Examining the case for direct contracting: A multistakeholder case study

Background: Employers and pharmacies are challenged by a complex system for prescription payment. Cost plus direct contracts for prescriptions and bundled services may yield benefits. Objectives: This study aimed to (1) explore direct contracting using multistakeholder interviews, (2) compare employer costs and employee copays for 6 months of prescription charges under their pharmacy benefit manager (PBM) with projected costs under a pharmacy direct contract, (3) project pharmacy revenue, costs, and net profit had these prescriptions been processed through the direct contract, and (4) assess employee satisfaction under the direct contract.Methods: Semistructured stakeholder interviews were recorded transcribed and analyzed to identify different perspectives on direct contracting. Employer PBM invoices for 412 employee prescriptions over 6 months were analyzed to calculate employer and employee costs and reanalyzed for the invoice cost plus $12 professional fee direct contract. For the pharmacy financial analysis projection, invoice costs and a $9.82 cost of dispensing were subtracted from total revenue to yield an estimated profit had the parties been under the arrangement. A 34-item satisfaction survey was mailed using a 4-contact design with cash incentives to the 20 employees serviced by the direct contract that were analyzed descriptively.Results: Eight stakeholder interviews described the benefits and potential challenges of such direct contracts. The financial analysis suggested the employer costs would be $5664 lower and employee copays would have been $1918 lower had all prescriptions been paid using the direct contract. The estimated profit for the pharmacy was projected at $899. Survey re-spondents were generally satisfied with the direct contract, but few used the bundled services.Conclusion: The direct contract may be financially beneficial for all parties. It also may offer more transparent pricing that may be desirable for the employer and pharmacy. Greater up -take of bundled services may increase the value to the employer. (c) 2023 American Pharmacists Association (R). Published by Elsevier Inc. All rights reserved.