U.S. Senator Tommy Tuberville (R-AL) participated in a U.S. Senate Special Committee on Aging hearing focused on increasing transparency as a way to lower health care costs. During the hearing, Tuberville spoke with Mark Cuban, Co-Founder of Cost Plus Drugs, and Dr. Keith Smith, Co-Founder of the Surgery Center of Oklahoma.
Tuberville began by highlighting the challenges of the current health care system, stating, “Chairman, thanks all of you for being here today and talking about a subject that’s very important to all Americans across the country. And as Dr. Smith said, [we have] an out-of-control health care system, which it is. Mr. Cuban, innovative companies like Cost Plus Drugs have already proven that bypassing traditional PBMs can deliver real savings at pharmacy counters. President Trump has announced ‘Trump RX,’ a new website, which will connect patients directly with the best prices. How might Trump RX and direct-to-patient programs improve affordability for patients? You’re basic—why are you doing this?”
Cuban responded by expressing support for the Trump RX initiative and its potential to lower costs for consumers: “Yeah. I mean, we’ll work with Trump RX, I mean, it’s incredible. It’s stupendous. It’s like the most incredible program ever. And so, we’re excited to offer them our API so that they’ll be able to download our daily prices. So, when they go down, everybody benefits. Plus, I like what they’re doing with the MFS. Because as I mentioned in my comments, our brand drugs are more expensive because PBMs are involved. And with Trump RX and the MFN program, that allows manufacturers to work around the PBMs and work directly to patients. So, I think it’ll save seniors, it’ll save everybody a lot of money.”
When asked if such programs represent the future of health care pricing, Cuban said, “I don’t think it solves the ultimate problem of how the system is designed. But I think it’s something that we obviously agree on because that’s what Cost Plus drugs is. We publish our entire price list every day.”
Tuberville also questioned how transparency in drug pricing can benefit patients financially. Cuban explained, “I mean, you know, with CostPlusDrugs.com, any patient can just go look at their price for their medication. And, so, there’s no uncertainty. But more importantly, by seeing our markup of only 15% and seeing our costs, that builds trust. I always tell everybody in our company that what we really sell in this industry is trust. And, so, I think that’s what’s really allowed us to grow so quickly.”
Discussing specific savings, Tuberville asked about the cost difference for medications such as Ozempic when purchased through direct-to-consumer programs compared to those involving pharmacy benefit managers (PBMs). Cuban stated, “Well, if you look at what’s happening now where the PBMs work with sponsors, they’re typically being charged $1,300. And if you look at the direct-to-consumer programs, that are being put out there by Novo and Lilly, it’s $499 or less and probably falling. So, there’s already a significant difference. And the crazy part is that difference of $800 typically goes right into the pocket of the PBM who then decides how much they’re gonna give to the employer. So, it’s been—it’s a huge amount as of right now.”
Turning to Dr. Smith, Tuberville discussed the Surgery Center of Oklahoma’s model for surgical care pricing transparency. He asked what inspired Smith to create this approach and what aspects of traditional health care he sought to avoid.
Smith replied, “Well, we started the Surgery Center of Oklahoma because, frankly, practicing in a big hospital as an anesthesiologist I’d served as an accessory to a financial crime. Surgeons were also being denied the tools many of them required to appropriately treat patients due to the cost-cutting measures at hospitals trying to maximize the revenue. So, I didn’t grow up in a home like that. I grew up [with], which is a golden rule, mutually beneficial exchange. And so, as a hospital-based physician, the only way I could escape that was to own and control my own facility […] where I was responsible to the patients, not just for the medical treatment, but also the way financially we dealt with them. So, the patient asked, you know, what can you do about this bill? My answer was everything, including not charging them. So, we’re in a good position to be charitable on an individual basis, and that’s really the answer. We started it because we wanted to be in control of the medical and the financial journey the patient had in their health care experience.”
Addressing whether patients are willing or able to shop for care based on transparent pricing information, Smith said, “Well, patients will not only shop for care, but they’ll vote with their feet. Half the patients we see at Surgery Center of Oklahoma do not live in Oklahoma. We see patients from Europe and Africa, all over the United States. And self-funded employers see such an insane price difference between our prices and the local hospital where they’re doing business [that] they wave all out-of-pocket for those employees and a companion to fly to the Surgery Center of Oklahoma to have their procedure. And not just us, but those who’ve copied us. So, people will shop and they’ll travel and furthermore, they’ll hold our price up in front of their local hospital and tell them match this or I’m going to Oklahoma City. We had a patient from Georgia that was gonna be charged $40,000 for a urologic procedure and our online price was $4,000 and the hospital matched our price because that would have been the second patient that month that came to Oklahoma City and they didn’t wanna see that. The patient reached out to me later and said, ‘You saved me $36,000 and you didn’t even perform the surgery.’ So, there is a market that is developing, it’s a competitive market, it’s driving prices down. It’s driven prices down in Oklahoma City, I know, and quality goes up at the same time.”
Senator Tuberville concluded his remarks by thanking the participants.
Senator Tommy Tuberville represents Alabama in the United States Senate and serves on several committees including Armed Services, Agriculture, Veterans’ Affairs, HELP and Aging.
