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PCX –SALES & MARKETING
PCX – Government Programs

the government as  a customer

New regulatory challenges affect how we view the Government as a customer, as well as how we view the business and financial impact of this growing customer base. With increasing scrutiny and audits at the Federal and State level, pharmaceutical companies must ensure that they are in full compliance with the programs that they participate in.

CIS can help you with your Government Contracts:

Federal Supply Schedule Services
340B Membership Procedures and Validation
The Medicaid Drug Rebate Program

FEDERAL SUPPLY SCHEDULE SERVICES
GSA’s Federal Supply Schedules are large contracts through which federal customers can acquire more than 4 million products and services directly from more than 8,000 commercial suppliers, including pharmaceuticals, medical equipment and supplies. Let us simplify your life.

We Know FSS Contracts Inside and Out – From Pricing to BPAs, from SOPs to TRRx.

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340B Membership Procedures and Validation
One of the most problematic issues for Pharmaceutical Manufacturers for the past few years has been putting effective procedures and tools in place to manage their 340B Contract Eligibility. It can be an issue with potentially dramatic impact. For example, offering the 340B price to a non-eligible entity can lead to disastrous results. Inaccurate computation of Best Price, the reporting of incorrect AMP and BP data to the government, incorrect payments of Medicaid rebates to States, incorrect reporting to the VA of Non-FAMP data, and the incorrect reporting of 340B pricing (where government agencies or eligible entities may not have been charged the correct price). And all of which lead to potentially enormous False Claims Act violations, regardless of whether it was a simple mistake or due to a lack of sufficient procedures and systems on the part of the manufacturer. The worst part is that it may be happening without a manufacturer even being aware.

The problem of managing 340B Contract Eligibility is two-fold. First, historically there was no consistently reliable source for current 340B eligibility information. Second, manufacturers’ systems had inconsistent customer data, with duplicates and other historical issues, based upon insufficient procedures and systems. The OPA’s 340B Eligibility List has improved and should be relied upon for a current source of eligibility information. But even with this, it has been very difficult to match up the OPA data with the manufacturer's data in its systems.

During recent investigations, the Federal Government has made it clear that the onus is on the manufacturer to ensure that only 340B eligible entities receive 340B pricing. If a non-eligible entity were to receive 340B pricing the manufacturer has potentially computed an inaccurate Best Price; in other words, the price offered the non-eligible entity potentially could have set the Best Price during that rebate period. It is important to underscore the legal principle that, under the False Claims Act, a manufacturer need not be intentionally defrauding the government; all that is required to establish liability is “reckless disregard of the truth.” Therefore, manufacturers without policies and procedures in place to ensure that only 340B entities receive this pricing could be exposed to potentially enormous liability under the False Claims Act.

This means that the manufacturers offering 340B prices must:

• have processes in place to perform at least a quarterly review of the OPA’s 340B eligibility list, identifying customers who may be in the manufacturer’s system that need to be end dated
• keep their contracting system up to date on a quarterly basis with additions or deletions of customers
• reject chargebacks submitted by wholesalers for reimbursement of sales to non-eligible entities

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The Medicaid Drug Rebate Program
Since the establishment of the Medicaid Drug Rebate Program by the Omnibus Budget Reconciliation Act (OBRA) of 1990, pharmaceutical manufacturers have faced challenges in understanding, interpreting and complying with laws, regulations and guidance set forth to support this program. Expansion of the Medicaid program has driven rapid growth in Federal and State government related expenditures. As a result, the calculations used to derive rebate amounts are under increasing scrutiny by various regulatory enforcement and oversight agencies. In the past decade alone, the Medicaid eligible population has risen over 30%. Today, the government continues to refine and redefine Medicaid drug reimbursement components including calculations such as AMP and BP, thereby making compliance an even greater struggle.

As a manufacturer, compliance within the changing Medicaid drug reimbursement environment is critical not only to a company’s own commitment to compliance, but also to avoid potential civil and criminal penalties. In order to support price reporting within your company while upholding regulatory requirements you will need policies, procedures and systems in place that are designed to utilize data to calculate accurate prices. These systems need to prevent underpayment to the government and also overpayment for the company’s best interest. Recent government investigative activity has demonstrated the position that the lack of sufficient policies, procedures and systems can be a potential False Claims Act violation.

CIS understands the complex challenges pharmaceutical manufacturers face in developing, implementing and maintaining government pricing systems and supporting documentation. Our price-reporting experts bring practical, hands-on industry experience to help guide and/or assess your company’s Medicaid Drug Rebate Program adherence. Furthermore, CIS price-reporting experts are at the forefront of change, with knowledge of new or proposed changes to the Medicaid Drug Rebate Program and helping clients assess the impact of these changes on their business.

Let CIS help your company evaluate your current compliance with the Medicaid Program. See how your current policies, procedures, and systems rate on a compliance “scorecard,” and put together a practical roadmap for improvement and growth.
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