You may have heard references to government contract management or government pricing. In fact, the scope is broader than either term suggests, and requires substantial effort to remain compliant with the terms of the various government programs. In the United States, about 50 percent of prescriptions filled are paid through an assortment of state and federal government programs. The other half are primarily covered through some type of commercial health plans with a very small percentage paid for by cash buyers.
This means that for most pharmaceutical companies, it is critically important to evaluate and consider including government contracting as part of a comprehensive commercialization plan.
The process for securing most government contracts can be straightforward. But some require a complex, lengthy application process and have long lead times to secure an effective date. All of these programs will contractually require a pharmaceutical manufacturer to participate in rebate or discount programs, or some type of negotiated pricing scheme. These agreements require complex price computations and strict time constraints, and have significant financial penalties for noncompliance. It is critical that you follow a disciplined approach managed against a formal SOP to stay fully compliant.