Government Pricing, Rebate Processing and Contract Management Support

Consider government contracting opportunities for your comprehensive commercialization plan.

Government PricingThis is the area of a commercialization plan commonly referred to as government contract management or government pricing. The range of work is actually much broader and requires that you engage in numerous activities to be compliant with the various government programs.

Approximately 90 percent of all prescriptions filled in the United States are generic products. Of those, more than 50 percent are paid through an assortment of state and federal government programs.

Most generic pharmaceutical manufacturers will find it important to evaluate and consider including government contracting as part of a comprehensive commercialization plan.

The processes for securing government contracts usually aren’t complicated. But contracts like the VA/FSS application process is an exception. It is complicated and requires a lengthy application process.

All of the programs contractually obligate you to participate in rebate or discount programs, or some type of negotiated pricing arrangement. Most programs contain multi-faceted price computations. The processes involve strict time constraints and subject you to penalties for noncompliance. If you decide to pursue government contracts, we encourage you to maintain fully compliant standard operation procedures (SOPs) to ensure you organize data, classify sales and compute government values properly.

Download a summary of our services for generic pharmaceutical manufacturers.

Services for Generic Manufacturers

The implications of entering into government contracts.

Typically, the government programs you will participate in as a generic pharmaceutical manufacturer are straightforward. Most manufacturers secure a CMS Medicaid Agreement as the default starter. It provides a pharma manufacturer with access to more than 75 million beneficiaries as of 2019.

Generic companies electing to participate in Medicaid are also required to enter into a Public Health Service (PHS) or 340B agreement. Depending upon a specific company’s commercial strategy, it may make sense to secure a VA/FSS, or Veteran’s Administration/Federal Supply Schedule agreement. However, this would not be typical. If your company has products that are physician-administered or injectable, an additional computation called ASP, or average sales price value, must be submitted regardless of whether or not you have government contracts in place.

Medicaid is the most demanding of the government programs in terms of required resources. Pharmaceutical companies must submit monthly and quarterly AMP calculations to CMS as well as to the several states requiring separate submissions. You use the AMP value to derive a URA, or Unit Rebate Amount, which represents the dollar value of rebates that must be paid for each unit of product dispensed to Medicaid beneficiaries. Without carefully assessing and scrubbing sales data then computing pricing values prescribed by your CMS Medicaid agreement, you will likely pay inappropriate overall rebates and be out of compliance. Read More on Medicaid. 

PHS/340B requires you to provide outpatient drugs to eligible health care facilities at a reduced price. Primarily, the work involved here has to do with reporting values to entities that a generic pharma company has contracted with on a quarterly basis and completing the submission upload files to the federal government.

All generic products are part of the 42-2A schedule designation on the VA/FSS, or Veterans Affairs/Federal Supply Schedule. This means that the pricing is negotiated between your pharmaceutical company and the VA/FSS. Typically, this price is equal or close to the lowest price offered to any customer.

Manufacturers with products that require physician administration or have injectables must compute and submit an average sales price (ASP) value. The calculation is similar to AMP. This value then becomes the basis for reimbursement for products dispensed to eligible Medicare beneficiaries. This requirement exists whether or not other government contracts are in place.

We provide full-service support for all activities required

Prescription Analytics provides comprehensive services and personalized support for government contracts and price computations. We manage all activities required for federal and state pharmaceutical programs, including but not limited to:

  • Completing all government required pricing computations and submissions to appropriate federal and state regulatory authorities
  • Reconciliation, payment and submission of rebate invoices and program discounts
  • Any and all legislative updates, as well as other regulatory changes relevant to pharmaceutical government contracting. A comprehensive summary of changes is sent to all PAI partners and customized assessments of business impact are discussed separately with each client.
  • Dispute resolution with all government entities.
  • Secure archival of all detailed historic datasets.