Monday, March 31, 2014

#GPSummit14: Day 3

Our live coverage from IIR's 6th Annual Government Programs Summit has been provided by Katie Lapins, Director, Huron Consulting Group and Lori Greene, Manager, Huron Consulting Group . 

It is the last day of IIR’s GP Summit with a focus on the 340B Program and it was well worth it to stick around.  Commander Krista Pedley, from the Office of Pharmacy Affairs (“OPA”), took us through the recent audits of Covered Entities (“CEs”).  Of significance is the number of CEs found to be requesting a Medicaid rebate for product purchased through the 340B program (“duplicate discounts”) and those diverting product purchased at the 340B discount for inpatient utilization (“diversion”).  Full audit results will soon be up on the OPA website along with the correction plans to be implemented by the CEs and CEs found to be violating terms of their agreements are required to submit their corrective action plan within 60 days of the findings or they face exclusion from the 340B program.

On the manufacturer side, the OPA is conducting its first manufacturer audit and is also developing documentation to assist manufacturers in their preparations for an OPA audit.  Manufacturers such as Daiichi Sankyo and Pfizer shared their experience in identifying duplicate payments and as Ed McAdam from Daiichi Sankyo stated, there is no silver bullet to fix this issue, but is a worthwhile investment for manufacturers to audit 340B transactions at least twice a year.  Not doing so means manufacturers could be “leaving money on the table.”  Identifying duplicate discounts and diversion may require a significant effort on behalf of the manufacturer, including the purchase of third party data in some instances, but the return on investment for many manufacturers has been worth it.

One other recent area getting additional attention is Gross-to-Net which was covered by Ankur Bansal from Alliance Life Science.   Bansal walked attendees through optimizing Gross-to-Net to help with accurately project Best Price the impacts of Medicaid liability.  With price increases, many manufacturers plot out the Best Price for three to five years and project sales by customer.  Pricing strategy teams that include marketing, contracting, brand management, and government pricing, can be important for manufacturers to fully understand the impact of price changes.  A price increase or decrease will usually have an impact on some, if not all, of the government price points, therefore, all price changes should include a comprehensive review, customer-by-customer and product-by-product, to understand the overall effect of the price change.  Ultimately, manufacturers want to find the “sweet spot” where revenues from both the commercial and government businesses are maximized.

As always, the IIR GP Summit was a success and we look forward to seeing you at MDRP in September and next year's GP Summit.

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