BIG FOUR Pharmaceutical Pricing Boot Camp

This pre-conference workshop will introduce attendees to the laws, regulations, and pricing methodologies utilized by the “Big Four” agencies as the basis for contract and formulary determinations. This is an essential course of study for new pharmaceutical pricing practitioners and is a comprehensive refresher on core concepts for the industry veteran.

• Identifying the “Big Four” agencies: VA, DoD, PHS, and Coast Guard
• Examining the Federal Acquisition Regulation (FAR) and its relation to government procurement and “Big Four” contracting
• Exploring the Department of Veterans Affairs’ delegated authority in relation to FSS pharmaceutical contracts
• Comprehending the mechanics of FSS contracts and the associated timelines
• Understanding reporting requirements when contracting with the “Big Four” and compliance best practices
  • Completing CSP and related disclosure requirements
• Identifying FSS eligible entities
• Complying with FSS clauses regarding socioeconomic programs
• Entering into the Master Agreement (MA) and a Pharmaceutical Pricing Agreement (PPA)
• Examining non-FAMP and FCP calculations
• Exploring the Veterans Health Care Act of 1992
  • Introduction to Section 602 – pricing for Public Health Services Act (PHS) covered entities
  • Section 603 – authorization for the VA to negotiate drug prices
• Examining terms which fall under each discount program
• Analyzing the Federal Supply Schedule related to government contracting in the pharmaceutical space
• Identifying key pricing terms related pricing within government pharmaceutical programs
  • Federal Ceiling Price (FCP)
  • Pharmacy benefits management programs (PBMs)
  • National formularies
  • VA National Formulary
  • DoD Uniform Formulary
• Assessing the functions of the PHS 340B program and identifying qualified entities
  • Examining the discounts available under the 340B program
  • Determining methods to monitor HRSA data
• Exploring the restrictions that exist for participating covered entities

In this opening session, our esteemed co-chairs will set the stage for the conference with highlights of the latest developments impacting the Big Four. Join us for an in-depth discussion on the latest regulatory developments, agency advances, and litigation updates impacting drug pricing within the “Big Four” agencies.

With the use of hypotheticals, this session will examine how to successfully enter contract(s) to make sales to the Big Four, what happens once the contract has been awarded, and how to have your contract successfully renewed.

• Implementing contracting fundamentals and meeting legal requirements when offering a contract proposal
• Hypothetical using mock products
• Developing guidelines for securing and maintaining contracting information
• Identifying the agencies entitled to make purchases off the FSS, and the pricing methodologies associated with each
• Consolidated Mail Outpatient Pharmacy System (CMOPS)
• Indian Health Services (IHS)
• Department of Defense (DoD)
• Sales through Prime Vendor Programs
• Assessing the reasons why government facilities may purchase a product from a PBM at a higher price than it is listed at on the FSS
• Putting strategies into place which encourage purchases directly from the manufacturer
• Examining how the FSS price is connected to discount benchmarks
• Analyzing the requirements when working with MCF pricing and the criteria associated with it
• Implementing clauses in pricing reductions to expand the opportunities of a product when working with FSS customers
• What initiates price reduction clauses
• What disclosures are required when working with the Basis of Award
• Methods to track changes to customer pricing requirements
• Determining the outcomes of refusal to comply with price reduction clauses
• Properly monitoring active buyers from government agencies
• Seeking Economic Price Adjustments

It is crucial to maintain a well-versed understanding of how government drug contracts are made and how drug price negotiations occur. This session will provide an overview of government drug payor programs. Points of discussion include:

• Overview of each government program and their requirements:
  • VA
  • PHS 340B
  • Medicare
  • Medicaid
• Understanding what beneficiary type falls under each program
  • What are the statutory discounts within each program
• Dissecting the difference between purchase-based programs and utilization based programs
• Highlighting the significance of Class of Trade (COT) in driving accurate calculation and reporting within each program
• Medicaid Drug Rebate Program (MDRP) Overview
  • Explanation of AMP
    • Additional AMP considerations
  • Explanation of BP
    • Additional BP considerations
  • Explanation of URA
• Medicare Overview
  • Part B Overview
    • Explanation of ASP
• 340B Overview
  • Which entity types are considered covered entities
  • 340B revenue erosion inflection points
    • Explanation of duplicate discounts
    • Explanation of diversion
• Department of Veterans Affairs Overview
  • Big4 and OGA Entities explained
  • Federal Supply Schedule overview
  • Significance of non-FAMP
  • Industrial Funding Fee explained

• Examining the framework for calculations and reporting requirements under VHCA Section 603
• What is VA Office responsible for this Program?
• When must these calculations be reported to the VA?
• Implementing the correct formula for calculating the FCP
• “Nuts and Bolts” of the Non-FAMP and FCP Calculations
• Analyzing the interplay between FCP and Non-FAMP
• Determining the role of the Non-Federal Average Manufacturers Price (Non-FAMP) within the contracting process and ensuring the proper calculations
• What are the ways in which changes to Medicaid calculations can affect non-FAMP calculations?
• Identifying the sources of data necessary to calculate the non-FAMP
• Best practices for data collection to ensure accurate calculations
• Exploring the abnormalities seen when calculating the non-FAMP, and their causes
• Examining how FCP affects discounts related to pharmaceutical pricing discounts within the “Big Four” agencies
• Assessing the role of the price reduction clause

Our speakers will go through multiple in-depth mock calculations and illuminate how manufacturers can overcome calculation challenges and irregularities. Points of discussion include:

• Preparing for irregularities when calculating prices
• Penny pricing
• “Smoothing” prices
• Notifying the VA of these irregularities
• Correctly calculating pricing while incorporating lagged price reductions
• Assessing additional discount adjustments based on calculations
• Developing pricing calculations for new and transferred pharmaceuticals
• Maintaining compliance when communicating price reductions with wholesalers
• Securing sub-ceiling and non-ceiling sales related to the 340B program
• Assessing best practices to maintain for price calculations

• Examining the audit process in relation to FSS contracting
• What does the VA OIG look for during the audit process?
• Scope of the audit – FCP applicable to VA and DoD
• Confidential Customer Contracts Claims
• Pre-award vs. Post-award Audits
• Determining a company’s obligations regarding record retention
• Avoiding actions that can result in costly penalties
• Efficiently conducting self-audits to ensure compliance
• Post award most important FAR/GSAR/VAAR clauses from a compliance standpoint
• Price Adjustments (Defective Pricing)
• Price Reductions
• Tracking Customer Price and Ratio
• Other potential FSS compliance traps
• Industrial Funding Fee
• Economic Price Adjustments
• Trade Agreements Act
• Modifications — Product Addition and Removal
• Potential penalties for non-compliance
• Key provisions of a compliance plan
• Enacting the proper steps for appealing decisions