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Bringing clarity to pharma compliance

March 17, 2020

By Kelly Walter, Vice President of Sales, Life Sciences, Model N

Are you paying just what you owe on government and managed care contracts? For many drug manufacturers, the answer is no. Over the past five years, twice as many overcharge cases have been brought against manufacturers than in the prior decade. On average, each overcharge penalty has resulted in a $7.35 million payout plus negative press and tarnished brands.

As the largest payer for prescription drugs, the U.S. government has implemented numerous regulations to ensure enrollees in government programs like Medicare, Medicaid, and the VA receive the best price. With the rising costs of healthcare and growing enrollment in government healthcare programs, regulations are becoming increasingly more complex, so it’s no surprise that manufacturers are struggling to implement efficient processes to ensure timely and accurate pricing and rebate processing.

Penalties for noncompliance aren’t limited to government contracts. Pharma organizations pay an average of 25-31% of revenue in rebates, with heavy penalties for late payments. These rebates also have increased in complexity as they become more innovative and value-based.

The Guide to Revenue Execution for Pharmaceutical Manufacturers explains how organizations that automate their revenue execution processes can ensure regulatory and contract compliance and maximize their profitable revenue. By systematically building an approach that will streamline processes, enable people, and leverage specially designed software, pharma companies are able to:

  • Align commercial and government price management
  • Accurately calculate every transaction, price, rebate, and adjustment
  • See in real time what is happening with chargebacks, contracts, pricing, and compliance
  • Easily incorporate changes to government pricing and reporting regulations to avoid noncompliance

Through Model N Revenue Cloud, GP, and Medicaid, we are providing pharma companies with a flexible, end-to-end revenue management solution that enables them to accurately and efficiently calculate government prices and pay Medicaid claims. Read the Guide to Revenue Execution for Pharmaceutical Manufacturers to see what tools and processes you can put in place to mitigate revenue risk associated with government pricing, Medicaid, and provider and payer contracts.

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