Mark Cuban, a billionaire investor who has been urging his peers to support Vice President Kamala Harris, on Thursday clarified his views on whether Harris should reappoint Lina Khan to head up the Federal Trade Commission.
In an email to the Capital Journal and on a podcast, Cuban said that he supports most of what Khan has done, but he fears that breaking up some big tech companies might put the United States at a disadvantage when it comes to developing artificial intelligence.
Harris has been courting Wall Street types, and as she has, she’s faced pressure to remove Khan, who has led the antitrust watchdog into a new era of enforcement after decades of rapid corporate consolidation.
The new enforcement includes an FTC investigation of huge pharmacy middlemen, a lawsuit the agency filed over their insulin-pricing practices, a lawsuit to stop the proposed merger of grocery giants Kroger and Albertsons, and a crackdown on tech companies such as Google.
Two of Harris’ billionaire donors — media mogul Barry Diller and LinkedIn founder Reid Hoffman — in July called on Harris, if she wins, not to reappoint Khan, whose term expires this year.
The Financial Times earlier this month reported that their views are echoed by many on Wall Street. Harris has been making a play for support from the big money crowd as many worry that former President Donald Trump is too erratic.
Cuban earlier this month seemed to agree with Hoffman and Diller when he told Semafor that he wouldn’t reappoint Khan if it were up to him.
Which might seem strange, given that he’s started one of the biggest ventures yet to disrupt the power of huge pharmacy middlemen have to control the cost of prescription drugs. The three companies — CVS Caremark, OptumRx and Express Scripts — control access to 80% of insured patients in the United States, and they’ve long been accused of using secretive practices to unfairly profit from pharmacy transactions.
All three of the middlemen, or pharmacy benefit managers, are part of companies that also own major insurers, and some pharmacies have shown that moving transactions completely outside the insurance-PBM system can produce savings for consumers. In some instances, such pharmacies are able to sell drugs at prices that are significantly lower than what insured patients pay just for coinsurance, deductibles or copayments.
Launched in 2022, the Mark Cuban Cost Plus Drug Company took the concept national. Its website lists the cost of all the drugs it supplies and patients can compare those to their out-of-pocket costs at pharmacies that work with insurers and PBMs.
As he has, Cuban has been a fierce critic of what he sees as PBMs’ non-transparent practices. Under Khan, the FTC has mounted a major investigation to try to get behind the curtain obscuring the companies’ pricing practices.
So does Cuban really want to see her go? On Thursday, he said he’s generally pleased with Khan’s performance, but thinks some of the big tech companies need to stay intact so they can keep up in the race to develop artificial intelligence.
“I think Lina has done a great job with PBMs, scam companies and click to cancel. All invaluable,” Cuban said in an email.
In addition to measures the FTC has taken to crack down on PBMs, Cuban was referring to actions the agency has taken against sound-alike companies and to make it easier to cancel recurring subscriptions. But he warned against going too far in breaking up Big Tech.
“IMO, the biggest issue is AI as a global competitive imperative,” he said. “I think breaking up our biggest AI companies is a mistake.”
That echoes what he said a day earlier in a podcast.
“Despite what you heard me say publicly — I may not like what she’s doing with AI and big companies there — but I love what Lina Khan has done at the FTC with the pharmacy business,” he said.
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