Elon Musk Questions Rising Healthcare Costs — Mark Cuban Explains 7 Reasons CEOs Contribute to the Problem
Elon Musk has long prided himself on his knowledge across various fields, from electric vehicles to AI. He also seems to believe he understands healthcare, questioning its structure on the platform he acquired, X. However, his comments have faced significant backlash, including a response from Mark Cuban, who pointed out that CEOs like Musk are part of the problem. In December 2024, Musk asked why Americans are forced to spend so much on healthcare yet see no real benefits in return. While this raises a valid concern, given the U.S. has extraordinarily high healthcare administrative costs, Cuban argued that Musk himself may be more responsible for the healthcare cost crisis than he’s willing to admit.
Mark Cuban Responds
According to Cuban, the issue isn’t solely the government’s fault. He emphasized that CEOs of self-insured companies often sign contracts that contribute to rising drug prices. Cuban addressed Musk directly in his response, stating, “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.” Cuban then laid out a seven-point explanation detailing how these contracts perpetuate high drug prices, targeting the billionaire. His first point concerned a lack of access to claims data, meaning employers don’t have visibility into their employees’ prescription drug claims, making it harder to manage costs effectively.
Cuban’s second point was that employers have no control over drug lists, meaning they cannot choose which medications to cover, leading to limited options and potential cost increases. He also pointed out that some drugs are categorized as “specialty” without justification, which often drives prices higher. Another point Cuban made was that many of these rebates are funded by the oldest and sickest employees. He also mentioned that small pharmacies are usually reimbursed less than their costs for brand-name drugs, often resulting in closures. His sixth point noted that employers can’t directly communicate with drug manufacturers to create wellness programs. Additionally, these contracts often include NDAs, leading to a lack of transparency and higher prices.
Cuban’s Approach to the Healthcare Cost Crisis
Mark Cuban isn’t just pointing out the problems; he’s actively seeking solutions. His company, Cost Plus Drugs, aims to cut out PBMs, selling drugs directly to consumers at a significantly lower cost. Their pricing model would be completely transparent, showing the actual cost of drugs with a 15% markup, a flat pharmacy fee of three dollars, and five-dollar shipping.
The company also plans to open its own manufacturing plant to produce generics that can be sold at very low prices. While individuals like Cuban are working hard to ease the situation, it remains to be seen if CEOs like Elon Musk will take similar action. However, pharmacy benefit managers are now under more scrutiny than ever, with many companies questioning the contracts they’ve signed with PBMs as frustrations over the healthcare cost crisis continue to rise.
The Bottom Line
Both Elon Musk and Mark Cuban have highlighted major issues with the current healthcare system, which is a point that can be agreed upon by most, regardless of their stance on the crisis. However, they have very different perspectives on what’s causing the problem and how it should be addressed. While Musk has his own thoughts on the matter, Cuban has successfully pointed out that CEOs wield significant influence and therefore have the power to make meaningful changes. Whether Musk will act on this advice remains to be seen. Meanwhile, entrepreneurs like Mark Cuban continue to explore ways to eliminate middlemen and develop more affordable generic drug alternatives.