AmerisourceBergen, a global healthcare solutions leader, in concert with their industry trade association the Healthcare Distribution Alliance, has proposed a comprehensive framework that would support the proposed move from the current rebate system to point-of-sale (POS) discounts in response to the Department of Health and Human Services’ (HHS) Notice of Proposed Rule Making regarding the Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals. AmerisourceBergen supports policies that lower out-of-pocket costs for patients and stands ready to support a transition to a patient-centered model with distributors serving as chargeback administrators for a January 1, 2020 start.
“At AmerisourceBergen, we are acutely aware of the access issues facing American patients and are deeply committed to reforms that realign incentives in the best interests of patient health,” said Steve Collis, Chairman, President & CEO of AmerisourceBergen. “As the connector of pharmaceutical innovators and healthcare providers, distributors are uniquely positioned to support the seamless and efficient delivery of POS discounts to Medicare beneficiaries. We come prepared with solutions that are fair, efficient and transparent, and that’s why we believe we are best positioned to lead this transition.”
The Case for a Distributor-Facilitated Model
- Relationships Built on Trust: Pharmaceutical distributors have strong service-oriented relationships, built on fairness and trust, with their pharmacy customers and manufacturer partners. These longstanding relationships allow distributors to approach this reform in a fair and equitable way to meet the needs of all stakeholders, and most importantly, create a positive impact for patients. Further, pharmacies are important customers for wholesalers, so it is in distributors’ best interest to ensure that pharmacies promptly receive POS discounts. In addition, distributors have no role in setting the price of brand pharmaceuticals and do not influence formulary decision-making.
- Proven Experience and Infrastructure: Distributors and manufacturers already have the requisite building blocks in place to operationalize chargeback amounts due for discounts applied at the point of sale. Distributors and manufacturers manage and maintain complex contract administration and chargeback systems today that enable manufacturer discounts for health system customers. In 2018 alone, AmerisourceBergen exchanged over 300 million chargeback transactions with manufacturers with greater than 99% successfully completed in three business days or less. Extending this proven chargeback system to handle POS discounts would be a natural evolution.
- Commitment to Transparency: Chargebacks would be processed with full visibility and auditability by all stakeholders. Further, given the existing direct financial relationships with both manufacturers and providers, distributors could facilitate chargebacks through adjustments to their accounts payable to manufacturers and accounts receivable from pharmacies, resulting in cashless transactions.
To further operationalize, pharmaceutical distributors would, directly or indirectly from their customers, secure the requisite chargeback detail from the POS claims and provide an efficient and effective process for manufacturers to make pharmacies whole, meeting or exceeding the mandatory 14-day prompt pay requirement.
“We are ready to play a role, and hope our suppliers, dispensing partners and industry peers will join us in pursuing a distributor-facilitated model that would no doubt improve transparency and deliver more value directly to patients,” said Collis.