Which contracts are the most common pricing arrangements for PBMs with clients?

Fee-for-service contracts are indeed the most common pricing arrangements for Pharmacy Benefit Managers (PBMs) with their clients. In these agreements, the PBMs charge a fee for each service they provide, such as processing claims or managing pharmacy networks. This model allows clients, such as employers or health plans, to pay only for the services they actually use, making the costs more transparent and predictable.

This approach is particularly appealing to clients because it aligns the PBMs' remuneration directly with the number of services rendered, encouraging efficiency and accountability. The fee-for-service structure also allows PBMs to offer a broader range of services and to customize their offerings to better meet the needs of different clients.

In contrast, other types of contracts, such as capitated or shared savings contracts, involve different risk-sharing models that may not provide the level of service granularity and direct cost correlation seen in fee-for-service arrangements. Comprehensive contracts could include a mix of both fees and other payment models, but they are less common than straightforward fee-for-service contracts in the current market landscape.