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Market Access

FDAMA 114

What is FDAMA 114?
FDAMA 114 refers to part of the FDA Modernization Act which calls on FDA to provide guidance to pharma companies on the communication of healthcare economic information (HCEI) with population health decisionmakers (PHDMs) including payers. The 21st Century Cures Act further built on the initial legislation and has led to multiple guidances from FDA on the appropriate communication of HCEI with PHDMs including what types of information are appropriate, when it is okay to proactively communicate certain information as well as what it is not okay to communicate.

As payers find it useful to understand drug-specific data, economic projections, indication prevalence, etc. prior to a drug’s approval, these guidances have allowed pharma companies to better provide these key data to their payer customers. Despite the guidance, there are still areas which are unclear.

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Market Access

Wholesale Acquisition Cost (WAC)

What is Wholesale Acquisition Cost (WAC)?
Wholesale Acquisition Cost (WAC) is one of several pricing metrics commonly used in the United States for drugs. The WAC reflects the price that companies charge the wholesaler, which is typically the first point of sale. WAC prices are published in the Micromedex Red Book.

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Market Access

Buy and Bill

What is buy and bill?
“Buy and bill” refers to the process by which providers get reimbursed for drugs that are administered to the patient in the office. As the name implies, a provider purchases the drug on their own and keeps the inventory on site until a patient needs it. At that point, they would administer the drug to the patient and then bill the insurance company (typically under the medical benefit) for the drug price plus the administration fee.

Medicare reimburses these drugs with a stand ASP + 6% formula (average sales price plus 6%).

There has been a general trend (especially in non-oncology spaces) towards white-bagging models in which some insurers are requiring providers to get their drugs from specialty pharmacies rather than buying them directly due to the high cost associated with buy and bill for insurers. In a white bag model, a specialty pharmacy would buy the drug and bill for it under the pharmacy benefit- the pharmacy would then ship the drug to the provider’s office for a given patient and the provider would administer it and get paid only for the administration. Brown bagging also happens sometimes in which a patient gets the drug from a pharmacy and brings it to the provider’s office for administration rather than it being shipped directly from the pharmacy to the provider’s office.

Categories
Regulatory

FDA Guidance Document

What is an FDA Guidance Document?
An FDA Guidance Document is a publication that the FDA puts out to give manufacturers (and others) insight into their current thinking around a particular topic. FDA Guidance Documents give additional clarity to manufacturers around what may or may not be acceptable and generally serves to help make decision-making easier for the company as they can more clearly assess risk v. benefit of taking a particular action.

FDA Guidance Documents can be searched on the FDA website.

Categories
Market Access

Drug Pricing

What is Drug Pricing?
Drug pricing is the process by which the list price of a drug is determined. It is usually led by pricing personnel who work within the market access group and use a variety of techniques to recommend potential prices for a new drug. Ultimately, the final pricing decision is often made by executive leadership including potentially the CEO.

Amongst the considerations that pricing personnel consider are results of various market research that is conducted to gauge what providers and payers think about the drug candidate and how they would react at various price points as well as the pricing of competitor drugs. They also use forecasting models and incorporate what expected rebates or discounts may be at various price points to determine the optimal price.

The Senate Finance Committee’s investigation of Gilead on the pricing of their hepatitis C medication Sovaldi made public much of Gilead’s process in coming to the price for that product.