When the Insured Pay More Than the Uninsured: Cuban Called It “Contractual Terrorism”
(SeaPRwire) –
The three-way alliance of CVS Caremark, Express Scripts, and OptumRx doesn’t just handle 80% of U.S. drug claims. They’ve built something closer to a feudal tollgate than a competitive market. When Cuban walked into the Texas House on Sept. 1, he told lawmakers something unsettling. Insured patients at his Cost Plus Drugs pharmacy are often better off paying cash than using their own insurance. He wasn’t describing an anomaly. He was describing the equilibrium of a system designed to hide cost. According to West Health-Gallup, 51% of U.S. adults can’t reliably afford quality care. That’s not a market signal. That’s a structural failure. These aren’t fringe cases. These are the people the insurance system was supposed to protect.
Cuban’s first two steps in his five-part plan expose how this moat operates. His example is blunt. If a prescription costs $500 through insurance but $100 through Cost Plus Drugs, the patient should take the cheaper route. That spending should count toward deductibles and out-of-pocket maximums. No penalty. No gatekeeping. Right now, the system punishes patients for saving money – their own and their insurer’s. Cuban’s point is that price competition is the only mechanism that can break this. The second step targets the contracts themselves. Three PBMs process 80% of claims. Their contracts can run hundreds of pages with harmful terms buried deep inside. Cuban calls it “contractual terrorism,” and he’s not exaggerating. Government entities at every level are forced to negotiate these opaque agreements from scratch. States, cities, counties, school districts – each one negotiating individually, every cycle. Cuban has drafted a model PBM contract as a template. He wants to stop making every government entity start from zero. That’s not idealism. That’s common sense procurement.
The remaining three steps address the information asymmetry that keeps this structure intact. Pricing must be public wherever taxpayers foot the bill. Medicare and Medicaid are both included. Rebates, fees, guarantees, affiliate compensation – all of it needs to be disclosed. Without that price discovery, the market can’t function when one party holds all the information. Gag clauses that prevent employers and plan sponsors from discussing contract terms need to be eliminated entirely. They block fee comparison and better negotiation. Cuban calls these provisions a key mechanism that prevents transparency. And enforcement penalties must actually sting. Cuban’s point here is devastating in its simplicity. Some of these companies make billions, get caught, pay a fine, and write it off. He says they write it off more easily than he wrote off his NBA fines. That’s not deterrence. That’s a line item in the P&L. Regulators should ease on a first major violation. But repeat offenders need steeper penalties.
The political landscape here is genuinely strange. Cuban backed the Break Up Big Medicine Act in March. Sens. Josh Hawley (R-Mo.) and Elizabeth Warren (D-Mass.) introduced it. The bill would bar any single company from owning both an insurer or PBM and medical providers. It’s been referred to the Senate Judiciary Committee and hasn’t advanced. In May, TrumpRx added more than 600 generic medications through Cost Plus Drugs. Amazon Pharmacy and GoodRx were also involved. That put Cuban on the same side as a president who called him “a loser” during the 2024 campaign. Pragmatism has overtaken ideology. But Cuban frames the stakes higher. Rising healthcare costs, not AI, are the real threat to American jobs. The Break Up Big Medicine Act remains deadlocked in committee. But the model PBM contract is ready to deploy. And the cash-price-vs-insurance pricing gap at Cost Plus Drugs keeps widening. When a billionaire runs a pharmacy where the uninsured pay less than the insured, the antitrust case stops being theoretical.