Rx Drug Pricing & Rebate Fundamentals

1:00pm – 2:00pmAnalysis of the National Rebate Agreement and the Mechanics of the Rx Drug Rebate System

The Medicaid Drug Rebate Program (MDRP) is a program that includes Centers for Medicare & Medicaid Services (CMS), state Medicaid agencies, and participating drug manufacturers that helps to offset the Federal and state costs of most outpatient prescription drugs dispensed to Medicaid patients. ….
The program requires a drug manufacturer to enter into, and have in effect, a national rebate agreement with the Secretary of the Department of Health and Human Services (HHS) in exchange for state Medicaid coverage of most of the manufacturer’s drugs. ……

Manufacturers are required to report all covered outpatient drugs under their labeler code to the MDRP. Manufacturers may not be selective in reporting their National Drug Code’s (NDC) to the program. Manufacturers are then responsible for paying a rebate on those drugs for which payment was made under the state plan. These rebates are paid by drug manufacturers on a quarterly basis to states and are shared between the states and the Federal government to offset the overall cost of prescription drugs under the Medicaid Program.

In addition to signing a national rebate agreement, drug manufacturers are required to enter into agreements with two other Federal programs in order to have their drugs covered under Medicaid: a pricing agreement for the Section 340B Drug Pricing Program, administered by the Health Resources and Services Administration, and a master agreement with the Secretary of Veterans Affairs for the Federal Supply Schedule.

The National Rebate Agreement

• Understanding the agreement’s terms and purpose
• What is required to participate in the agreement?
• Why is participation in the Medicaid outpatient drug program contingent on participation in the PHS 340B and VA programs?
• How is the PHS 340B program linked to Medicaid?
• What relation does the agreement have to the Medicare Drug benefit? (i.e., Medicare Part B and Part D)

Mechanics of the Rx Drug Rebate System

• Survey of applicable drug pricing legislation such as the MMA, DRA, and ACA
• Overview of Medicaid, Medicare, and PHS 340B Programs relative to prescription drug coverage
• How is price established?
• How does the rebate system work?
• Under which of the payor systems are rebates available?
• Medicare
• Medicaid
• PHS
• VA
• DoD

2:00pm – 2:30pmAWP (Average Wholesale Price) and WAC (Wholesale Acquisition Cost): What You Need to Know

• How is AWP calculated?
• When is AWP still used?
• What is included in WAC, and when?
• Defining the relationship between AWP and WAC
• What are their roles in the calculation of Medicaid Rebates?

2:30pmBreak

2:45pm – 3:45pm Medicaid Pricing and Rebate 1.0: Key Terminology **

• Analysis of the Medicaid rebate system’s components:
• Best Price what is it and how is it calculated?
• How are the calculations different for generic products?
• recent court and regulatory developments
• AMP: what is it and how is it calculated?
• Defining “retail community pharmacy” class of trade
• what are the variables in AMP price calculation?
• URA: what is it and how is it calculated?
• CPIU: what is it and how is it calculated
• When is it triggered?
• Does it ever reset?
• Normal Pricing: when is it relevant to calculating URA?

3:45pm – 4:45pmMedicaid Pricing and Rebate 2.0: Complexities and Challenges

• Validating transactional data
• Ensuring the completeness of direct sales, indirect sales, price concession (rebates, discounts, etc.), fee, returns, and adjustment data
• Analyzing AMP and BP included and excluded transaction types
• Customary Prompt Pay Discounts (CPPD)
• Chargebacks
• Commercial rebates – when and how are they included?
• Rebates for drugs reimbursed through federal government programs
• Rebates for drugs reimbursed through SPAPs
• Manufacturer coupons, vouchers, and Patient Assistance Programs (PAPs)
• Free goods – same product, other Medicaid product, and other items
• Sales at nominal prices
• Invoice adjustments: Returns, price corrections and order corrections
• Understanding what constitutes a bundle arrangement and developing an unbundling methodology
• Developing a smoothing methodology for lagged sales and concessions
• Employing the 5(i) alternate AMP calculation
• AMP calculation for non-5i products not generally sold to the retail community pharmacy COT
• Calculating AMP and identifying Best Price for Authorized Generics
• URA calculations for line extension products

4:45pm – 5:15pmRecap and Q & A

5:15pmEnd of Monday Session

1:00pmAnalysis of Key Aspects of CMS’ Finalized MDRP Rule

The panel will analyze developments coming out of the CMS’ MDRP rule that was finalized in December 2020. Highlights will include the background for these proposals, the challenges which they present, and how the rule could affect price reporting and business operations. Among the topics covered will be:

• PBM accumulator programs
• Impact on price reporting for MA Plans
• Value-based purchasing arrangements
• Reporting multiple BPs
• Line extensions, and Authorized Generics

1:45pmBreak

2:00pm Analysis of Proposed Changes to the MDRP Under CMS’s Recently Proposed Rule

In May 2023, CMS issued a Proposed Rule that would radically alter the Medicaid Drug Rebate Program. This session will provide an in-depth analysis of several key portions under the proposed Rule and their implications for drug manufacturers.

. Point of discussion will include:

• Analysis and overview of the Medicaid Program; Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program Proposed Rule
• Examining the proposed new definition for misclassification
• Exploring how proposals for aggregation or stacking of concessions would change how best price is set
• Analyzing proposed new definitions for CODs, manufacturer, and market date
• Understanding how the proposed new annual drug price verification survey would impact reporting obligations
• Contemplating the effect of proposed time limits on manufacturer audits and drug cost transparency requirements with certain managed care contracts
• Assessing the probability of possible suspension from National Drug Rebate Agreement (NDRA) for late reporting
• Reviewing comment submissions and what we can glean from them

3:15pmCompendium of State Drug Transparency Laws

This session will explore the rise of state transparency laws across the country and how they are working in conjunction with government payor programs.

• Identifying states with current and pending drug pricing transparency laws
• Manufacturer notifications and justifications requirements from the manufacturer
• Enforcement and actions taken under existing laws
• Addressing challenges with and finding solutions for reporting under non-uniform and sometimes conflicting state laws
• Can a state request supplemental rebates within these models?
• If the rebate is denied, can the state exclude the drug from Medicaid coverage?
• Developing a system to keep track of these laws as well as a compliance program to address them
• Impact of transparency laws on Medicaid pricing

4:00pmRecap and Q & A

4:30pmEnd of Wednesday Session

1:00pm -2:00pmPHS 340B 1.0 – Pricing and Reimbursement Under the Public Health Service 340B Program and The Link to Medicaid Rebate

• What is a PHS 340B covered entity and why do they receive special pricing on drugs?
• Who qualifies as a 340B covered entity and for 340B pricing?
• What steps does a 340B covered entity need to take to qualify for the program’s benefits?
• How do discounts to customers affect 340B prices?
• Re-packaging and re-labeling: understanding how they affect pricing in the context of 340B
• What impact do GPO arrangements have on covered entities access to 340B prices?
• When must 340B pricing be offered on orphan drugs?

2:00pmBreak

2:15pm-3:30pmPHS 340B 2.0

Operational Challenges:

• Examining the implications of the Supreme Court’s decision discontinuing reimbursement cuts to 340B hospitals and understanding how this impacts manufacturers
• Analyzing important amendments to PHS 340B under the CMP final rule and how they affected pricing and rebates
• Penny pricing
• Limited distribution drugs
• Calculation of the 340B price
• Validating the eligibility of purchasers
• Developing best practices for monitoring HRSA data
• Distinguishing 340B sales from non-340B sales made to entities that fill both types of prescriptions
• What data sources can manufacturers look to when attempting to make these distinctions?

Legal Challenges:

• Restrictions for participating covered entities
• The anti-diversion provisions
• Exploring HRSA’s limited authority to enforce the 340B program
• Examining manufacturers’ obligation, or lack thereof, to offer 340B pricing on drugs dispensed by contract pharmacies
• Implications of recent cases
• Protecting against duplicate discounts
• Assessing the considerations around using rebates in the 340B program pros and cons of turning 340B into a rebate program
• Examining current trends and updates on recent developments and whether agency guidance is enforceable
• Evaluating the likelihood of future government audits of covered entities
• Contract pharmacy developments

3:30pm-4:00pmRecap and Q & A

4:00pmEnd of Monday Session

1:00pm-2:15pmA Guide to the Essentials of FSS Contracting for Pharmaceuticals with the VA and DOD

• Examining overall obligations when contracting with the federal government with respect to:
• General Services Administration (GSA) Federal Supply Schedule (FSS): what are the requirements?
• VA (Veteran’s Affairs)/ DOD (Department of Defense)
• Tricare
• PHS – 340B
• Understanding the significance of bifurcated tracks and when they are used
• How is non-FAMP (non-Federal Average Manufacturer Price) calculated?
• how do you calculate the FSS price from non-FAMP?
• which entities are eligible?

2:15pmBreak

2:30pm-3:45pm Advanced VA and DOD Pricing and Contracting

• Specialized arrangements for personalized medicines
• Reviewing criteria for a drug to be eligible for consideration under the FSS
• Standardization versus therapeutic interchange contracts
• Analyzing how target drugs are chosen by VA/DoD/IHS/BOP for joint national contract targets
• What are the general requirements for issuing a drug contract?
• Package size considerations
• Bottle caps
• Safety seals
• 30% up front requirement for VA mail order
• Understanding the factors for creating the requirements in the estimated volume of purchase
• Formulary status changes
• Automatic substitution by Pharmaceutical Prime Vendor
• Changes with pricing for other drugs in the class
• Examining the contracting process
  • Pre-solicitation
  • Solicitations
  • Post-Solicitation discussions
• What is the process for having the contract for a drug renewed?
• Identifying the factors considered by the agencies when a drug is up for renewal
  • Supply considerations and challenges
  • Comparative pricing
• Understanding the differences in the processes used by the VA National Acquisition Center and Defense Logistics Agency

3:45pm-4:15pmRecap and Q & A

4:15pmEnd of Wednesday Session

1:00pm-2:15pmThe Inflation Reduction Act (IRA): An In-Depth Review of Changes to Medicare Pricing under the IRA

The Inflation Reduction Act (IRA) marked a monumental shift in Medicare and to some extent Medicaid drug pricing policy. The drug pricing provisions set out in the IRA are complex and include a slate of new obligations and considerations for pharmaceutical manufacturers, most notably mandatory pricing negotiations on the costliest drugs. This session will provide a timely analysis of drug pricing provisions under the IRA as well as current and projected impacts on drug manufacturers and the pharmaceutical industry at large. Key points of discussion include:

• Break down the Inflation Reduction Act
• Determining the impact of IRA on Medicare drug pricing
• Examining concerns from Medicaid and dual-eligible
• Understanding CMS’s negotiation of maximum fair prices under Medicare Parts B and D
• Examining Inflation rebates payable under Part B and D
• Analysis of Part D re-design, including new manufacturer discounts
• Examining what has currently been implemented under the IRA
• Anticipating what’s ahead and what will be implemented
• Dissecting the misconceptions of the IRA
• Examining key provisions in the IRA for manufacturers to consider
• Identifying what drugs will be subject to negotiation
• Negotiation timelines and process
• Enforcement provisions
• Analysis of the implications for drug manufacturers
• Maximum fair price calculations
• Understanding the mechanics of inflation rebate calculations for Medicare Part B and D
• Understanding of how drug pricing reforms will be applied in the real word through hypothetical examples

2:15pmBreak

2:30pm-3:30pmMedicare Part B: Coverages and Rebate and Pricing Essentials

• Identifying drug coverages under Medicare Part B
• Understanding Part B reimbursement methodologies, coverage and coding
• Average Sales Price (ASP)
• Recognizing the differences in coverage, pricing and coding among various outpatient settings
• Calculation of ASP
• Inclusions and exclusions
• Exempt and non-exempt sales
• Smoothing
• The three-quarter lag
• Free goods
• Patient assistance
• Submission of ASP data: timing
• How late filed ASPs are dealt with when calculations are done?
• Bundling
• Reimbursement under Part B
• Congressional changes the reimbursement for Part B drugs
• Reimbursement of generic specialty drugs
• Biosimilars
• Analyzing the Medicare Part B Drug Wastage Rule
• Exploring the interplay between the IRA and the Drug Wastage Rule

3:30pm-4:15pmMedicare Part D: Coverages and Rebate Pricing Essentials

• Identifying coverages under Part D
• Understanding the mechanics of Part D
• What subsidies and payments do Part D plans receive?
• Interaction with 28% Retiree Drug Subsidy and commercial rebates
• Reporting of Part D rebates and PBM administrative fees
• Reviewing Part D fraud and abuse concerns
• Examining Part D formulary requirements
• Developing rebate contracting strategies under Part D
• Taking advantage of plan Star Ratings
• Accounting for specialty pharmaceuticals
• Assessing potential legislative changes
• Understanding the CMS program design relative to the Part D Coverage Gap Discount
• Managing the logistics of payments to multiple plan sponsors
• Assessing CGDP payment disputes
• Conducting CGDP audits

4:15pm-4:45pmRecap and Q & A

4:45pmEnd of Monday Session

1:00pm-2:15pmUnderstanding How Co-Pay Coupons, Accelerators, and Maximizers Impact Medicaid and Medicare Pricing and Rebates

• Defining coupons, accelerators and maximizers and examining their similarities and differences
• How are the parameters for such discount mechanisms set?
• Reviewing these mechanisms as a whole and understanding how they are supposed to affect Medicaid best price liability
• In what ways do these mechanisms impact out of pocket expenses?
• How do these mechanisms affect patients in the public payor realm
• Exploring the process for working with a coupon vendor
• What are the types of pharmaceuticals and biologics sold under these mechanisms?
• How do these mechanisms effect specialty products?
• Reviewing recent litigation surrounding the use of co-pay coupons

2:15pm-2:45pmHow to Negotiate the Maximum Fair Price Under Medicare Part B and D

• Identifying selected drugs which will fall under the maximum fair price requirement category
• Analyzing the fair pricing requirement
• Detailing the HHS negotiation process and timeline
• Understanding the significance of the shift in responsibility to identify MFP
• Calculating maximum fair pricing and why it is important to the negotiation requirement

2:45pmBreak

3:00pm-4:00pmSimplifying Inflation Rebate Penalties Under Medicare Part B and D

• Understanding IRA inflation rebate requirements for Part B drugs and its relationship to ASP
• Examining the IRA inflation rebate requirement for Part D drugs and its relationship to AMP
• Analyzing the benchwork periods for evaluating inflation for both existing and new drugs
• Evaluating what utilization is and is not subject to the rebate requirements
• Working through the mechanics of precisely how the rebates are calculated
• Exploring penalties for manufacturers who do not comply with new rebate provisions
• Looking at the impact and interplay of the IRA inflation rebates on commercial sales

4:00pm-4:45pmLAB – Learn, Apply, and Benchmark: Pricing and Rebate Exercise Under Medicaid, Medicare, and 340B

This hands-on session will draw from hypothetical examples to show how the pricing and reimbursement concepts you have just learned about fit together in the real world.

4:45pm-5:15pm Recap and Q & A

5:15pmEnd of Session

1:00pm-2:15pmWill Your Product Be Eligible for Reimbursement? Pre-Commercialization Concerns in New Therapeutic Development

New considerations:

• Understanding the distinction between FDA approval and commercial viability
• Planning to secure appropriate coding, coverage and reimbursement for new products
• Assessing the competition landscape and articulating a compelling value composition

Questions to ask now:

• When should you start talking to payors about coding, coverage and reimbursement?
• What are the limitations on discussing coding, coverage, and reimbursement with prescribers?
• How can you stay compliant when marketing a new product in light of those restrictions?
• What types of products are drug, biotech, and biopharmaceutical companies seeking to develop now and why?
• What regulatory and commercial impediments are preventing these companies from pursuing the development of the desired product?
• Will the product/technology be covered through government payor/pricing methodologies?

2:15pmBreak

2:30pm-3:45pmNew Product Launch – Government Pricing and Contracting Considerations

• Identifying the steps generally involved in setting a launch price for a new drug
• Understanding the role of the pricing committee and other key stakeholders
• Understanding legal, policy, and reputational risks around price setting
• Exploring the uses of list prices versus other pricing metrics in supply chain agreements
• What is the role of pricing in connection with drug reimbursement under the Medicaid Drug Rebate Program, Medicare Program, 340B program, and the VA/FSS?

3:45pm-4:15pmRecap and Q & A

4:15pmEnd of Monday Session

1:00pm-2:15pmUpcoming Changes in U.S. Biopharma Pricing and Access

• Understanding key variables in the determination of value to key stakeholders
• What is a value proposition?
• Identifying databases of pharmaceutical benchmark prices for economic analyses
• Communicating why your medical product is worth paying for in quantitative terms

2:15pmBreak

2:30pm-3:30pmDelving Deeper into Critical Drug Pricing-Related Pre-Launch Considerations

This session will cover the many pre-launch drug pricing related considerations that can either help smooth the path to a successful launch or cause ongoing challenges. This session will address the role the following elements play in drug pricing:

• FDA considerations (e.g., approval pathway, special designations, or patient populations)
• Method and setting of administration
• Unit of measure/dosage form
• Billing codes
• Payor program (dis)alignment, including formulary and prior authorization considerations as part of market access strategy
• Targeted patient population
• Likely customer type(s) and channel partners and types of common pricing arrangements with these partners

3:30pm-4:00pmRecap and Q & A

4:00pmEnd of Wednesday Session and Series