Mark Cuban Cost Plus Drugs Strikes First Deals with Insurer, Outside PBM

Mark Cuban Cost Plus Pharmacy, the online pharmacy and generic manufacturing startup backed by the eponymous billionaire investor, recently struck its first deals with a health plan, Pennsylvania’s Capital Blue Cross, and a PBM, Rightway Healthcare Inc. The direct contracting deal represents a major step for the startup, which has done most of its business so far as a direct-to-consumer retailer — and one drug pricing expert tells AIS Health, a division of MMIT, that the deals help Cost Plus moves toward its ambitious, disruptive goals.

Rightway, a startup PBM with a direct-to-consumer retail pharmacy business, said in a Sept. 27 press release that it is the first PBM to enter a network agreement with Cost Plus. “The integration into Rightway’s modern PBM combines the transparent pricing of Cost Plus Drugs with Rightway’s signature member experience, granting members direct access to the pharmacy from within the Rightway mobile app,” the release said.“Rightway’s health guides will assist any members interested in transferring their medications, from answering their questions to coordinating with the provider on the member’s behalf.”

Meanwhile, Capital Blue Cross said in an Oct. 7 press release announcing its deal that it is “the first health plan in the nation to collaborate with the Mark Cuban Cost Plus Drug Company.” The press release added that “this month” the insurer and Cost Plus “will begin sharing information about their collaboration with Capital members and community organizations.”

Blues Plan Sought Out Cost Plus

Samir Mistry, Pharm.D., Capital Blue Cross’ vice president of pharmacy strategy & services, tells AIS Health that the insurer sought out Cost Plus.

“Capital Blue Cross is always looking for ways to control costs for our members and our employer groups and help them get the greatest value and benefits from their coverage. We approached Cost Plus Drugs in an effort to provide yet another option for people to obtain affordable medications. We want to increase access and affordability whenever and wherever possible, and this relationship allows that to happen in a new way,” Mistry says via email.

According to Mistry, Cost Plus is one of “several major retailers” in the Blues plan’s pharmacy network “who offer online pharmacy services, including national and regional supermarkets and drug store chains.”

Cost Plus CEO Alex Oshmyansky, M.D., Ph.D., told AIS Health in October 2021 that the firm wants the bulk of its business to be paid through patients’ pharmacy benefits, whether that comes through payer direct contracting along the lines of the Capital Blue Cross deal — or the bespoke PBM that Cost Plus launched last year.

Even though Cost Plus is open for direct-to-consumer business, Oshmyansky said that “I don’t want people paying cash. I want our products covered by insurance. But I also want transparency. I don’t want to figure out effective-rate clawbacks to the PBMs and have to artificially inflate our prices to account for those. So the only way we could really come up with a solution for insurance coverage for our pharmacy, to be able to do it the way we want to do it — with transparency — is to get into the PBM space.”

Capital Will Retain Prime Therapeutics As PBM

Despite that, Mistry says that Capital Blue Cross’ pharmacy benefits contract will stay with Prime Therapeutics, the Blues affiliate-owned PBM. The insurer has held a stake in Prime since 2020. Mistry says that “this will simply be another pharmacy option for our members to choose when filling their prescriptions. On 1/1/2023, Cost Plus Drugs will be integrated into our pharmacy benefits through our PBM, so our members will be able to process prescription claims.”

Mistry adds that formulary restrictions won’t apply to Cost Plus prescriptions: “All generics offered through Cost Plus Drugs are available to our members or any consumer who visits our site and accesses Cost Plus Drugs. They will pay only the price listed on [the] Cost Plus Drugs website and they can do their own comparison shopping to determine the best option for them.”

Cost Plus CEO Wants to Rival Express Scripts, Caremark As PBM

But according to Oshmyansky, Cost Plus has set its sights high in the PBM business.

“I do think we’re going to try to be the primary PBM for employers. I do think that’s the best way we can line up saving employers money,” Oshmyansky said last October. He said that Cost Plus is “absolutely” trying to reach the scale of major PBMs like Cigna Corp.’s Express Scripts or CVS Health Corp.’s Caremark. “It’ll probably take a number of years to get to that point, but we’re nothing if not ambitious.”

Ge Bai, Ph.D., a professor at Johns Hopkins University’s schools of business and public health, says that there is ample opportunity for disruption in the PBM space.

“The incumbent, large, dominant PBMs — overly aggressive behavior on their side creates opportunities for disruptive players to enter,” Bai says. “Insured patients are facing high generic drug costs. That’s a direct result of PBMs’ very aggressive behavior in the generic space. That creates opportunities for new guys, like this Cost Plus Drug Company, and companies like GoodRx.”

It’s a “warning sign” to big PBMs that Cost Plus has been able to start working out deals with insurers “in such a short period of time,” Bai adds. “If you don’t improve your value to your clients, be ready to get disrupted — get ready to lose your market share.”

Contact Bai at, Mistry via, and Oshmyansky at

© 2024 MMIT
Peter Johnson

Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

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