US health care is exponentially more complicated today than just 5 years ago. Even the most competent, experienced marketing teams may not anticipate or clearly understand the complex forces that are changing how we select, dispense, and reimburse for drugs and devices.
Changes in Traditional Customers
Pharmacy Benefit Managers (PBM) are your primary contracting conduit into commercial and Medicare Part D plans to assure formulary market access. The FTC approved the $29.1 billion ESI-Medco merger, further consolidating the PBM group. If your new product is not granted preferential access on a national PBM, you may be losing access to 70 million patients. Continue reading
At Covance, we know that you, the pharmaceutical manufacturer, must deal with an increasingly complex marketplace. One of the current challenges is the 340B Drug Pricing Program (340B). In this article, we briefly review 340B and then discuss three aspects that affect you:
- The major challenges you face under this program
- Strategic recommendations for dealing with these challenges
- Important criteria to consider when selecting a partner to assist you with the 340B program
The 340B Drug Pricing Program
What is 340B?
The 340B program is a drug-pricing plan administered by the Health Resources & Services Administration (HRSA), a division of the Department of Health and Human Services (HHS). Eligible drugs include FDA-approved drugs, OTC written on a prescription, biological products that can be dispensed only by a prescription (excluding vaccines), and FDA-approved insulin. Continue reading
Under the Health and Human Services (HHS) 340B Drug Pricing Program, drug manufacturers who participate in the Medicaid Drug Rebate program must also provide covered outpatient drugs to eligible Covered Entities (CE) at considerably reduced prices. Manufacturers face several challenges when participating in the 340B program.
Covered Entities First, manufacturers need accurate accounting from Covered Entities (CE) for refund payments. Health Resources and Services Administration (HRSA) has increased scrutiny around the program and conducted targeted audits. CEs are performing internal audits to better understand any non-compliance, taking steps to “self disclose’ non-compliance activity, and proactively sending manufacturers refund payments. However, the supporting data provided by the CE may lack adequate information for manufacturers to accurately account and apply the refund payment. It is also possible that government pricing restatements will be required. Continue reading
Are your infrastructure, staff and processes up to the task of tracking today’s managed market contracts, chargebacks and rebates, and complying with government regulations?
Protect your revenue
Changes in managed markets are imposing the development of even more complex contracts with distributors, pharmacy benefits managers (PBMs), third-party payers and government agencies. Add to that the cost pressures that reduce available resources, and the required new investment in technology to track it, you’re facing a harder time achieving goals and staying profitable.
Learn more about protecting your revenue.
Pharmaceutical manufacturers are operating in a highly competitive, complex and regulated market where the effective management of contracts, pricing, and rebates is vital to the overall health of their business. Without the right contracting infrastructure and processes in place, companies risk losing visibility and control over the contract lifecycle management, which can ultimately lead to revenue loss and non-compliance with government regulations.
Currently, the economic environment is challenging pharmaceutical manufacturers to grow amidst the reality of budget cuts and staff reductions. As contract scenarios become more complex, and companies lack the resources they once had, greater visibility into contract performance is even more critical. Administrative costs for pharmaceutical manufacturers are also increasing. A study conducted in 2012 by Deloitte confirmed that the cost for managing chargebacks and the rebate process is targeted to increase approximately 54% over the next five years. Continue reading