I revisited my conversation with Mark Cuban on PBMs, transparency in healthcare costs, and why pharma is the “easiest business [he’s] ever disrupted.”

Needless to say, there’s a lotta juice left in that lime. (Sorry, I’ve never said that before.)

I pulled 5 of my favorite “out of context” Cuban quotes for your reading enjoyment (don’t worry I included the context below).

Without further ado, I present…

Cuban Out of Context

1. “It’s cheaper to buy Tadalafil than a bag of M&M’S”

“It’s one of the most opaque marketplaces and industries on the planet, and that makes absolutely no sense. And when you get regulatory capture and scale capture that’s dominated by just a few players, like the, the medication businesses, it opens the door wide open for new players who aren’t so greedy and that’s us.”

“But the way it is right now with no transparency? Like if it was up to me, I wouldn’t be worried about pricing transparency from providers. I’d be worried about cost transparency from providers.

“Just like we show the cost of what we pay on Cost Plus Drugs for Tadalafil, which is one of our highest—I think we have a huge market share—of Tadalafil. Like I tell my friends, it’s cheaper to buy 90 Taldalafil from us than it is to buy a bag of M&M, but I digress.”

“But if we forced hospitals to open up their general ledgers, then, oh my God, think about the change! Because then you know what the margins are. And they might say, ‘well, it’s competitive. We can’t disclose all this stuff.’ But we’re not talking about practice. We’re talking about healthcare, and trying to align interest of the patients and change the game. If somebody’s out there buying hospitals and they start publishing their costs of everything, people get to see and can start analyzing it, and then you get some wisdom from the crowd. Healthcare can change.”

2. “We’re trying to take it back to 1955…”

“You go to the doctor, the doctor renders services, they tell you how much. And if the patient can’t afford it, they use a payment plan.”

“The whole big point of this process is about simplification, not complication. All the people trying to reduce the cost of health care are effectively inserting themselves to try to improve a part of the complicated process. You’re taking something that’s already too hard, making it less hard, and saving people some money, but you’re not dealing with the real issue.”

“We’re just saying, whether it’s a hospital or doctor, as a company, we’ll take responsibility for that payment plan We’ll pay upfront, or the reinsurance will pay for it.”

“Totally simple, but here’s the kicker: for all the contracts we do direct contracting. We’re going to publish them this year, so that just like when we published our price list and people got to see they were getting ripped off, they’re going to be able to compare our direct contracting contracts. Now, a lot of this stuff is complicated. But it’s a start.”

“As we start that process and people get smarter about negotiating and companies get smarter about their plan and how they can use their cash, we can get great rates on reinsurance because we’re a big company that’s not cash constrained.“

3. “PBM contracts are like Fight Club…”

“The #1 rule of a PBM contract is you can’t talk about the PBM contract.”

“You would think that as an insurer, you would have all non-patient identifying data available in aggregate. Nope. Unless you’ve got maybe 500,000 lives or more, you don’t control your own data, which is absolutely insane when you think about it. You have to go to your PBM and ask them for that information. And they’re going to say no! And then if you get really, really mad, then they’ll charge you for it.”

“And then put aside wellness issues. If you’re trying to understand the cost associated with any given claim, [PBMs are] not going to give you the net cost associated with that claim.”

“Now they’re saying they’re going to give it to you at some point in the future, maybe in 2028. They’re calling that ‘transparency.’ (I’ll believe it when I see it.)”

“But wait, there’s more. Not only does the sponsor (or in this case, the employer or state), not control all their data, the manufacturer doesn’t get all their data either. PBMs don’t give you data. They don’t let you control your own formulary.”

4. “Pharma is the easiest business I’ve ever disrupted”

“That seems kind of crazy to people. But when you think about it, most of the innovations that people try to introduce are really financial engineering at some level, you know, how do I save 2% here or 3% there?”

”If you apply that to a big number, then that’s worth me investing in and getting a return on. We just tried to look at the underpinning of the problem. I mean pharmacy is so simple. Somebody makes [the drug], they sell it to a wholesaler, the pharmacy buys it, a doctor prescribes it.”

“If you have insurance, it looks it up to see what the elements of the plan are. And then the pharmacist in that last five feet delivers it. It’s easy. But then you’ve got the bigger PBMs that come in and complicate it because they know they can extract and in an industry this size, 1% is a whole lot of money.”

5. “I don’t think there’s a reason that health insurance should exist.”

“So, no, we’re not going to get into the health insurance space. But we’re going to try to make it so that self-insured employers have no reason to work with insurance companies.”

“The question becomes how do you call out the hospitals and the providers on the fact they don’t know what their costs are. Why do we allow that? Why is the health of our entire country based on providers who don’t know their own f*cking costs?”

“This is on the insurance side, too, from top to bottom. [Not opening the books is] the problem and it’s not just on the back of CEOs using consultants that don’t really go to the core of the problem and are just trying to make money. Why are they approving plans with constrained networks? And why are they not saying ‘if you want any money from me, you got to publish your general ledger?’”

“I think across the board a theme that would be great for healthcare is just increased transparency. People don’t want to do that because they’re scared of what it would do for their business.”

“This isn’t the Dallas Mavericks, this is the health and welfare of our entire country.”

Look, I’m a capitalist through and through, every ounce of me. Howard Roark was my hero. But at the same time, you can be compassionate in certain industries, right? You don’t have to just grab every nickel that you can get when there’s this at stake. And so if they’re not going to be “compassionate,” then yes, the feds should say, [we don’t want to legislate you more, but] you’ve got to open the books.”

P.S. As you can see, an hour wasn’t even close to enough time for this chat. You can watch the whole replay here, in the Hospitalogy membership community. (I promise, he gets less blurry after a few minutes.)