Elon Musk has long claimed to know a lot about a variety of subjects, ranging from EVs to AI. He also seems to think he understands healthcare, questioning the way it is run on the platform he bought, X. However, his remarks were met with considerable pushback, such as a response from Mark Cuban which pointed out that CEOs such as Musk were part of the problem. In December 2024, Musk asked why Americans are required to spend so much money on healthcare, yet see no real value in return. He may have a point there, considering the United States has exceedingly high healthcare administrative costs. Yet, as Cuban pointed out, Musk may be more to blame for the healthcare cost crisis than he would like to admit.

Mark Cuban Fires Back

According to Cuban, it is not just the government to blame for this situation. He has stated that CEOs of self-insured companies often sign contracts that result in higher drug prices. Cuban spoke directly to Musk in his response, saying, “The key is the contracts CEOs of self-insured companies sign. The PBM (pharmacy benefit managers) contracts YOU have signed for Tesla, SpaceX, and X have more impact on healthcare costs than anything you can do with DOGE.” He then went on to explain exactly how these contracts kept drug prices rising with a seven-point list aimed at the billionaire. The first point Cuban made was regarding a lack of access to claims data. This means that employers don’t have access to the prescription drug claims of their employees. This makes it more difficult to effectively manage costs.

The second point was that they had no control over drug lists. This means that employers can’t decide which medications they cover or not, resulting in limited options and potentially higher costs. His next point was that some medications are labeled as “specialty” without any real justification, often making the prices higher. Another point he made was that many of these rebates are paid for by the oldest and sickest employees. He also mentioned that small pharmacies are typically reimbursed less than their costs for brand-name drugs, often resulting in closures. His sixth point noted that employers could not talk directly to drug manufacturers to create potential wellness programs. These contracts also often include NDAs, which leads to a lack of transparency and higher prices.

What Would Cuban Do About the Healthcare Cost Crisis?

Mark Cuban is not only pointing out the issues though. He and his company, Cost Plus Drugs, are also looking for potential solutions. Their goal is to cut PBMs out of the equation, selling drugs directly to consumers at a considerably lower cost. Their pricing would also be completely transparent, indicating the drug’s actual cost and the 15% markup. It would also include a flat pharmacy fee of three dollars and five-dollar shipping.

The company also plans to open its own manufacturing plant so it can produce generics that can be sold at very low prices. While people like Mark Cuban are doing their part to help alleviate the situation, it is yet to be seen if CEOs such as Elon Musk will do the same. However, pharmacy benefit managers are now under the spotlight more than ever before. Many companies are starting to question the agreements that have been signed with PBMs, especially as frustrations over the healthcare cost crisis rise.

The Bottom Line

The points made by Elon Musk and Mark Cuban highlight the fact there are major issues with the current system. This can be agree on, no matter which side of the healthcare cost crisis argument you are on. Yet, both seem to have very different views of the cause of this crisis and how to deal with it. However, while Musk may have his own thoughts on the subject, Mark Cuban has done a great job at pointing out that CEOs yield great power. Therefore, they have the ability to make many meaningful changes themselves. Whether Musk will take this advice is left to be seen. However, individuals like Mark Cuban continue to try to find ways to cut out the middlemen and develop their own methods of producing cheaper generic alternatives.