Top 10 Keys to Success

In a recent webinar, Jen Sharpe, GTN lead and facilitator of the Revenue Analytics Collaborative at IntegriChain, sat down with Tina Knell, Director of Revenue at Akcea, for an in-depth discussion on the Top 10 mission-critical GTN activities that life sciences companies must achieve when approaching commercial launch. Here is a comprehensive countdown of the key Gross-to-Net (GTN) milestones:

#10: The first step is to develop your organizational strategy. What will your team look like? Are you planning on hiring or outsourcing expertise for any of the following groups?

  • Government Price Reporting
  • Commercial Contracting/Analytics
  • Rebate/Chargeback Processing
  • Gross-to-Net Forecasting & Management

For pre-commercial or SMB customers, it may not be feasible to hire for all of these positions. By outsourcing these positions, or automating processes, you can have a smaller headcount and footprint. 

#9: Next, you’ll want to establish cross-functional teams. This is always a successful practice to keep lines of communication open across the organization and share information. These teams could take the shape of:

  • Executive Pricing Committee
  • Gross-to-Net Working Team
  • Sales Team can operate from one version of the truth

You’ll also want to establish your GTN forecasting & accrual management processes. The easiest way to do this is to work with cross-functional teams to determine how often you want to view your reporting and gain consensus on timing and frequency. Reports that can benefit cross-functional teams include:

  • Channel Forecast by Customer
  • Close Current Month
  • Prior Period True-ups
  • Inventory Pipeline Reserve

#8: Be proactive and develop your program for the next year and have a baseline by enrolling in Government Programs (MDRP, Medicare Part D, Coverage Gap, FSS) upfront, since there are certain windows and deadlines for annual enrollment that you need to be aware of. Here is the path that most manufacturers take when determining this strategy:

  • Establish Commercial Pricing & Contracting Strategy
  • Establish GP Policies & SOPs
  • Take into consideration your price points and if you will have commercial contracts

#7: Then, you’ll want to establish an accrual strategy. How will you calculate the liability for each of your GTN line items appropriately? You’ll need to determine what reporting works best for you before you establish your accrual strategy. What will benefit your organization the most? These reports can take many forms, and it’s important to understand each parameter. Will your strategy be:

  • Assumption or Analog Based
  • Based on Point of Sale Accruals or Month End Accruals
  • Most Likely or Expected Outcome Method Forecast
  • Top-Down vs Bottoms Up methodology

#6: The biggest successful practice you can have is to understand your patient and demographic. Understanding demographic, patient population, comorbidities, distribution channel mix is so important and helps you better understand lines like copay and coverage gaps that need that kind of patient information to understand when they’ll be eligible for this type of liability or discount. Most manufacturers consider the following:

  • Patient Population and Demographic
  • Product Distribution Channel Mix
  • Patient Payer Mix
  • Other GTN discounts 
  • What are the important GTN lines on P&L and balance sheet?

#5: Expanding upon developing your organizational strategy (#10) and establishing an accrual strategy (#7), you’ll also want to develop your core GTN methodology itself. Understand that:

  • Each GTN line has a unique methodology
  • Demand and inventory transparency is an important part of any product launch as shipments can be inflated for stocking inventory. It’s important to base your GTN on-demand and understand unit and rate.
  • Develop simple mathematical examples to understand your calculations, how it’s working, and understand that your GTN is assumption based. A successful methodology is assumption based and grows with either sales or another analog in the industry.

    #4: Will you close your forecasts and accrual management models in a system or Excel? If you are already doing so in excel, there needs to be a critical parallel period in order for you to feel comfortable before you rely 100% on the system. It’s a successful practice in order to transition to a system. If you are just launching your first product, it makes sense to begin with a system as a single source of truth as all that the auditors and key stakeholders see. 

    #3: Once you know your patient, develop patient funnel models for complex GTN line items. So when you think of GTN line items like coverage gap and copay, these are items that can be tricky at launch since there aren’t a lot of utilization analog data sets. You can use payer mix percentages to understand the commercial population eligible for copay and the Medicare Part D population eligible for coverage gap, but then you have to water other lines down more significantly.

    #2: Be prepared for audit readiness through training. With a solid GTN system in place, you can understand its organization, system, process flow, and really be aware of all the sources for each GTN line item. We pride ourselves on sharing this information, training, and getting people up-to-speed on best practices in order to be the best business partner we can be.

    #1: Join and participate in the Revenue Analytics Collaborative. Launching a new product can be difficult. Having the right partner helps. Lots of companies who have recently launched are members of the Revenue Analytics collaborative and share their experiences and participate in Q&A’s weekly in the Revenue Analytics Collaborative weekly.

    Want to learn more?

    Click here to hear a full replay of this webinar.

    Case Study: Read how IntegriChain helped an expanding Oncology manufacturer make Gross-to-Net a reality.

    About the Author

    Jen Sharpe

    Jen Sharpe

    Vice President, Gross-To-Net Consulting

    Jen Sharpe leads the Revenue Analytics Collaborative, an industry group of 800+ professionals, and IntegriChain’s Gross-to-Net initiatives. She has been in the pharma GTN since 2001, spending a decade in Big Pharma implementing one of the first home-grown Gross-to-Net forecasting and accrual development applications. Jen is a trusted business partner in commercial and government data, forecasting, accrual management, analytics and reporting, and a frequent industry speaker.