SMEs and distributors in the pharmaceutical industry are consistently dealing with the challenges of chargeback submissions by direct players (chains, wholesalers and retailers), large group purchase organization (GPO) contracts, and regulatory compliances. The increasing demands and complexities of contracts and chargeback management are adding to their operational overheads. Ineffective handling of chargebacks and rebates are burdening the in-house systems and processes, operational efficiencies and bottom-line figures of these SMEs adversely.
Resultantly, most pharma manufacturers and wholesalers are struggling to stay ahead in the race. Apart from losing valuable market share, they are facing revenue losses because of inaccuracies in outdated reconciliation processes. Fines, litigations lawsuits and the risks of non-compliance have become commonplace - making it critical for them to look for and result-oriented and high-impact management solutions.
Chargebacks or discounts on products, are paid to buyers once the sales transaction is complete. The amount varies across buyers and is often negotiated beforehand (with the manufacturers) to decide upon the final pricing. In addition, chargebacks are applicable to distributors and have to be accounted for accurately.
Rebates are shared as a percentage of sales and as performance incentives to wholesalers by pharma companies. Unlike chargebacks, rebates are more standardized and are paid at the same rate to all deserving parties.
To gain firmer control, manufacturers and others in the supply chain are gravitating towards advanced chargeback and contract management systems. The latest technology solutions are being put into place to ensure efficiency in monitoring and documentation.
These automated, highly-integrated solutions aim to:
Growth-oriented, new-age pharma and life sciences companies are investing in customized contract and chargeback management software, such as that developed by FlowRocket, to increase the effectiveness of their contract management processes. Designed with the latest tools for reporting and auditing chargeback/ rebate claims, the software automates validation processes effectively. It organizes data for accurate claim submissions as per industry standards and regulations.
For manufactures and their supply chain partners, the need of the hour is to simplify the processes of handling pharmaceutical discounts, chargebacks, rebates and quantity price breaks. Fortunately, the right software solution can effectively handle the above-mentioned challenges to maximize business profitability.
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