Another form of direct contracting is when a plan sponsor outsources the administrative systems and support functions required to operate as a PBM, to a third-party vendor. These vendors can operate “behind the scene” and enable the plan sponsor to “private label” the PBM services.
The benefits to the plan sponsor includes marketplace branding, local control of utilization, formulary design control, acquisition-based drug costs and full share of rebates and manufacturers’ incentives. As a result of these comprehensive support services, plan sponsor’s of almost any size can potentially benefit from these new arrangements and may represent a significant improvement over traditional service contracts.