As readers may be aware, pharmaceutical manufacturers are granted a one year grace period to restate the liability to government entities after an acquisition. If the restatement is not completed within the one year time frame, or not done at all, then any additional liabilities found are subject to penalties
and/or fines. Recent examples from the regulators have resulted in significant fines for other pharmaceutical companies.
With restatement, there is the possibility that significant liabilities, which were not disclosed at the time of the acquisition, are identified. It is possible that discovery of these liabilities could trigger a revision to the purchase price.
There are a number of calculations and variables that determine the total liability to the government entities. In addition, the process of selling pharmaceuticals typically involves sales and shipments to a direct customer (typically a wholesaler) and then sales and shipment to an indirect customer before the pharmaceutical goes to the end consumer. There are also a number of transaction types that must be taken into account to determine the actual price per unit in which the pharmaceutical was actually sold.
Usually these transactions are in their own systems. Each of these systems is optimized for execution of individual transactions. Extracting large sets of data typically require specialized tools and system specific expertise. Extraction of data is very resource intensive.
Following the document flow across systems also requires an understanding of how to link transactions. Again, this requires specialized resources. Investigations are usually performed one transaction at a time. This is very time consuming.
We leverage high performance database technology, SAP HANA, to combat the compressed timeframe for a restatement. The key enabler for this rapid preparation of Government Pricing Restatement is the development of a common data repository on SAP HANA for all relevant data to create synergies including:
● Common development and maintenance capabilities
● Common querying and output tools.
● Common user administration and security
● Platform for standard cross reference definitions
Subsequent to development of common data repository, our solution expands on building reconciliation, cross-references, recalculation engine , system retirements, and scalability features for compressing time in future developments. Our solution with SAP HANA database, has enabled a government pricing restatement that would generally take 1-1.5 years to be accomplished in only five months, resulting in faster response to management and third party vendors related to the restatement. Finally, the rapid government pricing restatement solution also enables additional costs savings due to system retirements.
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IMPORTANT NOTE: Madiba is not associated with or sponsored by the any of these registered or trademark owners.
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