How Joining the Blockchain Network Can Help You to Optimize Gross-to-Net
Gross-to-net (GTN) optimization, or, the process of optimizing the difference between gross sales (i.e., the revenue generated by selling pharmaceutical products) and net sales (i.e., the revenue received by the manufacturer after discounts and allowances like chargebacks, rebates, and returns are taken into account) has become increasingly challenging in recent years.
340B, Chargebacks, and Rebates
The 340B program has led to expanding discounts (some inaccurate), and difficulty managing compliance.
Flawed chargeback claims, likewise, continue to present a challenge. These claims often occur when a customer makes an incorrect or fraudulent claim for reimbursement, like claiming a higher discount than was actually provided or claiming reimbursement for products that were not actually purchased, or for pricing that they were not actually eligible for. These flawed claims can result in overpayments by the manufacturer, reducing their net revenue and profitability.
Rebate programs have become increasingly complex, with more rebates being offered and more data being required to track and verify them, making it increasingly difficult for manufacturers to accurately forecast and manage their GTN.
Inaccurate Pricing
If a product price is listed incorrectly, it can result in a wide range of downstream consequences that can impact net revenue and profitability. One company recently told us that they saw an increase of $16,000,000 overnight by simply identifying and resolving a price listing misalignment.
Incentive Buying and Bulk Purchasing
Incentive buying and bulk purchasing motivate customers to purchase a product by receiving a discount, rebate, or other promotional offer. While this can help boost sales and drive revenue in the short term, it can also lead to excessive returns if the customer purchases more products than they can sell or if the promotional offer encourages them to purchase products that they do not need. These returns can be difficult to manage and ensure accurate data and pricing for.
MediLedger’s Approach to GTN Optimization
MediLedger is a blockchain-based network that is designed to help the life sciences industry address some of the challenges related to gross-to-net (GTN) optimization. The platform provides a secure and transparent way for pharmaceutical companies, wholesalers, and GPO’s to exchange data related to chargebacks, pricing, and eligibility.
MediLedger helps to reduce data disputes and discrepancies by bringing together all the relevant parties onto one platform. By using a blockchain-based system, MediLedger ensures that all parties have access to the same data and that the data is secure, transparent, and tamper-proof. This can help to eliminate issues related to data inaccuracies, which can be a major source of revenue leakage.
In addition, MediLedger can help to reduce aged write-offs, threshold write-offs, unapproved distributor deductions, and ineligible 340B customer claims by providing real-time validation of data and transactions. This can help to ensure that chargebacks and rebates are accurately calculated and paid, which can ultimately reduce the overall level of leakage. This also greatly benefits the GTN operations by ensuring more accurate and predictable chargebacks.
In addition, MediLedger’s 340B solution also facilitates the management and communication of contract pharmacy exceptions and exhaustive 340B contracts. By providing a centralized platform for managing these programs, MediLedger can help to reduce errors and discrepancies that can lead to GTN leakage. Manufacturers are able to share detailed level eligibility in a standard real-time fashion with their distributor trading partners. This brings forth efficiencies and alignment for both the manufacturer and the distributor.
Overall, the MediLedger network is an important tool for pharmaceutical companies looking to improve their GTN performance. By integrating industry data, validating GPO rosters, automating customer evaluation, and providing real-time contract updates, MediLedger can help companies reduce leakage and improve their financial performance.
After MediLedger
- Pricing Accuracy: MediLedger members know that they are always seeing the most recent, up-to-date pricing information, transparent to all parties simultaneously.
- Reduced Reserves: Effective management of gross-to-net can help reduce the level of uncertainty and risk associated with chargebacks, rebates, and other deductions, which can in turn help reduce the amount of balance sheet reserves that a company needs to set aside.
- Improved Patient Affordability: Optimizing the revenue for the manufacturer means more leeway for pricing for customers and increased access and affordability.
A Real Customer Story
A particular pharmaceutical company (over $15 billion in total US revenue) was facing significant challenges related to chargebacks, rebates, and contracts. They were dealing with numerous data disputes, write-offs, and excessive returns, which were leading to significant revenue leakage and inefficiencies.
After joining MediLedger, the company found that they could leverage the platform’s various solutions to address these issues. By using MediLedger’s features, the company is able to streamline its chargeback processes. It is now projected to reduce write-offs by $22 million and incorrectly approved chargebacks by another $25 million.
MediLedger’s platform has allowed the company to eliminate aged write-offs and threshold write-offs, reduce unapproved distributor deductions, and eliminate ineligible 340B customer claims, which has also helped to further reduce revenue leakage.
One of the key benefits of using MediLedger’s solution has been the ability to significantly reduce manual labor required to manage chargebacks and rebates. By automating many of these processes, the company is able to save the equivalent hours of 15 full-time employees, freeing up resources for other strategic initiatives.
Additionally, the company will be able to reduce chargeback errors by more than 80%, thanks to the platform’s ability to validate GPO rosters, automate customer evaluation, and provide real-time contract updates. This has helped ensure that chargebacks are accurate and efficient, further reducing revenue leakage and improving the company’s gross-to-net performance.
Overall, by leveraging MediLedger’s solutions, this pharma company is poised to save $47 million annually, significantly improve its chargeback and rebate processes, and reduce revenue leakage and inefficiencies.
Join the Network
To find out of the MediLedger is right for your team, schedule a time to meet with our team here.
