APRIL 2016 | PHARMACEUTICAL PROCESSING
timing and nature of concessions associated with
product launches will have a substantial influence
on baseline product pricing, and could affect
the profitability of the product throughout its
Given their efficacy in the branded drug
market, imposing inflation penalties for generic
drugs appears to be a viable method of price
control. A 2011 study by the Office of the
Inspector General observed that the financial
burden posed by the rising costs of branded
drugs was mitigated by the provision of rebates
from pharmaceutical manufacturers.1
Generally, reforms in pharmaceutical revenue
management are slow to take effect. By contrast,
the swift passage of Section 602 highlights the
impact that public perception can have on the
speed at which these changes occur.
Price spikes in the pharmaceutical industry are
not a new phenomenon, nor does this legislation
effectively prevent them from happening. It
seems clear, however, that as the public becomes
increasingly more influential via social media,
the practices of a pharmaceutical company are
subject to more scrutiny as well.
Section 602: Important Next Steps
Revenue management executives at drug
companies will want to take specific next steps
before Section 602 comes into effect.
Per the legislation, manufacturers will have to
pay an additional rebate on top of the basic
rebate for generic drugs. Like branded drugs,
the incremental fee is defined as the difference
between the current quarter AMP and the
Baseline AMP adjusted for inflation. The
Clean rooms require doors with a tight seal,
low air infiltration and reliability.
Rite-Hite’s clean room doors meet and
exceed those capabilities with simple designs,
low maintenance as well as complying with
FDA, USDA & cGMP guidelines.
Rite-Hite also provides the highest level of
safety, global distribution and support.
ritehite.com | 800.456.0600
Interphex Show - April 25-28