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Home Pharma & Biotech Pharmacy management The Importance of a Drug Pricing Compendia Strategy for Product Launch

The Importance of a Drug Pricing Compendia Strategy for Product Launch

By Ann Johnson, President, Pharmacy Healthcare Solutions, LLC

If you are a pharmaceutical, device, or digital therapeutics company (collectively manufacturers), having a drug pricing compendia strategy should be an integral part of the launch planning process.  The drug pricing compendia are analogous to dictionaries of drug information, publishing specific fields for each NDC, UPC, or HRI listed.  Data published can include product names, pricing, package sizes, proprietary therapeutic categories, and a host of other data elements.  How a manufacturer’s product is listed can have far-reaching ramifications in the industry.  While Wolters Kluwer’s Medi-Span and Hearst’s First Databank are the two main compendia, the National Council for Prescription Drug Programs (NCPDP) recognizes six official drug pricing compendia providers, also including Cerner Multum, Red Book, Elsevier Gold Standard, and ScriptPro.

Electronic health records (EHRs), pharmacy dispensing software systems, drug wholesalers, PBMs, health plans, and many other industry stakeholders purchase subscriptions to one to more drug pricing compendia, also known as drug databases.  They use this data to build their system algorithms, and ultimately, this is the data that is frequently displayed to end-users of these products.  Essentially, if you want your product to be able to be prescribed, dispensed, adjudicated, and/or reimbursed, you must submit your product to the drug pricing compendia.

By having a pre-launch drug pricing compendia strategy, manufacturers can better understand how a new product is expected to be listed.  Understanding the compendia editorial policies, knowing how analogue products are listed, and preparing to submit a product in a timely fashion are all essential for a successful launch.  By thoroughly understanding how a new product is going to be listed, manufactures can mitigate issues prior to launch, avoiding surprises from the field during the crucial product entry period.

Below are a few ways that a pricing compendia listing(s)may affect a given product:

  • The proprietary compendia groupings (assigned GPI or GCN/GSN) may determine which products show up as substitution alternatives for any given drug in a pharmacy dispensing software system. (e.g., What products are showing up as generic alternatives when I search for this drug?)
  • The packaging size, as listed in NCPDP billing units (each, gram, or milliliter) can dictate how a product should be prescribed by a healthcare provider. (e.g., Do I write a prescription for 1 inhaler or 9 grams?)
  • Third-party payers may review the compendia’s proprietary therapeutic classification for a drug to help them make formulary or coverage decisions. (e.g., Is this the only product in a new medication class?)
  • Product naming, as listed in the drug pricing compendia, often dictates how a product appears in an EHR or pharmacy dispensing software system, allowing similar products to be differentiated from one another. (e.g., Is this an institutional package or one meant for retail pharmacy dispensing?)

With the increased reliance on e-prescribing, having a robust compendia launch strategy is more important now than ever.  While some manufacturers have an internal digital center of excellence or pricing compendia/EHR team, many companies do not have roles specifically dedicated to this area.  Although some pharma pricing teams may be responsible for submitting information to the compendia at launch, the compendia publish much more than just Wholesaler Acquisition Costs (WAC), and a mindful, holistic approach should be considered.  For many manufacturers, this may include seeking outside guidance or consulting support.  Regardless of who is filing information with the drug pricing compendia, manufacturers should develop a consistent strategy for submitting and monitoring this information for their product portfolio, based on the far-reaching impact the data has on the industry.

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