As a pharmaceutical industry professional, you’ve heard a thing or two about the AMP Final Rule that’sexpected to go into effect in the near future.
You’ve probably heard that the AMP Final Rule will change the Medicaid rebate structure for outpatient drugs in accordance with the American Care Act. And, chances are, you’ve also heard how this new set of requirements will change the way that the Average Manufacturer Price (AMP), Best Price (BP) and Unit Rebate Amount (URA) are calculated. You might have even heard that this new rule is going to affect your company’s Gross to Net calculations by increasing the complexity and even granularity of the data used in these calculations.
However, you may be wondering about another part of the rule, though, concerning “presumed inclusion” and the traceability of data regarding the sale of drugs from wholesalers to retail community pharmacies. Here we touch on six additional aspects of the wholesaler data traceability in the AMP Final Rule.
[If you’d like tolearn more, be sure to watch our free webcast titled, "The Insider's Guide to the AMP Final Rule."]
1.Manufacturers Must Trace All Sales through Wholesalers to RCPs (Presumed Inclusion)
Regardless of whether or not there was a chargeback or other detail trail, all pharmaceutical manufacturers may soon be required to trace all sales of drugs to Retail Community Pharmacies (RCPs) through wholesalers. These new traceability requirements could definitely require extra manpower.
The Presumption Law previously allowed manufacturers to avoid reporting another level of sales, but with the new rule, this may no longer be allowed. Manufacturers may need to track where every piece of product is going, which is a big change. It will take time to track, report and understand all the new changes. Time is money, so this inevitably means extra costs.
2. Changes to Data Sources and Architecture
The new AMP Final Rule requirements may require modifications to demonstrate how manufacturers currently store information such as chargeback and 867 channel data, as well as other data. Changes to data sources and architecture would require substantial planning, training and restructuring, which ultimately translates to time and money spent.
3. New Relationship with Wholesalers
With new requirements potentially prompting the need for use of wholesaler portals and Electronic Data Interchange (EDI), pharmaceutical manufacturers will need to revisit and potentially leverage their relationships with wholesalers. While the rule may not directly affect wholesalers, it may indirectly alter the way wholesalers or distributors work with upstream manufacturers and downstream pharmacies. There is also definitely an element of reviewing your wholesaler contract as a manufacturer in regards to information supply and costs.
4. Increase in Infrastructure Spending and Costs
With new potential requirements for data sources, architecture, pricing structures and wholesaler relationships, there will inevitably be a great deal of work involved in complying with the new rule. And, of course, more work means more infrastructure spending and additional costs related to human resources for pharmaceutical manufacturers.
5. New Definitions of RCT (Retail Chain Pharmacy)
The Centers for Medicare and Medicaid Services have proposed a new definition of “Retail Chain Pharmacy” to include only chain pharmacies, independent pharmacies, mass merchandiser pharmacies and supermarket pharmacies which are licensed by the State to dispense medication to the public at the retail price level. Mail order pharmacies, long-term care pharmacies, pharmacy benefit managers (PBMs) and other types of pharmacies are not included in this definition.
6. Changes to Master Data Management
Once the new AMP Final Rule goes into effect, manufacturers may need to change their coding or mapping system if they should make any alterations to how their products are classified for tracking or reporting purposes. With such noticeable changes to manufacturers’ master data management protocols, large structural overhauls may be required.
While there is much to absorb to fully understand all that the AMP Final Rule will mean, the good news is there are experts waiting to help guide you through the various business implications. Our free webcast titled, "The Insider’s Guide to the AMP Final Rule", will help you navigate the enormous changes you can expect. Attendees will learn exactly what the AMP Final Rule is, what the business implications are for pharmaceutical manufacturers and what steps companies can take to prepare for the new rule moving forward.