Overview for Government Contracting

One of the steps in launching or acquiring your first product is deciding on government contracting. Fortunately, executing your government contracts is a straightforward process once you understand the basic timing and requirements. The first step in the process is answering two questions:

The answers to these questions directly impact how you would implement your government contracts. Each of the government contracts is administered by a different agency, with its own process and timing. The list below is a high level summary of the key contracts and planning items to think about. You can find links to example agreements and other reference information on our Resources page.

Medicaid – National Drug Rebate Agreement

• You must have a labeler code
• Requires at least one product listed with your labeler code and published on the FDA database
• Requires participation in all other government programs
• Agreement can be maintained by a company contact or an external third party
• Agreement remains in place until the manufacturer terminates or no products remain on the labeler code
• Changes to the contract and required price reporting are managed through the DDR web portal
• Rebates determined based on quarterly submissions
• Creates access to reimbursement in the Medicare Part B program with a corresponding J-Code

340B – Pharmaceutical Pricing Agreement

• Mandatory if you participate in Medicaid, but can also be entered into on its own
• Agreement must be maintained by a company contact
• Agreement remains in place until the manufacturer terminates
• Changes to the contract and price reporting are managed through the OPAIS portal
• Pricing determined based on quarterly submissions
• A manufacturer can offer additional discounts through the program at their discretion

Medicare Part D CGDP – Manufacturers Agreement

• Requires a P-Code for the labeler code
• P-Code and an executed Manufacturer Agreement must be completed one year prior to entering the program, but manufacturers can "piggyback" on another labeler's P-Code
• Requires an agreement with Palmetto GPA, the third party administrator (TPA)
• Can be stand alone
• Agreement must be maintained by a company contact through the HPMS website
• Agreement remains in place until the manufacturer terminates

Federal Supply Schedule – Solicitation

• All Single Source and Innovator drugs must be listed on the Federal Supply Schedule
• Does not require any additional government contracts and can be signed on its own
• Must have a labeler code, you can list products with other labeler codes on the agreement
• Must complete the solicitation package prior to contract award
• Agreement can be maintained by a company contact or an external third party
• Five year agreement, can be extended after the initial award
• Changes to the contract are managed through a modification process
• Pricing determined based on annual submission and manufacturer commercial discounting
• A manufacturer can offer additional discounts through the program at their discretion

Tricare – DoD Retail Refund Pricing Agreement

• Considered the retail extension of the Federal Supply Schedule
• Expected to be entered into in conjunction with the Federal Supply Schedule
• Not labeler code dependent, any product can be listed
• Agreement can be maintained by a company contact or an external third party
• Changes to the contract are managed through an email amendment process
• Rebates determined based on the annual calculations performed in conjunction with the Federal Supply Schedule
• A manufacturer can offer additional discounts through the program at their discretion
• Executing the TRICARE agreement is voluntary; however, paying rebates is not

If you have any questions on government contracting or would like more details about timing or process, drop me a line through the contact form below. We will be glad to answer any questions you may have.

Published on April 30, 2021 by Scott Hoffman

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