Friday, August 16, 2013

How GP Professionals Became Pharmaceutical Industry Change Agents

Today’s guest post is from Chris Cobourn, Senior Vice President, Commercial Compliance, at Compliance Implementation Services (CIS). In the article below, Chris outlines the pharma industry’s new government pricing (GP) challenges and the crucial role of GP professionals. He also summarizes today's crucial uncertainties.

Chris is a knowledgeable insider who speaks from deep experience. When I have a GP question, Chris is one of my go-to-experts. I’ve highlighted many of his articles over the years, most recently in AMP Final Rule Delayed to ... January 2014?

Chris and his colleagues will be at IIR’s Medicaid Drug Rebate Program (MDRP) Summit on September 9-11, 2013. Drug Channels readers can register for the conference with promo code XP1858DRC and save $400 off the standard registrations rates.

How GP Professionals Became Pharmaceutical Industry Change Agents
by Chris Cobourn, Senior Vice President, Commercial Compliance, CIS

When Dorothy landed in Oz, she said: “This isn’t Kansas anymore…” If a Government Pricing (GP) professional from 10 years ago was transported to 2013, he or she would also be in a strange new world!

In the past, GP professionals were a mystery. We read the available guidance, performed our calculations, and processed claims. We spoke an acronym-filled language that meant little to others in the finance department, contracting groups, and senior executives. The world of GP—primarily Medicaid, VA and PHS—meant little to most people.

Just as Dorothy’s black-and-white world changed overnight, the GP professional has now become key to strategic and compliance activity.

Government business is now a top priority. In 2007, change accelerated with the CMS Final Rule and its minimal certification requirements. Additional program requirements quickly followed, including TRICARE and the Patient Protection and Affordable Care Act (PPACA). Existing programs are expanding, new programs are being created, and the pharmaceutical manufacturer’s financial liability has increased exponentially. Program integrity became crucial. Manufactures face potentially devastating double- and triple-dipping, which can result in a manufacturer paying the government for its drug!

Finance and Contracting functions need GP professionals to help navigate this new environment—to understand what is happening today and what will happen tomorrow. Topics include gross-to-net computations, bona fide service fees (BFSF), fair market value (FMV), and script level validations. Accruals and forecasting have become high priority topics, with the lines blurring between the Commercial Contracting and Government functions.

When I started presenting my GP 101 courses years ago, participants only focused on compliance, administration, and operations. Now, C-level executives attend GP courses. Their jaws drop when they realize GP’s importance to their businesses.

To be compliant, a manufacturer must show good faith effort. This means it must make reasonable business assumptions, review them with consultants and legal counsel (when appropriate), document them, and then develop consistent processes and procedures. We are operating in a sub-regulatory environment, waiting to see how the forthcoming CMS AMP Final Rule will impact our work. Manufacturers must still calculate correctly and certify that the results. This “good faith effort” theme was specifically addressed by the court in the Streck case, as I blogged about last year.

GP professionals need venues to talk, listen and learn. We need to understand the key issues deal with uncertainty, and plan for 2014 and beyond. It is crucial to know how others are examining the issues while simultaneously demonstrating your company’s good faith effort to be as compliant as possible.

Therefore, I strongly encourage you to join me at the upcoming IIR MDRP Summit. This meeting is the best forum for GP professionals to ask questions, have conversations, and get prepared. 2013's hot topics include:
  • Will the Final Rule be published in early 2014? If so, will we be jumping off a cliff or jumping off a curb?
  • How should your company perform gross-to-net calculations and evaluate actual revenue recognition (or loss)?
  • How can you use script level validation to detect double or triple discounts?
  • What’s happening with recent 340B program integrity, Congressional inquiries, and the evolving contract pharmacy market? What’s new with 340B audits, either from HRSA/OPA or manufacturers?
  • What are the best practices for forecasting and modeling healthcare reform’s potential impact? How will the program expand?
  • How should your company budget and plan for implementation of the Final Rule? How should resources be re-allocated across the organization?
  • How should your company develop its GP Product Master? How should it conduct BFSF and FMV analysis to ensure proper GP calculations and appropriate documentation?
  • How can you use chargeback and payer audits to minimize risk and revenue leakage?
  • To prepare for Final Rule, what assessments and audits can we do now to “close the door” on the historical calculations?
The MDRP Summit will give everyone the opportunity to discuss guidance, find out what their peers are doing, and learn about trends and best practices. I look forward to seeing you in Chicago next month, as we continue our path down the Yellow Brick Road.

In the meantime, I invite you to participate in CIS’s Compliance Blog and attend our ongoing monthly GP Webinar series.

Chris Cobourn is Senior Vice President, Commercial Compliance at Compliance Implementation Services (CIS). He works with manufacturers in the management of Government Programs, including audit, policy and procedures, methodology development and documentation, systems implementation, as well as Class of Trade and commercial systems. Chris also supports manufacturers as they work with the federal government in self-reports, restatements, and investigative activity. In addition, he has worked with compliance and audit departments developing monitoring and audit plans and conducting wholesaler, vendor, and internal audits. Chris specializes in assessing risks and implementing practical compliance programs.

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