”
Mark Cuban has challenged President Donald Trump’s administration to consider breaking up the largest health insurance companies.
With a snap of his fingers, he emphasized that such an action could significantly reduce healthcare costs. “They control so many things,” he remarked during a discussion with senior Medicare officials at the Silicon Slopes Summit. Once a subsidiary is divested, he believes costs will “fall like a stone.”
Cuban and Chris Klomp, the deputy administrator for Medicare at the Centers for Medicare and Medicaid Services, talked about the problems within the healthcare system and potential solutions for lowering costs for Americans.
After seeing one of Cuban’s posts on social media, Klomp and Cuban had a light-hearted phone conversation. They seemed to share some moments of laughter and occasional pauses. Klomp kicked off their meeting by presenting Cuban with a Medicare insurance card that was humorously oversized.
During their chat, they recounted their journeys as entrepreneurs, including their first jobs. Before diving into the prescription drug business, Cuban even sold sloppy joes at fairs.
His company, Cost Plus Drugs, launched in 2022, directly sells prescription drugs to consumers with only a minimal markup. This approach helps customers save considerable amounts. For instance, a 30-count pack of 250 milligrams of azithromycin, commonly known as a Z-pack, costs $9.37 through his service, while most pharmacies charge around $150.
Klomp introduced a new government initiative known as TrumpRx.gov, which allows consumers to purchase some brand-name medications directly from manufacturers.
Cuban pointed out the importance of such programs, stating that large insurance companies often have greater control over drug prices than either he or President Trump does. They possess substantial influence, managing prescription benefits and negotiating discounts.
He noted that there are always extra costs involved, and insurers often find ways to profit in situations where pharmacy benefit managers cannot. “They know how to game the system faster and better than we can,” he said.
The lack of transparency in drug pricing, according to Cuban, has fostered distrust in the healthcare system. His own company has opted to avoid partnerships with major insurance players, instead focusing on direct contracts with providers. He mentioned that he has shared a plan online for others looking to do something similar.
Klomp mentioned that the Trump administration is also striving for increased transparency. He recently informed lawmakers about new measures that should help consumers discover lower drug prices and lessen the impact of controversial pricing practices.
He added that the government’s responsibility is to “create an environment in which people can become disruptors.”
Interestingly, directing Medicare wasn’t something Klomp aspired to as a child. Before joining the Trump administration, he had a career as a technology entrepreneur and CEO of a health IT firm in Utah.
Klomp admitted he took the role “reluctantly,” observing that despite significant spending, Americans remain unhealthy.
He stopped short of backing Cuban’s proposition to dismantle major insurance firms. For real improvement to occur, he stressed the need for entrepreneurs in the audience to “challenge the incumbents,” working alongside startups like Cuban’s.
