Implications of GTN Adjustments Resulting in Unprofitable Prescriptions

The implications of the cumulative effect of multiple GTN adjustments resulting in negative net sales and unprofitable prescriptions are far-reaching. Pharmaceutical companies may need to refine physician targeting and salesforce incentive programs to avoid a disproportionate number of underwater unprofitable prescriptions. Examples of Unprofitable Prescriptions Commercial Rebates Coupled With Copay Buydown A $600 copay buydown [...]


Estimating GTN Accruals

Pharma companies prefer stable predictable sales and earnings growth. Unexpected material GTN true-up adjustments results in earnings volatility and may significantly impact the stock price. A disappointing surprise occurred in the fourth quarter in the example depicted below due to true-up adjustments for higher commercial rebates, more Medicaid & 340B business and unanticipated levels of [...]


Escalating GTN Reductions Puts Pressure on Sales

Pharmaceutical manufacturers have a funnel, depicted below, clogged by escalating gross-to-net (GTN) reductions. GTN Sales Funnel Components of the GTN Sales Funnel are as follows: Gross Sales at a drug’s Wholesaler Acquisition Cost (WAC). Note that gross sales are for prescriptions filled representing prescriptions written less reductions attributable to payer restrictions, patient abandonment due to [...]