What Physics Teaches Us About Provider Based Contracting for Pharmaceuticals
The introduction of average sales price based reimbursement (ASP) in 2003, has brought about a challenging landscape for manufacturers of physician-administered medications. However, three lessons from high school physics can help manufacturers better understand provider contracting and manage long-term ASP.
One of the peculiarities of the US healthcare system is the handling of physician-administered medications. While a healthcare provider typically has no financial involvement in prescribing an oral medication, if the treatment under consideration involves a physician-administered medication, it can have financial implications for the physician.
Although there are certainly exceptions, in most circumstances for physician-administered medications, the physician practice will purchase the medication, administer it to patients, and then seek reimbursement from a third-party payer such as a health insurer or Medicare.
