On Monday, a state-funded committee in Louisiana gave Mark Cuban’s Cost Plus Drug Company a taxpayer-funded microphone to attack Pharmacy Benefit Managers (PBMs). But what the public was not made aware of in the committee’s agenda is that PBMs are Cost Plus’ biggest competitors – and they were not given a seat at the table.
That means anyone watching CEO and co-founder Alex Oshmyansky, or reading coverage of his presentation, didn’t get both sides of the story of a very complex issue that affects healthcare prices across the state and the country.
Cost Plus brags about how it makes and sells its own generic medications directly to consumers, but the company doesn’t cover expensive specialty drugs. PBMs, meanwhile, act as a go-between for drug manufacturers, insurance companies and pharmacies.
Where PBMs make the biggest impact is on drugs like Humira – a drug that treats a myriad of autoimmune diseases such as Crohn’s disease or painful conditions like psoriatic or rheumatoid arthritis. Cost Plus only offers a kind of medication known as a biosimilar – a chemical copy of a drug that tries to produce the same results for patients while not copying the formula for drugs like Humira exactly. Sort of like buying the Temu version of Humira.
Cuban’s company also doesn’t carry many breakthrough drugs for cancer, including leading immunotherapy drugs like Keytruda and CAR-T cell therapies that treat dangerous blood cancers.
Because drugs like Humira or Keytruda take years or decades to develop and can be difficult to make, they are often very expensive, costing thousands of dollars per dose.
But these are the kinds of drugs that determine whether patients live or die – and they are precisely the medicines PBMs negotiate down in cost through rebates and discounts. Cost Plus simply isn’t in that arena.
Critics like Cuban and Oshmyansky cast PBMs as villains, claiming they unnecessarily inflate costs. But the truth is more complicated. PBMs are the only players with enough leverage to challenge Big Pharma’s inflated list prices. Without them, drug manufacturers would hold unchecked power to charge as much as they want – and patients would face even higher costs for the very medicines they need most.
Providing patients with cheap generic Viagra is easy; negotiating the prices of lifesaving medication is hard.
That doesn’t mean PBMs are perfect. Big Pharma doesn’t want anyone to know how much money they’re making from producing drugs like Humira or Keytruda. The so-called list prices they charge are drastically inflated and do not accurately reflect the true investment they’ve put into developing and manufacturing these drugs.
PBMs can also add layers of opacity – rebates with Big Pharma that are negotiated in secret, spread pricing buried in contracts, and clawbacks that are nearly impossible for patients or doctors to decipher.
This lack of transparency makes PBMs easy targets. Cuban and politicians like Governor Jeff Landry seize on these complexities to spin a simple story for the public: PBMs are greedy middlemen. It’s a narrative that sounds compelling but it ignores the reality that PBMs are actually bringing prices down. $10,000 per dose is a lot of money, but Big Pharma would charge $100,000 or even $1 million per dose if it could – and many experts say that PBMs are the only ones keeping that from happening.
The opacity problem is real – but it generates sensational headlines instead of real solutions.
That’s why PBMs should take the lead on reform. Instead of waiting for lawmakers to impose heavy-handed rules, PBMs can earn public trust by embracing transparency. They should:
Publish rebate agreements, fees, and net drug costs in plain language so critics like Cuban can’t accuse them of being greedy.Show how negotiated savings are passed on to patients and insurers in real-world terms so that everyone can see the value they’re providing.Invite independent audits to verify practices and build credibility with patients and doctors.
If PBMs step up voluntarily, lawmakers will have less reason to step in and give their competitors like Cuban an opening to smear them. And if legal measures are eventually needed, they should focus narrowly on creating guardrails that don’t weaken PBMs’ ability to keep drug prices low.
The PBM Oversight Monitoring Advisory Committee was created to enforce Louisiana’s PBM law fairly and even-handedly. Instead, by giving Oshmyansky the microphone to bash his competitors, it risks becoming a stage for political theater rather than serious policy.
Louisiana has a choice. It can allow a celebrity entrepreneur’s latest business venture to frame the narrative with half-truths that suit his business model. Or it can insist on fairness – demanding accountability from all players, while recognizing that only PBMs have the leverage to make the most expensive, life-saving drugs affordable.
The committee should remember: flashy headlines don’t lower drug prices. PBMs do.
