Wednesday, September 21, 2016

MDRP 2016 Pre-Conference, Track C: The AMP Final Rule

It’s the most wonderful time of the year!  That’s right, MDRP Summit has kicked off at The Palmer House Hilton in Chicago and, despite the fact that the conference doesn’t officially kick off until Wednesday, the industry’s premier subject matter experts wasted no time providing their most valuable insights to the GP community.  After four years of waiting for the AMP Final Rule, and countless presentations urging us to be ready for it, we finally have some definitive language to review.  For those of us who have (obviously) read every word of the final rule, but want to make sure that we implemented all the key changes, the Track C: Full Day Symposium on The AMP Final Rule: Application, Implementation and Impact of the Final Rule provided the perfect prelude to the Summit.

Joe Birdsall of Dohmen Life Science Services kicked off the day by introducing a panel discussion on Deconstructing the AMP Final Rule: A Step by Step Analysis of the Key Implications of the Final Rule, moderated by Kristin Hicks of Arnold & Porter, with panelists Frank Prybeck (Celgene), Josh O’Harra (Eli Lilly), and Kave Niksefat (Amgen).  I always enjoy panel discussions because they give us a sense not just of the regulations, but of the day to day operational challenges manufacturers might face when implementing them.  Panelists discussed the pain of identifying Mail Order and Specialty Pharmacies, which might require a thorough review of contract language, or even picking up the phone to ask the entities what products and services they provide.  The participants also stressed the importance of establishing consistent processes, whether you are assigning class of trade or identifying 5i products, to ensure determinations are consistent and unbiased.

Next up was Christopher Schott of Hogan Lovells, with an excellent presentation on Identification & Alternate Rebate Formula for Line Extensions.  I was particularly excited for this session because I promised one of my clients, who was unfortunately unable to attend the Summit this year, that I would explain everything he need to know about calculating AMP for line extensions when I got back.  I was able to catch up with Chris after the session, and I will be posting a more thorough recap of his presentation and this topic after the conference for our readers at home.

John Shakow of King & Spalding was up next, expounding on everything we should know about 5i AMP, Eligibility, Calculations & Implications.  This is another area that has been a hot topic among my clients, as many manufacturers are acquiring new products, and may be identifying 5i products, performing the 70/30 determination, and calculating 5i AMP for the first time.  John demystified the calculation, providing a background on the genesis of 5i AMP, and reminding us that it’s really just a matter of inclusions and exclusions.  Oh, and there’s the pesky, monthly requirement to calculate when 5i eligible products are considered not generally dispensed through a retail community pharmacy.  Although some in the room disagreed, John suggested that manufacturers not back out their government sales when performing the 70/30 calculations, a position supported by language in the AMP Final Rule, to identify an accurate percentage of “not generally dispensed” sales.

The next two sessions, Bundling by John Gould of Arnold & Porter, and Impact of the Final Rule on COT with Jesse Mendelsohn and Dhirendra Jena of Model N, provided helpful insights for those responsible for GP within their organizations.  Perhaps more importantly, they identified other covered employees within pharmaceutical organizations who should be aware of the impact their contracting and operations decisions have on the company’s GP calculations.  It might not be a bad idea to review these presentations with your shared services groups to give them an idea of how their work impacts you.

Finally, King & Spalding and EY partnered up to close the Pre-Conference Day with Service Fees: Bona Fide or Constructive Price Concession?  They walked us through the four (seven?) part test for determining whether fees to wholesalers and other AMP, BP, and ASP eligible entities can be considered bona fide.  This is another presentation you might want to pass on to your colleagues after the Summit, particularly those in Managed Markets and Commercial Contracting – if they don’t modify their contracting strategies, you can at least be aware of what to expect.  As always, document your methodologies and reasonable assumptions to ensure that your results are consistent and transparent, and don’t be shy about soliciting advice and industry data from legal counsel and FMV consultants.

After we filled our brains with all the GP information we could handle, IIR officially welcomed us to Chicago with the Grand Opening Reception in the 4th floor exhibit hall.  As I made my way through the room catching up with old friends and colleagues, I couldn’t help but laugh at how far the booths have come since I began my career; it seems like just yesterday that I was awkwardly slapping Velcro panels to an un-structurally sound frame, but now the booths look seamlessly professional (some are even complete with interactive iPads!).  What hasn’t changed is the quality of the SMEs in the booths (and those roaming the room), who are ready to answer your questions and offer solutions to your most pressing problems.

That’s all for today, kids.  Stay tuned for live blog updates throughout the 2016 MDRP Summit, from your friendly neighborhood Government Pricing Specialists!

About the Author: Dana Z. Collins has worked in the Government Pricing space for almost a decade, as both a consultant and an in-house compliance professional.  As a GP consultant, Dana’s areas of primary focus are audits/assessments, training, ongoing calculations, Medicaid rebate processing, and policies/procedures – oh, and blogging.  After working with Katie Lapins, Principal/Owner of Government Pricing Specialists (GPS), on and off over the years, Dana joined GPS in 2016 and has never looked back.

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