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Bubbles 3D - 56171

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Transcript of Bubbles 3D - 56171

Government Pricing Reporting
Let's Follow the Bag

Government Price Reporting

ASP tidbits
ASP must be submitted to CMS within 30 days of the close of the quarter and must be certified
J-code or the HCPCS coding system classifies similar products across manufacturers to streamline claims processing
The six percent markup is generally considered compensation to providers for the storage, handling, and other administrative costs associated with these specialty drugs
Average Manufacturer Price (AMP)-The average price paid to manufacturers for sales to the retail class of trade

Best Price (BP) - the lowest price at which the manufacturer sells a drug to any purchaser
AMP & BP make up the inputs to calculate the URA (Unit Rebate Amount)

About 60 million Americans are covered by Medicaid

3 out of 10 people on Medicaid are children

Medicaid Drug Rebate Program
Established in 1965

Medicaid eligibility extends to certain individuals and families with low income

Jointly Funded Federal-State entitlement Program

It takes just one transaction to set a Best Price
A single sale to a customer can impact the 340b price offered to customers in all 50 states, D.C., and commencing April 1, 2017, the U.S. Territories.
A low Best Price can result from the discounted sale of a product to a customer or through providing contingent free goods and/or a bundled sale arrangement
More Acronyms:
Customer is set up in JDE/BAMs
Bring in all sales that consist of :
Direct Sales
Indirect Sales
Free Goods
GPR Calculations:
Price Type Duration
Unbundling Monthly/Quarterly
Rebates Monthly
AMP Monthly/Quarterly
BPE Quarterly
BPA Quarterly
340B Quarterly
ASP Quarterly
NFAMP Quarterly/Annually

AMP/BP Certification
Each monthly and quarterly submission must be certified by

The CEO, CFO, individual with equivalent authority, or designated delegee of any of those three persons

Certification Language:
AMP/BP: "I hereby certify, to the best of my knowledge, the data being sent to CMS with this submission is complete and accurate at the time of this submission, and ...I understand that the information contained in this submission may be used for Medicaid rebate and payment purposes and that civil monetary penalties and/or termination from the Medicaid Rebate Program may be enforced if the information provided is found to be misrepresented."

Why Certify?

Typical fines for inaccurate price reporting are extremely high.

Noncompliance may result in drugs being removed from government programs, forcing manufacturers to lose a major source of revenue.
Non-Federal Average Manufacturer's Price
Little Background on NFAMP
Non-Federal Average Manufacturers Price (NFAMP):
Provides discounted pricing on Brand Name Drugs
Example: Vancomycin, Intralipid, Infuvite

When is NFAMP Reported:
Annually & Quarterly

NFAMP provides discounted pricing to the the following:
GSO publishes the Annual Federal Supply Schedule
January 1st
Let's dive into the bag and follow the bag through GPR.
Important Fields to GPR:
1) Exclusion of 340B Customers & Pricing from our reporting
2) GPR Codes - How customers are bucketed for our calculations:
NFAMP Calculation Vancomycin
How the Medicare Part B Works

Mfgs calculates ASP and submits to CMS
CMS collects ASPs from all mfgs and calculates an avg “Jcode” price for each covered drug group
(Jcode Price = avg*6%)
Providers submit units dispensed for reimbursement to Medicare

Medicare submits reimbursement to providers based on units dispensed x jcode price

To qualify for Medicare Part B:
• You must be 65 years or older
• You must be a U.S. citizen, or a permanent resident for at least five continuous years

Baxter currently reports ASP for 280 NDC-11s
BP is calculated at the NDC 9 level

BPE is calculated within the current quarter

BPA is calculated 2-3 years later
Who certifies?
Matt Westbrock
Brik Eyre
Calculation- 2Q2016
00338-3552-48 - Vanco
$20.83 - $1.56

Invoice Dollars
All discounts ( CFG, Accrual)
Net Price Dollars

$16.52 / 6
(Shipped Quantity)
= $2.75
(Net Price Per Package)

How we report BPE: $2.75 / 200 mL =
Final BPE of $0.01376 ml
Carl Wilt
Dennis Vaughn
Non-Wholesaler sales + Wholesaler Sales = Combined Direct Sales
Discounts (340b, VA sale, 12 months of chargebacks/rebates) =
Final Sales Dollars

142,864,800 units
Final AMP of $0.051249 ml
What does Government Price Reporting (GPR) Do?
Calculate and report defined price points to the Government
Insure that all of the prices we report are

"Complete and Accurate"
Work with the businesses, legal and IT to review
and correct any inaccurate data
Present data and acquire price certifications from the
businesses each month
Responsible for paying quarterly Medicaid, Part D and
Tricare rebates
Sounds easy, right?
Why is GPR Important to Baxter?
AMP is an average
AMP helps in determining medicaid drug rebate liability
Calculation from 2Q2016
NDC: 00338-3552-48
Calculated at the NDC-9 level
Government Price Reporting is a Regulatory Requirement
Price reporting is due on the 30th of each month and the penalty for being late can be $10K per day per product. (370 NDC11's)
The penalty for submitting inaccurate data can also be extremely significant:
King Pharmaceuticals - $124 million (inaccurate AMP / BP)
Merck - $16 million (Medicaid Rebates)
GSK - $3 billion (a portion which related to BP)
Pfizer - $785 million (incorrect BP)

What Are The GPR Financial Impacts?
340b Sales $100,694,752
Medicaid Rebates $ 10,425,232
Part D Rebates $ 1,089,553
Tricare Rebates $ 195,518
Trivia Time!
What is an NDC?
National Drug Code
340b Drug Pricing Program
Requires drug manufacturers to provide outpatient drugs at significantly reduced prices to eligible covered entities
To participate in the 340b program, eligible covered entities must register and comply with all the requirements of the program
340b Program Stakeholders
Covered Entities
Covered Entities
Federal Grantees
Federal Grantees
Disproportionate Share Hospitals (DSHs)
Children's Hospitals
Free-Standing Cancer Centers
Critical Access Hospitals
Sole Community Hospitals
Rural Referral Centers
340b Price Calculation
AMP - URA = 340b price ML
340b Price Ml * Disp. Units per pkge * Pack Factor
340b Price Calculation
Ex. VANCOMYCIN - NDC: 00338-3552-48
$0.051249 (AMP)
$0.0375 (URA)
$0.013749 (340b price ML)
$0.013749 * 200 ml * 6 = $16.50/case
WAC price $138.24/case
340b Price Calculation
pricing information from the 4Q2016 report
340b Drug Pricing Program
340b Price Calculation
Penny Pricing
$0.0375 (AMP)
0.051249 (URA)
$0.01 * 200 ml * 6 = $12/case
Ceiling Pricing
Prices change quarterly
2 Qtr gap
340b Program
Double Discounts
GPO Prohibition
U.S Federal Government program signed in 1992
If the program was created in 1992, who was the US president who signed the approval of the program?
Some Facts...
There are approximately 29,000 covered entities registered in the 340b program
with savings of about $3.8 billion

* Comcast willing to pay $3.8 billion for DreamWorks Animation

* Illegal super bowl bets are at $3.8 billion this year

* Citigroup reported 3Q2011 net income of$3.8 billion

Why are NDCs important to GPR?


Manufacturer's Code
Product Code/Formulation
Packaging Size
Let's Take Vanco as an Example:

Unique number assigned by FDA to each drug and appears on all packaging labels/inserts
Defined as any arrangement where discounts are:
conditioned on a purchase of the same or a different drug
conditioned on another performance requirement, such as formulary placement
or where the discount is greater than it would be outside of the bundle

Tiered Pricing - with volume commitments
Volume Rebates
Contingent Free Goods

All discounts included in the arrangement must be reallocated across the products in the deal based on their fair market value or "WAC" price.

The Reallocated "Unbundled" amounts are
used in our AMP, BP, ASP and NFAMP
Price Types

Eligible Direct Sales
Discounts (340b, VA Sales, Prompt Pay, 12 months of CFGs & Rebates)
Final Sales Dollars
= Final NFAMP of $7.76 ea / $46.56 ca
*Minimum of 24% off of calculated NFAMP

Final Federal Supply Schedule Price of *$5.54 ea/ $33.29 ca
Baxter's GPR Team
Beth Scott
Kristen Black
Meredith Saum
Gloria Bohman
Taryn Mueller
Only Drugs Sold in the US
Trivia Time!
What determines if a person is eligible for Medicaid vs. Medicare?
Medicaid = Low Income
Medicare = Elderly
Trivia Time!!
When is Veteran's Day celebrated each year?
November 11th
WAC Price $23.04 ea / $138.30 ca
Final Sales Dollars

Final Units
= Reported NFAMP
Trivia Time!
How many years of Baxter experience collectively does the GPR team have?

a. 17
b. 33
c. 62
d. 45
c. 62
Trivia Time!
Medicare Part B is supplementary medical insurance that covers services/supplies to treat and prevent health conditions
Definition: Average Selling Price to all manufacturer's purchasers for the NDC-11's in a given quarter. ASP is used for the billing of Medicare Part B
Non-Wholesaler sales + Wholesaler Sales = Combined Direct Sales
Discounts (12 month rebates/CFGs/BaxCap/price corrections) =
Final Sales Dollars
Final ASP of $9.607 ea
Calculation from 2Q2016
NDC: 00338-3552-48
WAC = Wholesaler Acquisition Cost
As of 2014, 49.3 million people were receiving Medicare Part B

Unbundling is the Government's way of insuring that manufacturers can't manipulate the prices that we report which impact the 340B pricing and rebates we pay
Unbundling is the Government's way of insuring the manufacturers can't manipulate our 340b pricing or the amount we pay for our rebates
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