US Government Drug Reimbursement

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In the United States, the tasks of attaining formulary position and negotiating prices have become increasingly complex and competitive, especially in light of new guidelines under the Affordable Care Act (ACA). Use this report to understand how companies anticipate government payer needs, develop strong market access strategies, and manage payer relationships before and after product launches. Findings show how to prepare successfully for meetings with US government payers, how to create SOPs around reimbursement processes, and which functions to involve in price calculation processes. Benchmarks outline different structural approaches to US government reimbursement and show budgets for teams focused on this area.

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Report Details

Publication Date: November 2014
Pages: 55
Chapters: 3
Metrics: 200+
Charts/Graphics: 25+

Top Reasons to Buy This US Government Drug Reimbursement Report

Establish and Maintain Strong Payer Relationships to Win Optimal Formulary Position: Meaningful communication with payers during product development requires coordination with internal groups in both directions. Clinical groups need to share data with managed markets groups or HOLs, who then work directly with payers. But also, these payer groups should be allowed to provide input on trial design to make sure that the data outputs answer payer concerns. This government drug reimbursement study provides recommendations culled from interviews with leading life science leaders on meeting US government payers’ expectations and ensuring the desired reimbursement. Timeline data, including meeting duration metrics, will guide reimbursement teams in planning and making the most out of payer relationships.

Extend US Government Drug Reimbursement Team Capabilities through Structure and Resources: Differences in teams’ structure preferences are largely due to their company size and dependence on government drug reimbursement. All surveyed small companies have centralized government drug reimbursement teams, whereas some large companies choose to assign reimbursement responsibilities by brand, therapeutic area or development stage. And just as government reimbursement structures vary, so does annual spending for activities. This study includes diagrams illustrating real companies’ US government reimbursement team structures, as well as benchmarks showing budgets and outsourcing levels for these teams.

Anticipate Payer Expectations to Gain Superior Reimbursement: Attaining reimbursement does not have to be a complex process. State organizations often work with drug and device manufacturers to outline their needs and expectations for product dossiers. The best practices and strategies in this report present a roadmap for market access and US reimbursement teams to navigate state and federal payers’ processes and provide them with the necessary data to obtain a competitive formulary position and price.

You may also be interested in our market access library or individual market access research reports.

Excerpt from US Government Drug Reimbursement

Life science companies navigating US government payers’ complex guidelines for reimbursement have found their tasks increasingly intricate. New guidelines brought in under the Affordable Care Act have only added to this burden. As Medicaid at the state level transitions to managed care on a larger scale, companies must react by tailoring their approach to meet those payers’ specific needs.

This report provides insight into how companies are managing their operations in relation to US government reimbursement. In-depth discussions with pharmaceutical company executives and their advisors shed light on best practices throughout the product lifecycle.

Table of Contents

6             Executive Summary

9             Study Methodology

10           Study Definitions

12           Managing US Government Payers: Three Recommendations for Success

16           Expanding Government Reimbursement Capabilities through Structure, Budget Allocation and Outsourcing

18           Structuring Reimbursement Teams to Improve Internal Coordination and Communication

24           Benchmarks and Guidelines for Allocating Government Reimbursement Budgets

28           Employing Vendors to Build Reimbursement Models And Ensure Compliance

30           Installing and Documenting Clear Processes To Better Navigate US Government Reimbursement

CHARTS AND GRAPHICS

6             Executive Summary

15           Figure E.1: Function Communicating with Government Payers

16           Expanding Government Reimbursement Capabilities through Structure, Budget Allocation and Outsourcing

17           Figure 1.1: Overview: US Government Reimbursement Structure, Budget Allocation and Outsourcing

18           Structuring Reimbursement Teams to Improve Internal Coordination and Communication

19           Figure 1.2: Ways in Which Companies Organize Their Government Reimbursement Teams

19           Figure 1.3: Ways in Which Companies Organize Their Government Reimbursement Teams: Top 50 and Small Companies

20           Figure 1.4: Government Reimbursement Team Structure Depends on Company Size

21           Figure 1.5: Percentage of Centralized Government Reimbursement Teams Reporting to a Larger Group

22           Figure 1.6: Team Operation Depends on Exposure to Government Reimbursement

23           Figure 1.7: Percentage of Companies with a Dedicated Contracts and Pricing Committee

24           Figure 1.8: Annual Spending for US Government Reimbursement (2012-2014), by Company

24           Benchmarks and Guidelines for Allocating Government Reimbursement Budgets

26           Figure 1.9: Average Percentage Breakdown of Government Reimbursement Budget Allocations: All Companies

26           Figure 1.10: Government Reimbursement Budget Allocation: Top 50 Companies

27           Figure 1.11: Government Reimbursement Budget Allocation: Small Companies

28           Employing Vendors to Build Reimbursement Models and Ensure Compliance

29           Figure 1.12: Percentage of Government Reimbursement Budget and Activities Outsourced

30           Installing and Documenting Clear Processes to Better Navigate US Government Reimbursement

33           Involve Multiple Functions to Promote Consistent Government Reimbursement Strategy

34           Figure 2.1: Functions Involved in the Reimbursement Process: Top 50 Companies

34           Figure 2.2: Functions Involved in the Reimbursement Process: Small Companies

36           Figure 2.3: Functions Involved in the Reimbursement Process: Small Companies

38           Establish Reimbursement Procedures Using Specific Metrics

38           Figure 2.4: Functions Involved in Calculating BP and AMP Data

39           Figure 2.5: Functions Involved in Submitting BP and AMP Data to CMS

39           Figure 2.6: Functions Involved in Calculating Quarterly Rebate

40           Figure 2.7: Price Tracking Strategy, by Company

42           Figure 2.8: Companies’ Perception of Payers’ Strategic Importance to Reimbursement, by Payer Type

45           Gaining Optimal Formulary Position with US Government Payers

46           Figure 3.0: Meeting with US Government Payers

47           Figure 3.1: Phase During Which Companies Begin Meeting with US Government Payers

48           Figure 3.2: Duration of Meetings with US Government Payers, by Phase

48           Establishing Constant Contact with Government Payers Often to Keep Decision Makers Informed

49           Figure 3.3: Duration and Number of Meetings with US Government Payers: Phase 3

50           Figure 3.4: Duration and Number of Meetings with US Government Payers: Registration and Launch

51           Figure 3.5: Function Communicating with Government Payers

52           Figure 3.6: Functions Involved in Getting a Product on the Formulary: Top 50 Companies

53           Figure 3.7: Functions Involved in Getting a Product on the Formulary: Small Companies

54           Anticipating Government Payers’ Expectations and Securing Reimbursement