When Elon Musk turned to Cuban, known for his straight talk and deep dives into healthcare reform, gave Musk and other CEOs a crash course in how their decisions directly impact the cost and quality of healthcare in the US.
“The key is the contracts that CEOs of self-insured companies sign,” Cuban wrote in response to Musk’s tweet. He explained that many of these contracts, especially with Pharmacy Benefit Managers (PBMs), are the cause of rising costs and poor care.
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Cuban laid out seven key issues with typical PBM agreements that affect not only companies like Musk’s Tesla and SpaceX, but also their employees and families:
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No control over claims data: Companies don’t get full access to the data about what’s being billed or paid.
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Limited formularies: PBMs determine which drugs are covered, often prioritizing profit over health.
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Overpriced ‘special medicines’: these are often marked up without justification.
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Rebates come at a cost: “rebates” paid by pharmaceutical companies ultimately increase employees’ deductibles and co-payments, hitting the sickest and oldest hardest.
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Harm to independent pharmacies: PBMs often reimburse small pharmacies for less than the cost of brand-name drugs, driving many out of business.
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No collaboration with manufacturers: Companies cannot work directly with drug manufacturers to create targeted wellness programs.
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Opaque contracts: Many PBM agreements include non-disclosure agreements, making the system inefficient and driving up prices across the country.
“All of this means that the big PBMs can continue to disrupt the pharmacy market for literally EVERYONE,” Cuban points out.
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Cuban didn’t just highlight the problems – he offered solutions. He called on Musk and other CEOs to take control by contracting directly with healthcare providers and working with “pass-through” PBMs that prioritize transparency and lower costs. Cuban also suggested that educating CEOs on these practices should be a priority for Musk’s future agency, the Department of Government Efficiency (DOGE).
“It starts and ends with educating CEOs like you, of self-insured companies, to do what is in the best interests of their employees and families,” Cuban wrote.
He also warned of the legal risks for companies that ignore these issues, calling them a sign of things to come. There will be “ubiquitous class action lawsuits for all CEOs after this,” he warned.
Cuban clarified that while he may not “know cars or rockets,” he does know how to fix healthcare. His message to Musk – and other CEOs – was clear: the power to change the system is in their hands. By prioritizing transparency and better contracts, they can have a dramatic impact on the cost and quality of healthcare for millions of Americans.
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This article Mark Cuban Says ‘I Don’t Know Cars or Rockets’, But Schools Elon Musk on How US Health Insurance Works originally appeared on Benzinga.com
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