Aligning PBM Strategy With Direct Contracting

Most direct contracting strategies start on the medical side and stay there.

Meanwhile, pharmacy—especially specialty—keeps growing quietly in the background.

Left alone, that split can create awkward situations:

• Members get a best-in-class direct pathway for surgery, then hit opaque specialty pricing.
• Medical and pharmacy savings stories compete instead of reinforcing each other.

You do not need a single vendor for both domains.

But you do need a coherent story about how PBM strategy and direct contracts fit together.

Map the overlapping spend

Start by understanding where medical and pharmacy costs collide:

• Oncology
• Inflammatory conditions (RA, Crohn’s, psoriasis)
• Rare disease therapies

For each, look at:

• Medical spend (infusions, facility fees, related procedures)
• Pharmacy spend (buy-and-bill drugs, specialty pharmacy fills)

The question is simple:

“Where are we paying twice for infrastructure around the same patient journey?”

Understand how your PBM is paid

PBM economics affect your direct contracting leverage.

Common PBM revenue streams:

• Spread pricing
• Rebates
• Administrative fees

If your PBM profits from higher drug list prices and volume, they may be neutral—or quietly resistant—when you try to move certain services into tightly priced direct contracts.

That does not mean you cannot do it. It does mean you should:

• Ask for full pass-through models where possible.
• Push for transparency on specialty drug acquisition costs.
• Make sure your PBM contract does not penalize you for shifting appropriate volume to buy-and-bill or alternative sites.

Coordinate site-of-care strategies

Many employers run site-of-care optimization efforts in parallel with direct contracts.

Bring them together:

• For infusion-heavy therapies, align your PBM, TPA, and direct contract partners on preferred sites (hospital outpatient vs. physician office vs. ambulatory centers).
• Use direct contracts to secure better facility and administration pricing.
• Use PBM levers to manage the drug component.

The member should experience this as one coherent program, not three separate initiatives.

Design member incentives across medical and pharmacy

If a member hears, “Use this direct path for your procedure, but call a completely different team and pay a different structure for your drugs,” they will be confused—and less trusting.

Look for ways to:

• Align cost sharing for infusion services and associated drugs.
• Use a single navigation entry point that can handle both medical and pharmacy questions.
• Communicate the whole episode in one story.

Even small moves, like harmonizing copays or out-of-pocket caps across domains, can make the program feel more intentional.

Watch for perverse incentives

Misalignment can sneak in:

• A PBM may steer toward certain specialty pharmacies that conflict with your preferred sites in a direct contract.
• A direct contract may encourage more frequent infusions without visibility into total drug cost.

Mitigate by:

• Sharing enough data between PBM, TPA, and direct contract partners to spot these patterns.
• Establishing simple guardrails (e.g., total cost per episode vs. baseline) that everyone can see.

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Direct contracting is not just a facility and professional story.

If you ignore pharmacy, especially specialty, you risk optimizing one half of the spend while the other half keeps climbing.

Aligning PBM and direct contracting strategies does not require a perfect integration.

It requires a shared view of the member journey and a willingness to design around it instead of around vendor silos.