As MFP Approaches, Transparency Is More Important Than Ever

Today’s guest post comes from Angie Franks, Chief Executive Officer of Kalderos.

Angie discusses how the Maximum Fair Price provision of the Inflation Reduction Act of 2022 will challenge providers, pharmacies, and manufacturers. She explains how Kalderos’ Truzo platform could reduce duplicate claims and address compliance issues.

To learn more, register for Kalderos’ October 25 webinar Cracking the MFP Code: How Flexible Technology Helps You Navigate an Evolving Landscape.

Read on for Angie’s insights.

As MFP Approaches, Transparency Is More Important Than Ever
By Angie Franks, Chief Executive Officer, Kalderos

The drug discount landscape as it stands today is fragmented, layered, and unsustainable.

In particular, the 340B Drug Pricing Program has strayed from its original purpose and no longer serves its ostensible goal. Duplicate claims for the same dispensed product under both 340B and the Medicaid Drug Rebate Program (MDRP) have risen sharply in recent years. Purchases under 340B soared 129% from 2018 to 2023, exceeding $120 billion. The resulting increase in noncompliance is costing the U.S. healthcare system billions of dollars.

But the challenges facing drug discount program stakeholders extend far beyond the rapid growth of 340B. Maximum Fair Price (MFP) is upon us with effectuation timelines shorter than ever and a staggering number of providers slated to be impacted.

Set to take effect in 2026, the MFP provision of the Inflation Reduction Act will increase complexity across multiple drug discount programs, adding more layers of confusion and duplication to an already byzantine system.

Under MFP, manufacturers are under a statutory obligation to make the maximum fair price for a specific drug available to dispensing entities. They can do so by either 1) ensuring the price paid by the dispensing entity when acquiring the drug is not higher than the MFP, or 2) providing reimbursement post-transaction for the difference between the dispensing entity’s purchase price and the MFP. This must happen no later than 14 days after dispense.

If that’s not troubling enough, the same types of problems that plague 340B—lack of transparency and inadequate compliance controls—will apply to MFP. This will spawn a new form of duplicate discount if not addressed.

It may be difficult to determine whether a claim should be subject to the MFP or a 340B price at the point of dispense. For an MFP product, if the patient has Medicare Part D coverage, the pharmacy will be eligible for an MFP payment unless the 340B price is lower and the dispense is to an eligible 340B patient. Subsequently, a covered entity may submit a claim for the 340B price on the same dispense. As a result, there is a high risk that the manufacturer may pay a duplicate discount—an MFP price and the 340B price on the same dispense. If these claims are not reconciled in a single ledger or platform, non-compliance and manufacturer payments will explode.

A CLAIMS-BASED SOLUTION

The good news is technology now exists to simplify drug discount program compliance through a claims-based model. Recently introduced by Kalderos, Truzo is a platform that facilitates transparency and cooperation between drug discount system stakeholders.

A claims-based discount model establishes a direct connection between manufacturers and covered entities (CEs) for claim submission, adjudication, and payment. Instead of purchasing MFP or 340B drugs through wholesalers under a replenishment model, CEs purchase them at the Wholesale Acquisition Cost and then get a discount directly from manufacturers. They receive 340B or MFP benefits as a cash discount for each unit dispensed within days.

To build trust, Truzo provides both manufacturers and CEs with a centralized ledger of claims and discount data, providing full transparency and helping to prevent disputes. Unlike other solutions, Truzo enables visibility into the same dataset for all stakeholders, proactively ensures compliance with drug discount program rules, and allows direct payment to CEs—without draining costs or resources.

Using sophisticated data models and configurable data logic, the Kalderos platform enables both proactive and retrospective management of drug discount programs. With Truzo, drug manufacturers and CEs can identify and resolve potential compliance issues before they create problems.

TOWARD GREATER COOPERATION

The drug discount ecosystem as it currently operates is ill-equipped to handle any more complexity. Specifically, the existing accumulation/chargeback replenishment model for drug discounts offers no visibility and is a breeding ground for overpayments and noncompliance. For manufacturers and providers, a claims-based discount model is the only option that can ensure compliance with the MFP statute.

Pharmaceutical manufacturers and providers are united in a common goal: to enable better health outcomes. When stakeholders work together, they can better meet their good-faith obligations to resolve potential disputes. A direct discount model and transparent ledger will reduce friction and enable these stakeholders to work better together.

CONCLUSION

Through a singular platform for all programs, we can foster greater trust between stakeholders, ensure program compliance, and get CEs faster and accurate discounts. Truzo is the end-to-end discount management platform that can help manage them with confidence.

Kalderos is hosting an upcoming webinar this month on MFP and its impact on drug discount program stakeholders.

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