EP465: The Not Super Effective Contracting Industry Norm, Where Jumbo Plans and Others Wind Up Paying $10,000 for $50 Drugs, With Chris Crawford

The Hidden Costs of PBMs: How Aggregate Discount Guarantees Inflate Drug Prices.

In this episode, host Stacey Richter interviews Chris Crawford, CEO of RxSaveCard, about the inflated costs within the pharmacy benefits industry. The discussion centers around a lawsuit involving J&J, highlighting how large PBMs can significantly overcharge for drugs that are available much cheaper through cash-pay options like Mark Cuban's Cost Plus Drugs. Crawford explains how Aggregate Discount Guarantees, a common contracting mechanism, often fail to control spread pricing effectively and instead may lead to higher costs for plan sponsors and employees. The episode also covers how RxSaveCard can help employers and employees access these lower cash prices, circumventing the inflated costs from traditional PBMs.

WHAT YOU'LL LEARN

✅ What an Aggregate Discount Guarantee is, and why it's a common PBM contracting mechanism that plan sponsors assume protects them from spread pricing

✅ Why divergent list prices and perverse incentives prevent Aggregate Discount Guarantees from actually limiting cost spread the way they're marketed to

✅ Why it's critical for plan sponsors to check actual drug cost prices themselves — and how employers can go about checking them

✅ What drives drug costs lower, and why that mechanism changes the calculus for plan sponsors willing to look past traditional PBM contracts

✅ How RxSaveCard works, whether a PBM's permission is needed to use it, and what it looks like in practice for employers and employees accessing lower cash prices

WHY THIS MATTERS

The J&J lawsuit at the center of this episode is a case study in how much room exists between what a PBM charges and what a drug actually costs through cash-pay alternatives like Cost Plus Drugs. Aggregate Discount Guarantees are sold to plan sponsors as protection, but Crawford's argument is that the math underneath them is built to obscure spread pricing, not eliminate it — and tools like RxSaveCard exist precisely to let employers route around that structure.

MENTIONED IN THIS EPISODE

EP365 with Scott Haas: Apple Podcasts | Spotify | Other Apps

EP397 with Paul Holmes: Apple Podcasts | Spotify | Other Apps

EP439 with Luke Slindee, PharmD: Apple Podcasts | Spotify | Other Apps

EP379 with AJ Loiacono: Apple Podcasts | Spotify | Other Apps

EP461 with Chris Crawford: Apple Podcasts | Spotify | Other Apps

EP356 with Ge Bai, PhD, CPA: Apple Podcasts | Spotify | Other Apps

=== LINKS ===

🔗 Show Notes with all mentioned links: Episode Page

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00:00 Introduction.

07:44 What is the Aggregate Discount Guarantee?

13:49 Why do the divergent list prices and the perverse incentives prevent the Aggregate Discount Guarantee from really limiting cost spread?

17:55 Why is it important for plan sponsors to check these drug cost prices, and how can employers check them?

23:56 What drives cost lower, and why does it change everything?

25:09 How does RxSaveCard work?

30:01 Do you need a PBM's permission to use RxSaveCard?

30:37 How does it look for employers/employees to use the RxSaveCard?