What is PMPM in healthcare? 6 takeaways from Rightway’s PMPM pricing model webinar.

PMPM (Per-Member-Per-Month) is a healthcare payment model that charges a fixed fee for each enrolled member every month, offering predictable costs, improved budget stability, and clearer financial planning. By tying fees directly to member counts rather than drug volume, PMPM in healthcare aligns plan sponsor and PBM incentives around care outcomes and cost control.

Traditional PBM models often use confusing pricing practices and rebate structures, leaving plan sponsors uncertain about the actual value they’re receiving. Clear and accountable Per-Member-Per-Month (PMPM) models are emerging as a solution to prioritize spend guarantees, transparency, cost control, and alignment with plan sponsors' goals.

In our recent webinar, industry leaders Ashley Hasle, Scott Musial, Doug Isenberg, and Matt Jarvis shared how a PMPM model aligns PBM incentives with what matters most to employers: managing costs effectively and supporting members.

Here are the top 6 takeaways from the webinar.

1. How legacy PBMs prioritize profits over cost transparency.

Traditional PBMs have evolved from administrative platforms to complex revenue models with misaligned incentives. They've expanded into services like mail order, specialty pharmacy, and formulary management, creating opportunities to maximize their profits rather than focus on plan sponsor needs.

In contrast, the PMPM pricing model delivers predictable cost and fee structures with full transparency—eliminating hidden spread pricing and rebate retention—so employers know exactly what they’re paying each month.

2. Why flexibility matters in pharmacy benefit models.

Flexible strategies within your pharmacy benefits plan help keep pace with the dynamic nature of pharmacy benefits. This adaptability allows for timely adjustments to market shifts, new drug entries, and regulatory changes, ensuring uninterrupted member care.

3. The role of integrated pharmacists in the PBM model.

PBMs that embed pharmacists or offer high-touch pharmacy navigation within the care model provide members with personalized medication guidance. This approach improves health outcomes and reduces drug costs by helping members manage medications more effectively.

4. Prioritize aligned incentives in PBM models.

Traditional PBM models, often revenue-driven, are misaligned with plan sponsor goals. Choose models that prioritize cost control, clinical outcomes, and member experience over profit maximization.

5. Focus on overall cost management, not just rebates.

Move the emphasis from high rebate yields to overall cost management, as rebates alone do not guarantee savings for plan sponsors. Focusing on total drug spending can drive more effective pharmacy benefit outcomes.

6. Ensuring PBM accountability through a PMPM fee guarantee.

The PMPM guarantee model helps ensure PBM accountability by creating transparency and justification around the PBM's decisions. This aligns the PBM's incentives with the plan sponsor's goals and establishes a shared risk and reward structure that encourages the PBM to be a true partner in managing the pharmacy benefit. Compared to traditional PBM arrangements, the simplicity and clarity of the PMPM model also make it easier for plan sponsors to understand and hold the PBM accountable for its commitments.

How the PMPM pricing model works.

The PMPM pricing model charges a transparent, fixed rate per covered life regardless of utilization. Key benefits include:

• Predictable budgeting: Know your pharmacy spend in advance with a set fee per member per month.
• Aligned incentives: PBM and employer share accountability for managing costs and outcomes.
• Full transparency: No hidden spreads or retained rebates—fees and revenue sources are clear.
• Auditability: Easily review and verify all fees, utilization data, and performance metrics.
• Elimination of hidden costs: Removes practices like spread pricing and rebate retention that inflate plan expenses.

Rightway’s PMPM model is built on core tenets to redefine financial alignment and fiduciary responsibility. It addresses each cost element—unit cost, utilization, and site of service—while eliminating conflicts of interest through the absence of owned pharmacies, spread pricing, and rebate retention. By offering a fully auditable PMPM fee based on the number of covered lives, not utilization, Rightway ensures true transparency and accountability. Take control of your pharmacy benefits strategy with Rightway’s PMPM spend guarantee.

Watch the full webinar here.