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In 2022, the gross-to-net revenue gap reached $250 billion, with commercial rebates representing the largest share at $115 billion. Revenue leakage due to inaccurate discounts in the commercial sphere continues to drive that figure higher. Without a tech-enabled, data-driven solution in place to validate utilization data at scale, pharmaceutical manufacturers risk not knowing the true impact of their contract terms, which puts them at a disadvantage when negotiating with pharmacy benefit managers (PBMs).
Kalderos’ Commercial Discount Monitoring solution empowers manufacturers to take action to reduce revenue leakage related to their commercial contracts. And with these new enhancements, it’s easier than ever to understand the effect of ineligible rebates, access the information necessary to make decisions around exclusions and develop a negotiation strategy.
- New validations: When we ingest manufacturer claims data into our platform, we run it through a series of proprietary algorithms. We’ve recently added additional data sets and built new validations to help us identify more potential duplicate discounts during that process. If any claims trigger a validation, we’ll flag them with a specific exclusion reason.
- Exclusion Center: Once manufacturer claims data has gone through our algorithms and validations, there may be enough evidence to exclude some claims from payment to PBMs. Manufacturers can find all the information they need to make a decision in the Exclusion Center.
- Contract Performance Analytics (Coming in October): This is a big one. Soon, manufacturers will be able to track the true performance of their contracts. With one simple, standardized view of contracts and drug portfolios, manufacturers will clearly see the impact of duplicate discounts and other contractually ineligible rebates and can use this information to develop a data-driven strategy for negotiating and renegotiating with PBMs.
Conventional practices to reduce revenue leakage
Manufacturers have traditionally depended on managed service providers or software companies to help reduce revenue leakage from the ineligible rebates that occur from commercial contracts. Unfortunately, external partners such as these can’t process claims data at scale, leaving manufacturers struggling to bring useful insights to the table during negotiations with PBMs.
Manufacturers have also attempted to solve the problem by investing in more people and resources to chase after revenue that’s already been lost. But the core revenue leakage problem remains. With every contract being unique, a greater headcount doesn’t necessarily translate to less leakage, especially because some contracts don’t allow manufacturers to exclude duplicate discounts in the first place.
Inside Commercial Discount Monitoring
To confidently negotiate with PBMs, manufacturers need concrete, actionable data regarding the performance of all their commercial contracts. Kalderos’ Commercial Discount Monitoring solution, built on a powerful platform for Drug Discount Management that brings together more than 20 third-party data sources, supports manufacturers throughout their entire contracting life cycle by surfacing ineligible rebates and shedding light on the health of these contracts.
- Tech-first approach: A cloud-based Drug Discount Management solution delivers a seamless, scalable experience with automatic upgrades.
- Better 340B transparency and intelligence: Gain insights from an expert technology partner in the 340B space to make better business decisions pertaining to the program.
- Operationalize exclusions and enforce contract terms: Avoid unnecessary revenue leakage by identifying ineligible rebates at the claims level to better enforce your contracts.
- Understand your contract performance: Compare performance across all your contracts and implement a strategy for those that may need improvement.
- More accurate financial reporting: Give your accounting team the data-supported knowledge needed to make informed forecasts and optimize spending.
With Kalderos’ Commercial Discount Monitoring solution — featuring the new Contract Performance Analytics dashboard — manufacturers can now equip their teams with effective insights to create a contract strategy backed by data. Learn more about how to reduce revenue leakage related to your commercial contracts by scheduling a personalized demo.
