Data-Driven Insights

‘Colleague Connect’ Session Summary

October 30, 2014   |   Jennifer Guinan

Branded Pharma Fee

‘Colleague Connect’ Session Summary

[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][info_box title=”” image=”” animate=””]Revenue Analytics Collaborative Members,

Thank you for your participation and encouragement. The Revenue Analytics Collaborative is growing rapidly! This increases the power and value of sharing our collective knowledge!

daVIZta hosts informal ‘Colleague Connect’ sessions and one of our most recent sessions was for Branded Pharma Fee. Below are some brief summary discussion points. These are not the opinion or recommendations of daVIZta, only an anonymous sharing of the industry colleague’s collective knowledge and insight.

daVIZta facilitates these Government, Commercial or Gross-to-Net discussions, as well as, often provides industry research and insight on each topic. Please contact Jen Sharpe at jsharpe@davizta.com to bring to light a new hot topic, industry pain point AND/OR to follow-up on any Revenue Analytics Collaborative e-mail communications.

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Branded Pharma Fee: Industry Colleague Summary of Discussion Points:

9 industry colleagues joined the call from large/small to brand/generic pharma/biotech.

General Observations:

  • Struggling to trend Government Sales for generics
  • Authorized generics (AGs) missing from calculation, IRS updated final invoice
  • No business in a Government segment, but the IRS still invoiced.
  • Reminder to industry, if the top is wrong, the bottom is wrong, shouldn’t impact your liability.

Disputes:

  • Slow and Steady Process, IRS was responsive and inclusion/exclusion issue was resolved
  • Disputed sales, no response, but numerator was fixed in final invoice
  • Outrageous volume of Part D utilization, disputed, no response, numerator was not fixed in final invoice – hard to prove non-contracted sales.

 Forecasting thoughts:

Numerator

  • Using contracted sales information and ‘grossing-up’ to account for non-contracted based upon ratio of contracted to pharma fee invoice numerator in recent invoices.
  • % of sales methodology using the history from IMS SmartData.

Denominator

  • Collectively, no one forecasted a decline in denominator
  • Using the national health statistics non-private statistics, showing minimal growth. CMS has updated prior years, the data keeps changing.
  • Used IMS projected growth, rather than using CMS. It was based on market spend.
  • Pharma Fee forecasting evaluation done by third party and yielded minimal growth in denominator – market spend tempered by LOEs stabilized.
  • Hold denominator flat – nothing concrete to drive increase/decrease.

Preliminary and Final Bill Differences:

  • Track Pharma Fee liability two-fold – what will be paid this year versus what is my forecasted of the liability for the current year.
  • Depending on growth/decline of your product portfolio you may pay too much or too little upfront.
  • If you pay too much – consensus is to use Short Term Pre-Paid
  • Assuming the preliminary and final bill are the same.
  • Accruing to what the final invoice will be, inclusive of the true-up.
  • Majority booking accrual monthly, a few once, at year-end

Acquisition Considerations:

Tricky when you acquire a company that is not Pharma Fee eligible – contact Jen Sharpe if you have this concern and want to connect with similar colleagues.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]