A successful biotech or pharma product launch in the U.S. government payer market depends on deep knowledge.
After spending years developing innovative treatments that can save and enhance lives, biotech and pharmaceutical manufacturers face numerous stumbling blocks on the path to commercialization in the U.S. market.
Medicare, Medicaid, and other government payers and providers have highly complex program requirements, and noncompliance can expose companies to significant risks. Given that nearly half of the U.S. population receives a drug benefit through one of these publicly funded programs, it is critical that manufacturers get the process right.
The most recent white paper from KPMG’s healthcare and life sciences practice -- “Navigating the U.S. Government Market” – poses five critical questions manufacturers need to address to meet the compliance and operational requirements of the U.S. government payer market:
How will the various government payers and providers utilize, purchase, or cover my products? The nature of the drug and its distribution will determine its eligibility for each program. Rules vary by program and according to the population the program serves.
What ongoing requirements do manufacturers have to meet when they participate in government programs? Each program has specific statutory reporting requirements used to establish pricing and reimbursement.
What goes into establishing the government price? Price calculations are based on commercial transactions with specific categories of customers.
What is required to enter into the various government programs? Each program has unique requirements and administrative processes that can take months to fulfill. It is important to note that providing the government with incorrect product information could ultimately subject manufacturers to potential False Claims Act actions.
What are the compliance requirements of government programs and the risks of noncompliance? Under programs such as Medicaid and Medicare, C-class executives are required to certify the accuracy of the pricing calculations their companies submit to the government.
Given the complexity of answering these questions and more, emerging manufacturers often struggle to manage government program requirements. And many are constrained in their ability to build the costly internal systems and infrastructure that are needed. However, given the opportunities in this growing market, many companies choose to gain access to needed counsel by outsourcing the function.
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