WHEN: Today, Monday, March 4, 2024
WHERE: CNBC’s “Closing Bell: Overtime”
Following is an excerpt from the unofficial transcript of a CNBC interview with Billionaire Investor Mark Cuban on CNBC’s “Closing Bell: Overtime” (M-F, 4PM-5PM ET) today, Monday, March 4. Following is a link to video of the full interview on CNBC.com: https://www.cnbc.com/video/2024/03/04/watch-cnbcs-full-interview-with-billionaire-investor-mark-cuban.html.
All references must be sourced to CNBC.
MORGAN BRENNAN: Meantime. I spoke with billionaire investor Mark Cuban earlier today. His Cost Plus Drugs start-up offers 2,500 generic medications in its online pharmacy. It works with companies, insurers and patients directly. Cuban participated in a White House roundtable focused on healthcare costs today. His message? The big three pharmacy benefit managers, or PBMs, are driving drug prices higher.
MARK CUBAN: Some of the things that the big three PBMs do is they set formularies based off of rebates. So, for example, the number one prescribed drug is Humira, and they can charge $8,000 a month for Humira to self-insured employers and insurance companies. When there’s biosimilars like Yusimry from Coherus that we charge on CostPlusDrugs.com $594 per month. We could save companies millions of dollars, cash pay patients millions of dollars. But they won’t do that. There’s other examples where they just are destroying independent and community pharmacies, where they will reimburse — so let’s just say Eliquis as an example. The community pharmacy might pay, I’m just picking a number, $500 per monthly delivery of Eliquis. And rather than reimbursing them for the full amount that they pay, they will reimburse them $400 or less. And we see that even worse with Wegovy and some of the semaglutides. And the list is just on and on of things that pharmaceutical benefit managers do for themselves at the expense of patients and self-insured companies. And the craziest part is, and the message really that I wanted to get across, these big three pharmacy benefit managers, there’s nothing unique about them. There is nothing that they do that so many of the independent and small transaction-based, rebate-free PBMs do that couldn’t do the same thing, right? And so the message that I really wanted to send to self-insured employers in particular is, stop using your big three PBM. Go to your employee benefits consultant and ask them, why are you sending me to one of these big three companies and why are they paying you on the back end for you to send me there, when I could be saving an untold amount of money for my employees and for the company itself? It’s just insane the way the system works right now. And CostPlusDrugs.com is just pushing a way to change it.
BRENNAN: Yes. And along those lines, I mean, you launched Cost Plus Drugs, what, two years ago. You have got thousands of generic drugs on the platform. How many patients do you have? How many insurance companies are you working with, how many hospitals, how many, I guess, regular companies too?
CUBAN: We work with everybody and anybody. I mean, we have got millions of scrips that we have delivered, probably a couple million patients now. I mean, our numbers, we’re setting records almost every single week. And so our biggest challenge is just keeping up with the volume. We’re about to release — we’re about to open up our manufacturing plant this week, where we will be releasing sterile injectables for generics that are on short supply. So you hear all about the pediatric cancer drugs that kids can’t get in hospitals. So we’re going to start, shipping sterile injectables and the pediatric cancers — pediatric cancer drugs in about two months. So we’re trying to cover all the bases.
BRENNAN: Interesting. When I hear you talking about launching manufacturing, what is it taking to stand up that production line, and do you have plans to do others?
CUBAN: Yes, I mean, it costs a lot. And so our production line is robotically driven. So we can change from one injectable to the next every four hours. So we’re able to meet the demand of shortages, and that’s the mission of the factory. Now, we’re — we don’t have unlimited capacity, so once we can get this up and running, then we will look at ways that we can expand it, so that they’re — if we do this right, over the next five years, there will no longer be any more shortages in sterile injectables.
BRENNAN: So, as you do have thousands of generic drugs on the platform, do you have access to enough of them and enough of the products that you’re looking to offer to consumers?
CUBAN: Yes, I mean, we — the goal is to get every single drug we’re legally allowed to sell. We have 2,500 generics, which is pretty much all of them. And we have got probably 10 different brand manufacturers that we’re working with. But it’s hard to add the brands because those big three PBMs are telling the brands, don’t work with CostPlusDrugs.com. So that’s our biggest challenge.
BRENNAN: Is CostPlusDrugs making money yet?
CUBAN: No, we’re not making money yet, but that’s OK. We’re changing an industry, we’re saving patients. I mean, we’re taking — I — Morgan, I can give you example after example. A drug like imatinib, where you might have to walk into a CVS and they will charge you $2,000 or $2,500, and, depending on the strength, you can get for $21 from Cost Plus Drugs. A drug like droxidopa, same type of story, $10,000 for three months down to $30 a month from CostPlusDrugs.com, just example after example after example. So I may not be making money yet. I will be. This will be self-sustaining, but the impact we’re having is just incredible.
BRENNAN: Yes, I asked about whether you have enough drugs. Do you have enough workers?
CUBAN: Oh, yes, I mean, we have got — I mean, our biggest challenge is just adding more brands. And as we add more brands, we’re going to continue just to change the industry more and more and more.
BRENNAN: How do you see this new AI era?
CUBAN: It’s a beast. There’s only two types of companies in this world, Morgan, those who are great at AI and everybody else. If you don’t know AI, you are going to fail, period, end of story. Whether you are an employee, you’re going to have to understand it and impact — how it impacts your job or how you can use it to be better at your job. Same if you’re a student, the same thing. And if you’re a CEO, you can’t just say, OK, I’m going to get my tech guys to understand it and educate me on it. You have to understand it, because it will have significant impact on every single thing that you do. There’s no avoiding it.
BRENNAN: Yes. And, of course, we’re seeing that from a policy debate standpoint too. If you were in charge of regulating, what would be the first thing you would do?
CUBAN: You can’t regulate it. There’s just — it’s brains-driven. It’s not policy-driven. The smartest people around the world are trying to come up with new ways to leverage AI to create everything, from military all the way down to every application you can think of. And there’s no way you’re going to start somebody working in a garage again from being able to manipulate AI the way they want. You just can’t legislate that at all. What you can do is develop strong relationships with everybody in the industry and communicate with them, because it is strategic for the United States of America. We have to be able to win the battle. We also have — going back to immigration — I’m not talking about policy — we have to be able to have the best and brightest around the world who know AI want to come to the United States of America to contribute. Because, if it gets into an adversary’s hand, bad things can happen.
BRENNAN: With Bitcoin testing a new all-time high right now, your thoughts on this crypto rally? And I guess, just as importantly, since you have been outspoken about it in the past, how much your portfolio is in cryptocurrency?
CUBAN: I don’t even know how much, but it’s happy. Bitcoin, in particular, Ether net — ETH to a smaller extent, Bitcoin is just driven by supply and demand. There’s only going to be 21 million of them. The more people that buy and the fewer people that sell, that means the price is going to go up. That’s just the nature of it. It’s a great store of value. That’s why I have an investment in it, because I do feel that the demand is going to exceed the number of people selling. ETH, we will see what happens with the ETF and whether or not that gets approved. But because of the way it works, it’s a little bit different and it’s a little bit more driven by utility, but there’s more and more applications coming for the utility. The biggest disappointment of crypto so far has been there’s not that one application where you go to your grandma and she says, I have got to get this new crypto app because all my friends are using it, kind of like we saw in the early days of apps with Instagram. We need that transitional application for crypto to be ubiquitous, but, until then, just from an investment perspective, I’m investing in Bitcoin over gold all day every day, and I have said that for years.
BRENNAN: Now, he also sold the majority stake in the NBA’s team the Mavericks. This is his last season on “Shark Tank,” and then, of course, he is focused on this health care situation. So, I asked him what’s next, and he said, health care, health care, health care. I also asked, because he has said he would not run for president, but he’s been very outspoken, particularly on social media, if there’s a situation that would change his mind around that. And he basically said no. But I would also just note, in terms of this event at the White House, it comes at a time where you have the administration really focusing on health care costs. There’s an expectation that you’re going to have a task force stood up around this and that it is going to play a role in what we hear from President Biden on Thursday in the State of the Union address as well.
