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Mark Cuban on Disrupting PBMs, Staying Curious and Using AI to Avoid NBA Fines
On our latest Vital Signs episode, we talked about problems in pharmacy with Mark Cuban, founder of The Mark Cuban Cost Plus Drug Company. Mark talked about why he decided to get into healthcare, what’s broken about the system, staying curious as a founder, what’s most over/underhyped about AI and more. You can listen to the full conversation on Spotify and Apple, watch the episode on YouTube or read the highlights below.
The Mark Cuban Cost Plus Drug Company is bringing price transparency to the pharmaceutical industry as an online pharmacy with over 1,000 drugs, licensed wholesaler,, and partner to MCOs and employer groups. The company is able to keep costs low by only applying a 15% margin to the costs of their drugs.
Highlight 1: Breaking into a new industry
Mark attributes his ability to break into the healthcare industry to his insatiable curiosity.
“I just like to learn. I'm curious all the time. And as an entrepreneur, if you combine curiosity with entrepreneurship, the more you learn, the more opportunities you see. […] And because I do that all the time, like you see on a Shark Tank, you walk in, and I can figure out a business in three minutes. I know exactly what your business is all about because once you see enough of them, those patterns recreate themselves over and over.”
Highlight 2: What’s currently broken
Mark explains how companies unknowingly burden their employees with healthcare rebate costs.
“I'm going to start being out there, screaming really, really loud that companies that get rebates, those rebates are not out of the goodness of their heart. They are paid for by your employees. Not even the manufacturers. By your employees. Because the manufacturers pay the rebates to the PBMs first. PBMs may pay a rebate or will pay a rebate to the company, but that rebate is, again, never out of the goodness of their heart. So the deductibles that your employees may or may not pay, the copays that your employees may or may not pay, the premiums that your employees probably are paying. All those things subsidize the rebates. Nothing is for free.”
Highlight 3: Using his name
Mark shared that he named his startup the Mark Cuban Cost Plus Drug Company to gain trust and show that he was building something meaningful.
“Well, at the beginning, I've never put my name on a company before. […] But when we started, people didn't know if we were serious or not. Were we just one more company that was going to try to get in the healthcare space and try to just nick off a little bit of everybody's budgets and then sell it? And so that's why I put my name on it. I wanted people to trust it.”
Highlight 4: What’s overhyped and underhyped in AI
“I think AGI is over-hyped in AI right now. I don't think you're going to get general intelligence for a long time. And I think singular models are over-hyped. So let me rephrase that. We look at Bard and ChatGPT and Arthur and Anthropic, whatever, all these four or five, Open Source from Meta. And we start thinking that, okay, there's going to be 3, 4, 5 primary models. There's going to be millions of models because all models will have to expand beyond just the basic LLM that's built. And we'll have our own custom models. So we'll all have our own domain knowledge for our companies, our schoolwork, ourselves.”
“I think over-hyped is the fact that there'll be just a few winners. Under hyped is the fact that there'll be millions of large language models that we each use that are trained in specialty domain knowledge, either for a company, individual or a particular category.”
Here’s a full transcript below:
I've heard you talk a little bit about your journey into healthcare before. And as I understand it, in some of the conversations in 2017 around potentially repealing the Affordable Care Act, you got interested in and excited about the space. I'd love to hear a little bit more about that. And also, how did you come up to speed so fast? I feel like you've gone into a part of healthcare that we who have been in it a decade still struggle to understand how in the world it works. It feels masochistic. It feels like a masochistic choice for someone like you.
No. Well first, going back to 2017, there was talk of the ACA being repealed. So being in Dallas, I know Republicans, even though I'm from Pittsburgh, like we talked. And so I started talking to them. They're like, "Well, what ideas do you have?" I'm like, "Well, let me dig in some." And started looking at a way that tried to take the best of different solutions and create a means tested response, if you will, to how do you pay for healthcare? And how do you provide that healthcare? And I got to the White House and talked to a bunch of their people there. And they never really got serious about doing anything, it was more narrative than anything else. But it gave me a chance to really get educated. And then during that period, it was 2018, I got a cold email from a guy named Dr. Oshmyansky.
What was in this cold email? I mean, this sounds like a legendary cold email?
Yeah, in hindsight it has been. But really, he had a compounding pharmacy he was building in Denver in order to make generic drugs at a lower cost, but it wasn't really meant to scale, and it really didn't have a strong consumer facing solution. And so we started just vibing and talking and exchanging emails really before we actually met. I was like, like the idea, but we've got to come up with a way to scale it and there's got to be a way to make it so that people would actually want to use it. And so that's what led to my idea of doing this as Cost Plus. Because the thing that was missing in all my journeys through healthcare, and look, I geeked out. I was reading MedPAC transcripts, all the dumb stuff. But it was interesting to me.
Nothing like a 50-page white paper from the government that really gets the juices flowing
Exactly. So the one thing that was missing across the board was trust. And the second thing that was missing was transparency. And that was really straightforward and simple to get to. And so I was like, okay, let's do this, but let's be transparent and let's do it in a Cost Plus basis so people saw our costs so they would trust it. And then that also extended to, well, there's shortages in a lot of generic drugs, which makes no sense at all. Let's build a factory. And we're getting close to that factory actually opening. It's a robotics driven factory in Dallas.
For a lot of people who maybe listen to this podcast, they may have heard of the Mark Cuban Cost Plus Pharmacy Company. Can you just explain how this actually works?
Yeah. It's really, really simple. We buy drugs and we sell drugs at its base. And we're very transparent in doing that. So if you go to Costplusdrugs.com and you want to buy imatinib, you get to see what our cost is, then you see that we mark it up 15%, then we charge a $5 pharmacy fill fee and a $5 shipping and handling fee, and that's it. And then we ship it to you. And that's for mail order. We have 1,300 drugs, and growing very quickly. And so if we carry it, you can buy it. And that's it. There's nothing else associated with it. That's our cost. If our cost goes down, we pass it on. If our cost goes up, we pass it on. But we show it to you every step of the way. We're in the process of adding an affiliate network of pharmacies. We've got 2,871 pharmacies that are associated. So it's not all integrated on Cost Plus Drugs yet, but it will be. But right now, if you go to teamcubancard.com. And no, I didn't name it. But teamcubancard.com, it's a benefits card, you download your card. And if there's an affiliate pharmacy close by, you can go pick it up instead of having it delivered by mail. And that's pretty much it.
Since this is a healthcare podcast, obviously I think a lot of the people listening are familiar with the pharmacy supply chain in some capacity.
So I want to drill a little bit deeper into some of this stuff. One thing I wanted to ask is, are you guys basically structured like a PBM, but instead of a rebate scheme, you are essentially riding the rails of PBM payments, but you use a Cost Plus sort of methodology? Or is it totally different?
No, it's just very simple. We buy drugs. We sell drugs.
So you're buying at the wholesale prices then basically?
We're buying from the manufacturers or distributor and we're marking them up 15% and then we sell them. And we sell them through the website or one of our affiliate pharmacies. So if you picked up the card and went to an affiliate pharmacy in Pittsburgh, New York, Dallas, wherever, you'd show up and they'd hand you your meds. You'd send them your prescription, you'd show up, they'd hand you your meds at our price. And one of the key elements there is, there's a real challenge for independent pharmacies right now. They've got the big three retail, the big two actually retail networks really pushing them, buying them, competing for better or worse in different ways. And it's really hard for them to make money on every fill. And so with the affiliates that we have, when you go in and use that card, they charge $8 for what would've been the fill and shipping and delivery, and they get to keep it. As opposed to the way it works now with working with a traditional PBM and a wholesaler where they're buying a drug at the wholesale cost minus 4%. And then six months later or 12 months later, if they meet their volume hurdles and exclusivity hurdles, then they'll get reimbursed at that wholesale cost minus 4%. So they're losing 2% on every transaction, plus they're not really getting reimbursed for their time and service. So they're losing money and everybody's hoping they make it up on toilet paper sales. Where we said, no, if you work through our network, you're going to make money on every transaction.
Yeah. It's an incredibly compelling way to get. Obviously it's really impressive the kind of pharmacy network you've already built for folks to be able to pick up scripts in person. It makes total sense, given the value you're providing.
Yeah, we're a couple of months old. We're just getting started. We added Kroger, so you can go to any Kroger and do it. And we will have some more coming.
Yeah, I love that you guys have done zero marketing and it's just become this viral thing in the consumer facing world. And I imagine you've probably been dragged into a lot of conversations already with employers, payers, health systems. Obviously you've got this great direct to consumer, viral angle. How do you think about where the B2B angle of this goes? And what's been the receptivity from some of those folks?
So that's a great question. Let's start with employers, self-insured employers in particular, because 95% of companies with over 5,000 employees self-insure. And so you would think that they, and I say we understand, because as an employer-
Yeah, you're one of them.
I self-insured, right? And so I started digging in and looking, whether it's the Mavs or all my other companies, in aggregate, we self-insure. So let's look at the program that we have and how do we transition so that we take full advantage of Cost Plus and introduce it into other healthcare plans. And the reality was, I had no clue what the f– I was doing. It was embarrassing when we started digging in. As an example, my companies were paying a benefits consultant more than $30 per employee per month. For what? I have no idea. But that was just the usual and customary way that companies did business within benefits design. And so we're in the process now of something we call Project Alfo, where we're like eating our own dog food where it is, how do you transition from a traditional benefits plan to one that doesn't need a healthcare consultant, takes advantage of Cost Plus pricing, designs a plan that has no deductible, et cetera, et cetera? And we're in the process of doing that because it's not as simple as it sounds, because those benefits consultants put you through these contracts that have you work with a PBM administrator or TPA. And then from there they make their money not so much from regular generics, but the big mother load is specialty generics. And so Cost Plus Drugs, imatinib is a perfect example where if you just walk in without insurance into a big pharmacy chain, they're going to try to charge you $2,000. And if you're self-insured, they're going to try to charge your plan $2,000. Droxidopa, all these generic specialty drugs, same type of thing. They might try to charge you $10,000 a month for droxidopa, and we might charge you $61 a month. And so trying to do all, what we're in the process of doing right now is creating the template so that a company like ours, small to medium-sized business, can just work with the template and realize they don't need a benefits consultant, and have a reinsurance outlet, which is typical for self-insured plans, and then do it all internally. It's not that it's hard to do. It's really not hard to do. The challenge is putting together the pieces.
That's super interesting. And that template, it sounds like it extends beyond pharmacy into a bunch of more traditional services?
So initially we can do it with pharmacy benefits and do it as a carve out. But the PBMs see us coming, and the PBMs and the payers are all vertically integrated. PBMs are not stupid. They see what's happening legislatively with people making them the bad guys, which they are, and they're creating new sources of revenue, which just left pocket, right pocket it. So even though they may not be able to spread pricing or rebates, they find the money elsewhere. And so it's not like-
They can operate their own pharmacies.
And they do. And so they make it more difficult. And the underpinning for all that are rebates. So the Mavs, I think we had $138,000 rebate that we would have to give up at the end of the year. And we just did the math, and we would save more than that. And then once you get past the breakeven or save a little bit after the rebate you lost during your transition period, then it's all clear sailing, and you're going to save a whole lot of money going forward. And so all those components, the vertical integration of PBMs and those companies have just obfuscated everything and just complicated everything. And our mission really is just to go back to simplifying it. If you just dis-intermediate all those ancillary pieces, this is a very simple, easy business, particularly on the drug benefits side. You see a doctor, the meds are prescribed, you buy those, somebody pays for them. You just determine how they're paid for. That's it. It is simple, but they've complicated it so much. When you talk to brand manufacturers, it's complicated for them. You talk to pharmacies, they lose money on brands. They play whack-a-mole, the pharmacies try to push a brand script fulfillment to another pharmacy. And so there's so many games being played in a very simple industry. That's what opened the door for us to have the impact that we're trying to have.
So just to follow up on that, I think the pharmacy stuff for generics is sort of straightforward here. But once you start getting into the biologics and now the new biosimilar is coming out, it becomes more complicated.
It does and it doesn't. It does and it doesn't, right? It's just, you deal with who administers it differently. I've never seen an industry with so many acronyms.
WAC, ASP, and all that.
They got WAC, brown bagging, white bagging, clear bagging.
There's clear bagging. Yeah, exactly.
And so that complicates things quite a bit. But again, with specialty drugs, you talk about generics and there's competition there. So that's pretty straightforward. And that's where we started. Then you get into specialty generics, which is where a lot of the PBMs make a ton of their money, and that's where they elicit the rebates from because they arbitrage the lack of knowledge of patients and doctors not knowing, and companies that are dealing with payers, the insurance companies, so that they'll charge you that huge price for that imatinib or droxidopa or whatever. And then they use that money to subsidize the rebates because those rebates don't come out of thin air. They're not giving them to you just because they like you. And so it's not a goodness of their heart thing. And so once we expanded into specialty generics, that was the tipping point for a lot of these things because that's where the rebates were, that's where the easy money was. And we're changing that. So then it becomes, okay, what about specialty generics therapies that are a million dollars, a hundred thousand dollars? And we're having conversations now about how to deal with that
You have one of the biosimilars coming out, right?
Uh-huh, Yusimry. Yeah.
Yes, exactly. Is that kind of how this works for that? You're basically just doing Cost Plus for that as well?
Yeah, of course. Yeah. We want to do Cost Plus for everything, brands, whatever it may be. So, branded drugs that aren't on a lot of formularies because, for whatever reason, the PBM excluded them, they're working with us on a Cost Plus basis, no problem. Invokana from J&J, those types of things, right? Yusimry, it's not like everybody's going to kick Humira off of all their formularies. And so they weren't going to just automatically walk in and be cheaper. And so with Yusimry, they're working with us. And it takes time for doctors to start getting comfortable prescribing it as an alternative to Humira, but they're starting to now. And so we're starting to see the sell through there.
Yeah, it's such an elegant approach to building the business. And I feel like there's all these, whether it's the conversations you're having with employers or what the folks in Blue Cross California have done recently. It feels like there's all these changes starting to happen in the industry. Obviously PBMs are big companies, they're smart folks. I imagine they won't go-
Remember. Wait. One qualification, there's three really big ones that have 80% of the market. Then there's everybody else. And that other 20%, we're working with for the most part. Slowly but surely, we're partnering with them. And one by one, they're using these little Trojan horses. Like, a company might have 10 people who are on Humira, and that's $6,000 a month, and we can cut that down to $600 a month. And so to simplify the math, if it's 5,000 a month times 10 people, that's 50,000 a month. That's 600,000 a year. That's real money.
What do you need that long tail of PBMs for though? I understand why they need you, for consumer demand. But what do you need them for?
Because they do all the IT blocking and tackling.
Got it. That makes sense. And what do you think the big three PBMs – obviously they'll do something to respond here. I assume they have some levers that they'll be able to pull. How do you imagine this space evolving as you get more and more on their radar over the next few years?
Well, we're all on their radar, I know, because you talk to people.
It's you. It's hard not to. I know. You're on our radar. You're on their radar.
But they'll do something, maybe they'll do Cost Plus 5%, right? They'll come up with the program to try to f– us up. And it'll be imagined in one to two ways, a contractual thing, at which point something will happen and then they'll tell somebody, "You can't do business with us." And we'll find out, and it'll be a mess. Or they'll just try to undercut us, which is most likely. They'll just say, "Oh yeah, it's a good idea. We think what Cost Plus Drugs is doing was smart, and we're just going to replicate what they're doing. Only they're cost plus 15%. We'll be cost plus 3%." And that's fine, we'll survive that. But at the same time, when I talk to our people all the time, I always ask or I tell them, "What's our real product? It's not the medications. It's trust." And that trust is built on complete transparency. And I don't see them being completely transparent because, as a public company, they're trying to maximize their earnings one way or the other. Where the s– will really hit the fan is if we get big enough, and who knows if we will, where we impact their earnings. Then they start getting in that death spiral with their stock price and then they start doing desperate things. I doubt we ever get there, but there's always that chance.
I don't think anyone has ever said, "I trust my PBM." That is not a sentence that has ever been-
Words that have never been uttered.
Never been said.
But other than your doctor, that's pretty much what everybody says on the financial side of every touchpoint of the healthcare system.
Well, the consultant is actually an interesting example here, right? Because I think a lot of HR teams and people who are administering the benefits have historically really trusted their consultant to put packages together.
And they're the Usual Suspects movie in all this, right? Where they're all little baby Keyser Sözes, where they're morphing into something, you had no idea. You thought they were a sweet and innocent guy helping you out, and they turned out to be the bastard.
Behind your back.
Yeah, the mastermind of the whole thing behind your back because it is insane to pay. I mean, imagine having 10,000, 100,000 employees, and you're paying some amount per employee per month to a consultant. And that consultant based off of what we've been reading here recently is getting double dip from the PBMs. That is just insane.
I can only imagine the consultant that works with your company seeing your tweet and being like, "Oh, f–. He's figured it out."
I mean, it really is a simple business. It is a simple, simple, simple business. But what happens is, companies of any size, you get so caught up in running your business, you have to trust people, and you trust the way things have always been done. At your last company, you had this consultant and they're now helping you and dah, dah, dah, dah. And this is the way they do it. And oh, by the way, you're going to get a rebate of X millions of dollars at the end of the year that's going to look really good on your balance sheet. Well, what nobody says until now, we're starting to say it. And I actually was in a meeting yesterday and I said, "Watch, I'm going to start being out there, screaming really, really loud that companies that get rebates, those rebates are not out of the goodness of their heart. They are paid for by your employees. Not even the manufacturers. By your employees. Because the manufacturers pay the rebates to the PBMs first. PBMs may pay a rebate or will pay a rebate to the company, but that rebate is, again, never out of the goodness of their heart. So the deductibles that your employees may or may not pay, the copays that your employees may or may not pay, the premiums that your employees probably are paying. All those things subsidize the rebates. Nothing is for free." And I don't think there are CEOs or CFOs or human resources people that have really put all those pieces together.
Totally. I feel like this dynamic of employers getting hosed in healthcare has been going on for a while.
If employers are getting hosed, but what does that mean? It means the employees are.
And employees as well.
And I'm curious. It feels like every year we kind of have that conversation and folks kind of know there's all these weird incentives. And for whatever reason, I think it doesn't seem like folks have really held their consultant's feet to the fire.
Of course not. Think about what you said to me-
You know way more CEOs than we do. Is this going to change at some point? What's your kind of prognosis on where this goes?
When we first started talking today, think about what you said to me. "How did you pick it up so fast?" Because I just lived it and dove in hard. How is the CEO able to do that? How is a CFO able to do that? How is the head of HR able to do that? They can't. In every business, just like you trust Riverside to be your podcast platform, you trust your producer. We all have to trust at some level in how we do business. And so that's the missing link. So I talk to CEOs of some major corporations. They connect me to their HR, I give them the price list. The HR person says, "Yeah, we could save a lot of money, but our contract says this. And here's what it's going to take to get out of that contract." It's like I tweeted yesterday, "Pharmacy benefits are inverse to the number of contracts that are in place to distribute a medication." The PBMs are not dumb.
Yeah, it's funny because even watching the FTC now doing inquiry on PBMs, I feel like one of the interesting things will be, if you come to them with a contract and say, "Hey, this is what we have." And they say, "Our PBM says we can't do business with you." That becomes a very clear anti-competitive steering issue too.
Even worse is if they say to a pharmacy we want to do business with, or a company we want to do business with, "You can't do business with them or we'll do A, B and C." And that will happen.
Would you ever do it in labs? Or are there other healthcare services where-
Yeah, you could. The problem is, the reason it works for pharmacy first is it's really cheap to hold a pill in inventory. It's not cheap to hold a pharmacist in inventory, right? It's not cheap to hold a doctor or a specialist in inventory. And that's the challenge. That's why when you look at hospitals and the like, it's really difficult because I can have a relatively expensive drug like imatinib or even a therapy. But as long as it's a pill, it costs me nothing. And if it's cold chain like insulin, it's still relatively cheap to keep it in a refrigerator.
Durable medical equipment, maybe that's another one. You can keep that inventory.
Over the counter stuff, because there's a huge markup on over the counter stuff as well. And actually, I just reinvested in a company called Labdoor.com, totally separate from Cost Plus, but they check the ingredients of supplements. So to check to see if what they say is in the supplement truly is. And so if we ever get into that side of it with over the counter, we will bring them into the mix because one of the questions we always get is, "Well, you're just buying from the cheapest source from somewhere around the world." And we can't do that, right? That's just a good way to put yourself out of business very quickly. And so we only buy from mainstream manufacturers, and we never buy short-dated. And if we get into anything other than medications, then we'll have to have the same level of quality control.
When we think about the pharmacy supply chain, I think the first time I heard about the Cost Plus company was actually the manufacturing stuff that you're planning to manufacture drugs. Is that still happening? What's the status on that?
That should launch hopefully within the next three months. It's a robotics factory that is designed to do generic injectables that are on shortage. So Pitocin and even Sterile Water and all these things, words I don't even understand and can't pronounce. But we read about pediatric cancer drugs that are in short supply that are generic. And it's because traditional manufacturers have gotten out of that business. And so we got into it. And the goal is to start with the generic injectables. And because it's robotics, 4 to 6 to 10 hours, we can switch what we're manufacturing and do a run and take care of not the whole shortage, but at least have an impact, and with our partner hospitals be able to supply them. And if that works, then we can use that and take our markup there and use it to expand the factory.
Are you going to call it the Mark Cuban Cost Plus Drug Manufacturing, Wholesale and Equivalent Company?
No, we're going to try to find a longer name.
I think the acronyms for your companies are longer now than-
Some of the other ones, yeah. Well, at the beginning, I've never put my name on a company before. I'm not like some people to put their name on buildings and all that kind of s–. But when we started, people didn't know if we were serious or not. Were we just one more company that was going to try to get in the healthcare space and try to just nick off a little bit of everybody's budgets and then sell it? And so that's why I put my name on it. I wanted people to trust it.
I love that. Obviously, I feel like there's so many companies in healthcare with such low NPS that nobody would want to put their name on the startup. So that's a statement about what you intend to build.
And look, our customer service is not perfect by a long shot, right? When you're growing as fast as we are, you're going to have fits and starts trying to scale. And we do. So there's certainly growing pains, but we will get through them all.
I'm waiting for the Kevin O'Leary Pharmaceutical Benefit Manager company as the rival.
You know what, if the word benefit is in there, it's never coming from Mr. Wonderful.
Too funny. One thing, I think of you as at the epicenter of tech, general entrepreneurship. And there's a lot of folks, when they talk about HealthTech, there's this ongoing debate about how much of a role can technology play in healthcare? Can folks that are not in the industry come into the industry? And so I'm curious, from all the time you've spent in HealthTech recently, to what extent do you feel like building a successful HealthTech business is similar to other spaces you've spent time in? And how much of this is similar to other businesses versus getting everyone's incentive perfectly right, and figuring out that weird corner case that is so bespoke and weird about healthcare?
Look, the reality is, there's 900,000 doctors give or take, of which fewer numbers are actually practicing. And when I talk to however many I've talked to, the one thing they'll always say is, "It's still 95% art and 5% science." And when you get into a set of circumstances like that, there's room for technology.
And I say it all the time, whenever you look at a business, and for decades or generations it's been done the same way, then that's ripe for disruption. The question really for HealthTech is, do you want to work inside the system or outside the system? That's the hard part. Because the easier money is inside the system. So if I was 25 and looking to build a company as an entrepreneur and wanted to make 25, 50, 100 million dollars, I'd work inside the system because I could hustle, use tech, build a company, sell it, make some good money. If I make great money, I buy a sports team and go from there.
Mark, if you make great money, you buy a sports team and you start a company outside the healthcare system to blow it out.
Exactly. That's the approach most are going to take. And that's what happens, right? And so that's also the problem and the opportunity for HealthTech, working inside the system versus outside the system. Because rule 101 is you go where the money is. And the money's inside the system first. It's harder to get it outside the system and it takes longer. And so that's kind of the general rules of the thumb when it comes to HealthTech. And really, EduTech, everything, all technologies.
One thing I'm struck by is you're so deep on so many different things. How do you balance your time across the Mavs, Shark Tank, this? This podcast. How do you just wake up? We snuck in there somehow? Yeah, and still have an hour for us somehow?
Yeah. I just like to learn. I'm curious all the time. And as an entrepreneur, if you combine curiosity with entrepreneurship, the more you learn, the more opportunities you see. And what I've learned over time is, most people don't take the time to learn. Most people aren't as curious as I am. And because I do that all the time, like you see on a Shark Tank, you walk in and I can figure out a business in three minutes. I know exactly what your business is all about because you see enough of them, those patterns recreate themselves over and over. And here we are talking about healthcare. Most people will say how complex it is. It's really a simple industry with lots of complexities introduced. And once you figure out the underpinnings of it, I'm not going to try to be a doctor, but it's really easy to learn. It really, really is. And that's the same with any industry, whether it's media, healthcare, sports, analytics, whatever it may be. And now with AI coming and generative AI, because I've written software, I spent seven years as a programmer, and I've done networking and started the streaming industry, all this stuff. I've been through all these things. And so it's really easy. It's like a ball of yarn. That first roll is hard to try to get it all together. But just growing and growing and growing, it becomes easier and easier.
Do you ever fire up the terminal nowadays just to play around with the new generative AI stuff?
Totally. So given that you're playing around with all these generative AI tools, can we expect that your appeals for NBA fines going forward are going to just be auto-generated?
It's funny, now, as I start to cut and paste things in and start to customize it, you can bet that you'll see some tweets about NBA officiating, "Write a tweet about this call from this play by play that I just cut and paste, and do it with respect to the NBA rules that I cut and paste before, and write a tweet that won't get me fined."
You're going to have to do some serious fine-tuning to get that fine line of no fine and communicating the message.
Hey, but the amount of money I save, I can hire five interns to cut and paste all that stuff.
Yeah, reinvesting penalty money into building out the AI. That's too good. Last question I think I have before we probably go into the quickfire round. Obviously you are one of the faces of people who are trying to do interesting new stuff in healthcare that is actually a little bit probably different than what we normally see with philanthropy and all this kind of stuff from people who have slow companies. They donate to research or they put their names on hospitals. Yours is like a different flavor. It's how do I use my trust to introduce a new competitor?
I hate that shit, right? Because when you see a building with somebody's name on it, that leads to higher cost of care. When you see a building at a university with somebody's name on it, that building has to eat every single day. It has to get maintained. And at some point, it's going to be an old building. And when you have single purpose buildings like that, they just increase the cost of tuition. They increase the cost of care. I have a friend who I went to college with that runs a hospital, and he was like, "Well, we want to get your feedback on this." And I'm listening, and they're like, "We just spent X amount of millions to build this new psychiatric building." I'm like, "Okay, well, the first thing you can do to improve things is sell the building. Get out of there and move back into where you were and take all that money and apply it to reducing the cost of care and extending your reach." It's like the old joke, the hospital CEO, you walk into the office of any hospital CEO, the one thing that's common across all of them is you see building plans, you see blueprints. And so I just try to look at it and say, okay, if this is the way it's always been done and this is what everybody's doing, it's probably wrong and there's a better way to do it.
Do you think you're inspiring your peers to try your approach in some other capacity?
No, no, no. First of all, it's not like I hang out with rich people all the time, right? My friends are my friends, my Pittsburgh friends, my college friends, my rugby friends, those are my friends, my Dallas friends. So it's not like I'm talking to peers telling them what to do. And two, they're rich. They don't give a f– what I do.
That's fair. They're buying the hospitals.
They're doing their own podcast, going, "That idiot, Mark Cuban, doesn't have a clue. Whatever he does, I do the opposite. And that's how I've made all this money." So everybody does their thing.
That's awesome. Well, we always like to end with a quick fire round of just a handful of things. And with you, I feel like it'd be interesting. One thing we always like to ask is one thing that you feel is over-hyped in tech right now and one that you feel is under-hyped.
I think AGI is over-hyped in AI right now. I don't think you're going to get general intelligence for a long time. And I think singular models are over-hyped. So let me rephrase that. We look at Bard and ChatGPT and Arthur and Anthropic, whatever, all these four or five, Open Source from Meta. And we start thinking that, okay, there's going to be 3, 4, 5 primary models. There's going to be millions of models because all models will have to expand beyond just the basic LLM that's built. And we'll have our own custom models. So we'll all have our own domain knowledge for our companies, our schoolwork, ourselves. I'm going to Google in a couple of months, and they asked me, "So what kind of products do you think?" I'm like, "Well, if you would take the million Gmails I have, you can make me immortal." If I can literally import all the Gmails I have ever written that I still have and will ever write until the day I die, and input them and train an LLM at whatever state of the art at the time, you can ask Mark Cuban questions for the next 6,000 years.
But would that bot get excited about a Cost Plus pharmacy cold email? That's the real question.
We'll just ask it. You don't think this is really me, right? This is an avatar. I'm out playing basketball somewhere.
Mark's playing basketball. This is an avatar. But yeah, so I think over-hyped is the fact that there'll be just a few winners. Under hyped is the fact that there'll be millions of large language models that we each use that are trained in specialty domain knowledge, either for a company, individual or a particular category.
Have you started using them at all within the Mavericks?
Yeah, of course. Cost Plus Drugs and Mavericks, we use it wherever we can because, worst case, it's a hacking shortcut, right? I mean, it's a typing shortcut hack. So it's like, okay, I was going to have to write all this shit out, and you got to think it through and start typing. And so I'll just put it in there and then I'll just cut and paste it into Google Word or Google Docs, whatever, and that saves me time. So yeah, of course.
Totally. No, and I imagine for the players too, it could be a great way to scale the ability to communicate out and do a lot of interesting things.
I mean, yeah, because we're just in the first inning. The latest version of Bard has an extension that connects to Gmail, but it only goes back five mails. So the day that goes back 5,000 or 50,000, it's just like, okay, write this for me, or ingest all my tweets, ingest all this or that. It'll be insane. And I have a company, Synthesia.io, and they do avatars and stuff. So once you train it, this literally, because this is a talking head, can be any language, any response to any question. If it's a Mark Cuban LLM, MarkGPT, it's going to be crazy.
And we're going to have to disclose if you're talking to a bot or not.
For sure. I just did a deal with an agent to synthesize my voice, to be able to be used for different projects so that I don't have to show up. And once we get that, so if I'm doing a promo for the Mavs or Cost Plus or anything, you just type in the script and there's my smiley face, and just saying what the prompt is telling it to say. Just think of the time you can save.
To bring it full circle also, the whole thing is about trust, right? If I trust Mark Cuban and X thing, and he can scale everywhere theoretically.
And transparency, because if this was an avatar doing this podcast, there can be a transcript and then behind it there can be the actual links that were used to generate the response. And it may not just be from public sources, it may be from internal Cost Plus Drug sources that we're willing to make public in the interest of transparency.
Well, we're very excited to have your avatar back on for a future episode. When that's fully up and running, we'll gladly test it out. Obviously, your interest in healthcare started on the policy side. And I'm curious, if we gave you a magic wand and you could make one policy change to improve healthcare in the country, what's something that comes to mind?
Get rid of exclusivity contracts, one. And two, standardize payer provider contracts. Because what happens is, every year, two years, three years, depending, hospitals have to set up new contracts with payers, or new payers come along, et cetera. And that leads to more administration, which leads to just more people doing accounts payable, accounts receivable, looking up things for a particular contract for this particular patient. And that's 20% to 30% of the cost of healthcare in this country. Who knows, maybe you could cut that in half if you just had a standardized contract.
And when you say exclusivity, you mean like, you can't contract with one of our competitors, kind of exclusivity?
Right. Or you have to hit a certain volume. Like a PBM to a pharmacy, "You have to hit X percentage volume or you're excluded from a formulary," that type of thing.
Got it. Cool. Well, last question, and I guess this is related to the bot too. But you've done a bunch of cameos on different TV shows. Which one has been your favorite that you've done?
Sharknado for sure.
You were the president, right?
I was the president, so I got to act. Business is business. You're always concentrating and trying to find solutions, and it's very logical. Whereas acting, you just have to let go. You just have to be in the moment. Which is different and fun. But for Sharknado, because it was a lot of CGI, there was these huge, Lou Ferrigno, Rick Fox, all these people that were there, and they had to pretend. Well, they were around me, guarding me when the Sharks attack. They had to pretend they were getting eaten by a shark. So they're all laying on the floor and I'm doing everything I could not to just crack up. They're all going like this. Because I told them when I did it, I said I'd only do it if I didn't die, because if there's going to be more Sharknadoes, I wanted to be able to come back. And so watching these people just wiggle on the floor is just hysterical.
Oh, man. That was a serious crisis you had to deal with. I guess after overcoming that, I'm sure taking on the PBM-
I can do anything, right?
Is nothing compared to literally having to run a country in a massive shark crisis.
But think about it. They offered it to Donald Trump first. If he would've said yes, the country we're living in would be night and day different.
Anything else you want to plug at this point or things that folks can do to learn more about Cost Plus Drugs? Or even just, you do a lot of cool research in healthcare, where do you direct folks?
So costplusdrugs.com, obviously. markcuban.com for the companies. You can follow, all my social media is MCuban, whether it's on X or Twitter or Instagram or whatever. And that's typically where I'll post new things that I'm doing.