At WIRED’s “The Big Interview” event earlier this month, Cost Plus Drugs founder and “Shark Tank” star Mark Cuban asked why his low-cost drug company I was asked if I would not make a profit.
“We’re obviously not doing this for altruistic reasons. We’re running a business,” the event host pointed out.
“Well, you should make more money,” Cuban said, drawing laughter from the crowd. “We are a public interest corporation, how much money do we need?”
“I’m not trying to go to Mars,” he added, apparently criticizing his billionaire rival Elon Musk.
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What are cost-plus medicines?
Mark Cuban Cost Plus Drug Co. is an online pharmacy co-founded by Cuban radiologist Alex Oshmyansky that aims to disrupt the pharmaceutical industry and reduce drug costs. It launched in January 2022 and offers more than 2,300 prescription medications and delivery.
How does Cost Plus Drugs price drugs?
Cuban outlines how the pricing structure works on the company’s website. Cost Plus increases the base price by 15% and then adds on the actual cost the pharmacy charges to prepare the drug.
That means, for example, a ringworm medication like albendazole costs about $113 elsewhere, according to Drugs.com, but $35, according to the letter. (Cuban wrote that the company paid $26.08.)
“Many people spend exorbitant amounts of money every month just to stay healthy,” Cuban wrote. “Americans shouldn’t have to suffer, or worse, because they can’t afford basic prescription drugs.”
Related article: How Mark Cuban forced America’s largest pharmacy to turn around
What is a public interest corporation?
Charitable corporations, also known as B corporations, have shareholders who own the company, unlike nonprofits. So, while making money is important, it’s not everything.
A non-profit (or not-for-profit) contributes to the public good and does not make a profit, whereas a public benefit corporation seeks to make a profit while serving a purpose greater than itself, and allows a company to contribute to the development of the world. I have a desire to do so. It’s a better place,” said Rick Bell of Harvard Business Services.