Panel Discussion: Finance leaders roundtable – Pioneers and innovators of GTN management & financial success – blueprint for thriving
Ranish Singhvi Vice President, Finance Accord Healthcare; Darpan Jhaveri Senior Director - US Revenue and Inventory Accounting Insmed Incorporated; Joe Willadsen, Sr. Finance Director, Head Gross to Net GSK; Kevin Nee VP of Finance Collegium Pharmaceutical, Inc.; Timothy Kocses Executive Director, US Pharmaceuticals Finance Controller Bristol Myers Squibb
Timothy Kocses, Executive Director of US Pharmaceuticals Finance Controller, moderated a panel discussion at the Pharma/Biotech GTN Summit in November 2023 in Philadelphia, Pennsylvania. The panel included financial experts; Jo Willadsen, Senior Finance Director at GSK, Darpan Jhaveri, Senior Director of US Revenue and Inventory Accounting at Insmed Incorporated, Ranish Singhvi, Vice President of Finance at Accord Healthcare and Kevin Nee, Vice President of Finance at Collegium Pharmaceutical Inc.
The panel provided valuable insight on how to successfully implement Gross to Net (GTN) systems, and how effective cross functional collaboration can drive financial success at an organisation.
GTN payor streams
The session began with an interactive poll for the audience; “What GTN payor stream is most challenging for your organization to forecast with a high level of precision?” Medicaid rebates were nominated as the most challenging with 43% of the vote.
Jo stated the difficulty of each GTN payor stream differs year to year and is largely dependent on external circumstances at the time. For example, Medicaid rebates were particularly challenging for GSK to execute during and after the Covid-19 pandemic. Darpan emulated this statement, highlighting that every pharmaceutical company is different and therefore it is unsurprising that they would favour GTN payor streams over others. At Insmed Incorporated, coverage gap is the most challenging payor stream. This is attributed to their product profile being ‘Part D’ heavy, referring to a Medicaid drug coverage that helps to lower the cost of prescription drugs. Whist Ranish acknowledged that Medicaid rebates can be complex, he argued they are not as challenging as sales returns. During the pandemic, customers often took advantage from the sales return side, making it difficult to track what dollar credit value should be given back to wholesalers. Kevin supported this claim, sharing that sales returns are the most challenging in terms of level of precision. At Collegium Pharmaceuticals, this GTN payor stream takes the longest to build history on and has the largest impact on net revenue.
A question from the audience led a discussion on ‘true ups’ and the processes that pharmaceutical companies use to manage lags in information and data. In accounting, the term “true ups” refers to the process of reconciling or adjusting a financial account or transaction to reflect the actual amount. At Collegium, Kevin said that estimates are calculated monthly but to a more precise degree on a quarterly basis. For their business, it is more important to analyse and flag trends during monthly results to mitigate issues that may occur annually – all members of the panel agreed with this. The processes put in place to deal with lags largely depends on the information being managed. With more complex matters, Kevin said Collegium tend to wait until quarter end. Information, such as invoices, can be dealt with every month as external vendors are used which can scrub and pull data quickly. However, he reiterated that it is best practise to not track data monthly, as it is likely results with be inaccurate due to delays with external systems.
GTN Systems The panel also focused on gross to net payor systems, and whether it is best to automate them. At Accord Healthcare, Ranish shared that all GTN systems are inhouse; “it’s better to have processes in place first, before we automate our systems.” All speakers agreed that the priority is to simplify current systems, and then automate model to model. When new GTN systems are implemented, there must be appropriate measures in place to ensure successful use. Kevin emphasised a need for organisational alignment and structured processes for people to follow. Several groups e.g., “commercial operations, market access, commercial finance”, acquire different data that can be utilised within a GTN system. Agreeing with this, Jo highlighted that “change management is a big factor when implementing new systems”. Following automation of GTN systems, roles and responsibilities within a company are likely to change. Therefore, is it imperative that there are systematic approaches available to deal with the transitioning and transformation of an organisation’s technologies.
Cross-functional collaboration
When it comes to GTN, the speakers agreed the cross-functional collaboration across various teams at an organisation is essential for success. Danish said, “he can’t emphasise enough how important it is for GTN to have cross functional collaboration.” Rather than the onus being placed on one team, there should be a collective responsibility across a company. At GSK, GTN is described as a “big needle mover” within the company - several teams, primarily market access and trade, share the same goals in respect to GTN. To achieve these goals, Ranish stated that there must always be healthy discussions between teams. An example of this can be seen at Accord Healthcare, where fortnightly calls are held with market access and finance departments to discuss executive decisions and alignment. Thomas Kocses also shared an example of cross-functional teamwork at Bristol Myers Squibb. Trade, cash to order and GTN teams work closely, and are aligned based on the therapeutic area they operate in e.g., oncology, cardiovascular, immunology and haematology. There are also finance and treasury personnel who are part of the process, due to large outgoing payments and to check on investment progress at an organisation. “Collaboration can’t just be a quarterly or monthly thing; it has to be everyday” – Kevin Nee.
In summary, this panel discussion provided valuable insight into GTN management systems and cross functional collaboration, from the perspective of industry finance leaders.
