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Chargeback Overview

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Chargeback Overview

  1. 2. Contract Contract Price: $70 Purchase Price: $70 WAC Price: $100 Chargeback: $30 Chargeback Model Wholesaler Contract Pharmacy Eligible Entity Manufacturer
  2. 3. Chargeback Programs <ul><li>Federal Supply Schedule (FSS) </li></ul><ul><li>Offered to in-patient and out-patient use at the following facilities: Dept of Veterans Affairs (VA); Dept of Defense (DoD); Indian Health Services (IHS); Coast Guard; Bureau of Prisons </li></ul><ul><li>Public Health Services (PHS) – 340B Program </li></ul><ul><li>Offered to out-patient use at the following facilities: Community Health Centers (CHC); Disproportionate Share Hospitals (DSH); Family Planning Clinics (FPC); Federally Qualified Health Centers (FQHC); HIV Clinics; STD Clinics; Ryan White Programs (RW) </li></ul><ul><li>Special PHS (SPHS) </li></ul><ul><li>A voluntary incremental discount to the PHS/340B price to individual customers </li></ul><ul><li>AIDS Drug Assistance Program (ADAP) – 340B Program </li></ul><ul><li>Provides FDA-approved HIV-related prescription drugs to low-income people living with HIV/AIDS who have limited or no prescription drug coverage. (Ryan White II Direct Purchase) </li></ul><ul><li>AIDS Health Foundation (AHF) </li></ul><ul><li>Individual contract with AIDS Health Foundation that provides ADAP pricing to member entities not otherwise eligible for ADAP pricing </li></ul>
  3. 4. Contract: Products & Pricing
  4. 5. Contract: Membership
  5. 6. Sales and Discounts U.S. Sales and Discounts from 3Q’09 to 4Q’10 <ul><li>Total product sales in 4Q’10 was $1.48M, a 6% increase from 3Q’10 and 27% increase from 4Q’09 </li></ul><ul><li>Total chargeback payments in 4Q’10 was $172 K, reducing the sales revenue by 12% </li></ul>Total = $1,479 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010 Dollar (in thousands) Sales - Discounts Chargebacks Rebates $102 $87 $872 $109 $119 $941 $112 $128 $1,060 $141 $130 $1,073 $156 $154 $1,085 $180** $172 $1,128
  6. 7. Top 5 Wholesalers by CB Amount Paid in 4Q’10 <ul><li>The top 4 wholesalers constitute 96% of total chargeback payments in 4Q’10 </li></ul><ul><li>AVITAN, McAllister, AmeriDrug, and Borris & Dawson are consistently the top 4 wholesalers receiving chargeback payments due to their high volume purchases every quarter. </li></ul>Top 5 Wholesalers $10 $20 $30 $40 $50 $60 $70 AVITAN McAllister AmeriDrug Borris & Dawson Whole Drug CB Amount (in thousands) $63.2 $43.3 $34.6 $24.3 $3.1
  7. 8. CB Claims Processed from 3Q’09 to 4Q’10 <ul><li>AVITAN, McAllister, and AmeriDrug constitute 94% of total chargeback submissions in 4Q’10 </li></ul><ul><li>The total number of chargeback claims submitted by all wholesalers in 4Q’10 was >370,000 </li></ul><ul><li>For the TTM, the total number of chargeback claims submitted by all wholesalers was >1,250,000 </li></ul>Chargeback Claims Volume 20,000 40,000 60,000 80,000 100,000 120,000 140,000 AVITAN McAllister AmeriDrug Borris & Dawson Number of Chargeback Claims 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010
  8. 9. Top 5 Programs by CB Amount Paid from 3Q’09 to 4Q’10 <ul><li>ADAP, PHS, and FSS constitute 93% of total chargeback payments in 4Q’10 </li></ul><ul><li>ADAP, PHS, and FSS are consistently the top 3 programs receiving chargeback payments due to high volume purchases by eligible entities. (ADAP and PHS programs are subsets of the 340B Program.) </li></ul>Top 5 Programs $10 $20 $30 $40 $50 $60 $70 $80 ADAP AHF FSS PHS SPHS CB Amount (in thousands) 3Q 2009 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010
  9. 10. <ul><li>Sometimes we can’t tell which entity is purchasing our product until we request more information from the wholesaler. </li></ul><ul><li>Example: Wholesaler submits ‘ship-to’ entity info only. If we are uncertain about the purchaser, we request an invoice in order to see the ‘bill-to’ entity. </li></ul>Sample Invoice Ship-to info on wholesaler submission Bill-to info not on wholesaler submission
  10. 11. Sample Claim Line Chargeback amount requested WAC HIN # (Health Identification Number) or DEA # NDC (National Drug Code) Contract # Contract Price Eligible Entity Wholesaler Contract
  11. 12. Validating Eligibility <ul><li>Customer ID </li></ul><ul><li>HIN # – validated through HIBCC database </li></ul><ul><li>DEA # – validated through DEA registry </li></ul><ul><li>PHS & ADAP Membership (340B) </li></ul><ul><li>Validated through OPA - HRSA database </li></ul><ul><li>FSS Membership </li></ul><ul><li>Validated through DSCP and VA databases </li></ul>
  12. 13. Validation Example
  13. 14. Warning, 4.49% Fatal, 1.11% Error, 0.18% Valid, 93.86% Percent of Claims Validated in 4Q’10 <ul><li>Valid claims are auto-closed </li></ul><ul><li>All other validation warning/fatal/error require investigation </li></ul>Claim Statuses Overridden-Accept, 0.33% Overridden-Reject, 0.04% Status Percent # of Lines Valid 93.86% 347,540 Warning 4.49% 16,620 Fatal 1.11% 4110 Overridden-Accept 0.33% 1220 Error 0.18% 650 Overridden-Reject 0.04% 130
  14. 15. Wholesaler Contract Pharmacy Patient of Eligible Entity (PHS) CP Serves Multiple 340Bs Eligible Entity (PHS)
  15. 16. Who is Purchasing?
  16. 17. Questions?

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