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The importance of automating cost of treatment data analysis

by Pramod Kumar Mali , Consultant (Pricing & Market Access), Global Pricing Innovations September 19, 2022

In our previous post on state price transparency, we explored how pharmaceutical manufacturers can rely on Model N to help them streamline the reporting process and minimize the risk of non-compliance. Now we will discuss the importance of automating cost of treatment data analysis. 

Prescription drug prices in the U.S. are significantly higher than in other nations. While other countries’ drug prices are regulated (to a certain extent) by their governments, the U.S. allows free market dynamics to set drug prices. State drug price transparency reporting is one measure aimed at addressing drug price increases and controlling spend on pharmaceuticals.

State drug price transparency reporting

Several states have enacted drug pricing transparency laws, which require manufacturers, pharmacy benefit managers, and other entities to report information explaining high price increases and high-priced new drugs.

Over the past few years, around two dozen states have signed, or are in the process of signing into law, drug pricing transparency measures. These measures are designed to limit drug costs by establishing new compliance obligations that require manufacturers to report on drug prices and price increases.

Most states require manufacturers to report the wholesale acquisition cost (WAC) for a month’s treatment (30-day therapy) and whether these costs exceed a certain pricing threshold. For example, Utah has set the threshold of WAC increases at no more than 16% in two years or 10% in one year [Utah (SB 272) – 2020]. Manufacturers that increase the price of a drug at a rate that exceeds a defined threshold are required to report information regarding the drug and the price increase.

State drug price transparency reporting legislation requires a thorough understanding of the complexities and reasonable assumptions that will be required for compliant reporting. Careful data collation and analysis are necessary.

Cost of treatment data and state drug price transparency

To ensure compliance for the mandatory state drug price transparency reporting requirements, manufacturers need a reliable partner who can assemble, calculate, and maintain the relevant data for their portfolio. GPI has developed a systematic methodology for cost of treatment calculations in the U.S. (and across 90 global markets) in all therapy areas.

GPI has the expertise needed for accurate reporting and can provide a precise calculation of the cost of treatment across a manufacturers’ portfolio and a complete, standardized dataset that complies with state price transparency reporting mandates. To assist clients with correct and timely reporting, GPI leverages their:

  • Price and market access data analytics platform, GPI pulse™
  • Team of experienced pharmacists for precise interpretation of assumptions, calculations, and quality assurance
  • Data and dosing assumptions from official sources
  • Expertise in data collection, standardization, and integration

In addition to this, GPI incorporates preferred business rules and dosing assumptions with the flexibility to adapt to each state’s reporting requirements.

Configurable solution to meet reporting needs

GPI partnered with Model N, a leader in revenue optimization and compliance solutions, to help pharmaceutical manufacturers meet these unique reporting needs. Through a seamless integration of GPI data, the Model N State Price Transparency Management solution leverages GPI’s 30-day cost of treatment calculations to generate automated reports suitable for compliant reporting. You can adjust pricing strategies according to reporting thresholds and streamline two time-consuming processes by identifying when drug prices need to be reported. This highly configurable solution gives you the power to efficiently and effectively manage and meet the unique reporting needs of the vast set of state price transparency regulations.

You can find out more about GPI pulse™ and how GPI can assist with state drug price transparency reporting by visiting our dedicated page.

And be sure to watch for our final blog post on state price transparency, where you’ll learn how Model N State Price Transparency Management integrates with your existing Model N platform to create a comprehensive revenue management solution.


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