MedImpact Introduces PMPM Pricing Model to Offer Predictable Drug Costs

MedImpact, an independent pharmacy benefits provider, launched a new per member, per month (PMPM) pricing program today designed to give health plans more predictable drug costs while linking the company’s administrative fees directly to performance.

Rising pharmacy costs are a key driver behind the need for more predictable pricing models. According to a recent report by SmithRx, pharmacy spending is the fastest-growing component of employer health benefit costs, increasing 7.7% in 2024 after an 8.4% rise in 2023 and totaling $805.9 billion in the U.S., a 10.2% jump from the previous year.

Specialty medications, which serve relatively few patients, account for nearly half of this spending, adding pressure on employer-sponsored health plans.

At the same time, employers are increasingly seeking transparency and predictability from their pharmacy benefit managers (PBMs). Traditional rebate-driven PBM models are often seen as opaque, making approaches with pass-through pricing, fixed administrative fees and performance guarantees increasingly attractive to help control costs and improve budget planning

According to Capital Rx, this pricing program is one of the most common ways employers and other payers track pharmacy spending, as it represents the true total cost of a service by combining unit price and drug mix to create predictability. Not all PMPMs are calculated the same way, and excluding administrative fees or using arbitrary savings measures can create confusion for plan sponsors.

A well-structured PMPM guarantee aligns the PBM’s incentives with the client’s goals, holds the PBM accountable for managing formulary and clinical programs and gives employers a clearer picture of their expected costs.

The MedImpact OnePrice program will bundle several cost-containment strategies into a single, transparent monthly fee. Unlike others on the market, MedImpact places its entire administrative fee at risk if the PMPM targets are not met.

“The MedImpact OnePrice program is our answer to the market’s demand for cost certainty, accountability, and savings,” Zach Johnson, executive vice president of MedImpact, said in the announcement. “We believe so strongly in the effectiveness of our clinical and cost-savings strategies that we’re putting our entire administrative fee on the line.”

The initiative is intended primarily for self-insured health plans seeking to control pharmacy spending without affecting patient access or clinical outcomes. According to MedImpact, OnePrice combines its most effective programs into a single package and could reduce client costs by as much as 20%.

The OnePrice program will combine several cost-containment strategies into a single, transparent monthly fee. Clients receive full pass-through of rebates and manufacturer discounts, a guaranteed monthly PMPM that simplifies budgeting, and a fixed administrative fee entirely tied to achieving the PMPM target.

The program also uses formulary alignment, utilization management, copay assistance for specialty and non-specialty drugs, a discount card and management of high-cost generic medications. PMPM rates are put together annually to account for changes in drug prices, population trends and new medications entering the market.

MedImpact will calculate its OnePrice guarantee based on a client’s claims data from the previous 12 months, adjusted annually for market and population changes.

“Accountability and transparency are touchstones of our company,” Johnson said. “MedImpact OnePrice is our way of proving it—by aligning our fees with client success to deliver real value.”

The model is part of a broader trend in the PBM industry, where plan sponsors are increasingly seeking predictable costs and performance guarantees rather than traditional per-prescription pricing models.

Experts note that while bundled pricing can help with budget planning, it also requires careful analysis of claims data and drug trends to set realistic targets. They add that the risk-sharing approach, where a provider puts its own fees at stake, is relatively rare in the pharmacy benefits space.

By introducing a predictable, performance-backed PMPM model, MedImpact is aiming to help health plans manage rising drug costs while maintaining clinical quality and member access. The company said the approach can improve planning for health plan budgets and give plan sponsors greater confidence in managing their pharmacy benefit expenses.