Biotech and pharmaceutical pricing and contracts

Understand the relationship between government pricing and commercial contracting

Government programs participation and contracting decisions are essential components of biotech and pharmaceutical manufacturers’ commercial success. Learn how Deloitte can help you assess and develop your strategies and maintain compliance with regulatory changes.

Government programs and commercial contracting

Health care reform has created many challenges due to regulatory changes, pricing conflicts, and evolving enrollments in government programs. We understand the interdependencies between government programs and contracts and can help you mitigate risk and strengthen compliance.

To effectively monitor transactions such as rebates, pharmaceutical chargebacks, and administrative service fees, it’s critical to understand the financial and operational impacts of your contracting strategies. Our specialists can help you develop or assess your contracting strategy based on your organization’s specific needs.

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Gross-to-net forecasting and accruals are a significant challenge facing many pharmaceutical companies today. Factors such as product portfolio changes, pricing and contracting strategy changes, and uncertainty with downstream data make it difficult for manufacturers to manage their gross-to-net process. Furthermore, it’s important for manufacturers to consider the impact of these factors on their gross-to-net process as a whole.

Our gross-to-net analysis includes a financial model that supports pricing and contracting strategy and forecasts a product’s return on investment. We take gross-to-net a step further and help you establish a more enhanced gross-to-net accrual close process.

We aim to establish cross-functional communications across your organization, which can lead to executives making more informed decisions on business strategies as a result of an enhanced understanding of gross-to-net impacts. We then present the information in a customizable format for presentations with company stakeholders.

By looking at gross-to-net sales and forecasting rebates and chargebacks, you can gain a better understanding of the potential impact on your commercial and federal contract decisions.

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Revenue cycle

Fair market value for bona fide service agreements

Within the biotech and pharmaceutical industry, companies are under scrutiny by regulators to provide a level of transparency and disclosure where spending on services is reported in accordance with several state laws and federal provisions.

Failing to pay fair market value (FMV) for services or a lack of a structured framework for determining pricing may result in noncompliance of regulatory requirements. Penalties for noncompliance could include large fines, forced divestiture of subsidiaries, exclusion from government health care programs, or even imprisonment.

We have extensive experience working with outside counsel for our clients and assisting clients in assessing their FMV circumstances with their regulatory requirements. Our team of professionals and subject matter specialists provides us with what we see as high-quality insight into creating an effective FMV framework.

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340B program compliance

Challenges and complexity surround the evolving 340B Drug Pricing Program. The increased focus on 340B program integrity requires biotech and pharmaceutical companies to engage in 340B monitoring, compliance auditing, refunding, and other activities. We bring specialized understanding and perspective to help you deter covered entity noncompliance and address heightened integrity and enforcement activities.

In addition to program integrity, manufacturers’ responsibilities regarding 340B price restatements and refunds to covered entities are growing. To help you address these challenges and support your 340B compliance, we offer complementary services to restate 340B prices and return overcharges to your covered entity customers.

Learn more about Deloitte's services for life sciences practice companies.

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Get in touch

Paul Silver

Paul Silver

Principal | Life Sciences

Paul is the Deloitte Risk and Financial Advisory’s Life Sciences Regulatory and Compliance leader for Deloitte & Touche LLP. He has 30 years of experience in the pharmaceutical, medical device, and co... More