Mark Cuban’s direct-to-consumer online pharmacy makes insurance look unnecessary

Mark Cuban © Christopher Willard/ABC via Getty Images

A new analysis by researchers at The Ohio State University suggests that direct-to-consumer (DTC) pharmacy models could challenge traditional prescription insurance. For now, they’re more disruptive on paper than at the counter.

The study, published August 19 in JAMA Network Open, compared the cost of 33 neurologic medications sold through the Mark Cuban Cost Plus Drug Company to estimates from commercial insurance and Medicare supplemental databases.

The Cost Plus Drug Company, co-founded by Cuban and Alex Oshmyansky, M.D., Ph.D., in 2022, is an online DTC pharmacy that sells medications using a transparent cost-plus pricing model.

The study found that, while DTC pharmacy users paid an average of 75% more out of pocket, the total annual costs were 413% lower than those of insured patients filling prescriptions at commercial pharmacies.

“The difference was close to zero for a lot of these different medications,” said first author Amanda Gusovsky Chevalier, Ph.D., M.P.H., assistant professor in the division of general internal medicine at Ohio State’s College of Medicine.

“The reason that’s notable is because this price that patients can get directly from a website is the same as the cost to patients who, on top of buying medications, are paying a premium for an insurance plan that’s probably coming out of their paycheck,” Gusovsky Chevalier said. “So the cost you’re paying that is subsidized by your insurance provider is the same as what you could pay at the Mark Cuban pharmacy. This could be a great option for uninsured patients who are paying completely out of pocket.”

A closer look at the math

Researchers analyzed neurologic drugs used to treat conditions like Alzheimer’s disease, multiple sclerosis (MS), peripheral neuropathy, Parkinson’s disease and myasthenia gravis. They compared 2024 DTC prices to model-estimated insurance costs derived from a decade of commercial claims data.

The findings showed that, while insured patients benefit from lower copays, the system’s broader costs — including premiums and insurer payments — drive total spending sharply higher.

In contrast, the DTC model’s transparent pricing structure, which cuts out pharmacy benefit managers, resulted in significantly lower overall costs.

MS drugs teriflunomide and droxidopa were among the medications with lower out-of-pocket costs on the Cost Plus platform — 40% and 18% lower, respectively. The biggest systemic savings appeared in total costs: teriflunomide (-5622%), droxidopa (-4777%) and dimethyl fumarate (-1894%).

If every commercial prescription were filled through a DTC pharmacy, the study estimated aggregate out-of-pocket expenditures would rise by $82 million — but total U.S. drug spending could drop by roughly $9 million.

Market limits — and opportunities

Still, researchers cautioned that DTC pharmacies currently cover a narrow slice of the market. At the time of the analysis, Cost Plus listed only 33 of 79 neurologic medications — about 42% of those available commercially.

That limited formulary could complicate care for patients using both DTC and traditional pharmacies. Fragmented medication records may create safety risks and complicate coordination between prescribers and pharmacists.

The authors concluded that there are real benefits, especially for uninsured patients. They also advise caution for patients who work both sides of the system to pay the lowest prices, as they risk having fragmented prescription records that could lead to unintended drug interactions.

What this means for physicians

For physicians, the study serves as both a new resource and a policy question.

Online pharmacies like Cost Plus may offer patients without coverage a way to access essential medications at competitive rates, but they also expose inefficiencies in the private insurance model, where administrative costs and negotiated markups often overshadow direct drug prices.

As Gusovsky Chevalier and colleagues note, these findings come against the backdrop of rapidly rising neurologic drug costs.

In a related study published earlier this year in Neurology, the same team found that out-of-pocket costs for new-to-market neurologic medications rose by more than 1,700% between 2012 and 2021, with aggregate migraine drug spending climbing 1,993% during that period.

The bigger picture

The results point to a system increasingly out of sync with patient affordability.

“Our research has shown that the costs of medications just continue to rise through insurance plans, and it’s really important to find ways for patients to access medicines,” Gusovsky Chevalier said. “I think this adds to a larger body of evidence showing that these direct-to-consumer pharmacies have the potential to disrupt the market in some significant way in the future.”

That said, disruption alone won’t fix the problem. Unless insurers respond by reducing premiums or simplifying pricing structures, insured patients may still pay more overall — even if the sticker price looks lower.

For now, Cost Plus and similar platforms may serve as a practical tool for uninsured patients, a bargaining chip for physicians advocating on behalf of cost-burdened patients, and a wake-up call to a system where the “insured” sometimes pay the higher price.