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1. How much will the rebate be?
Participating members will receive a quarterly rebate of between 2% and 6% of the “WAC” price (approximately $3,040 per 400 milligram dose) based on the total volume of Cimzia purchased by all of United Rheumatology’s participating members, as long as United Rheumatology’s membership meets the lowest tier. Based on current data, we believe that United will exceed the lower tiers, and the rebate will be at the 5% level starting in Q4, 2015. Because the program will only operate for one month in Q3, the rebate may be at a lower tier for that month.
a. Does United Rheumatology know what the rebate will be for United Rheumatology’s members?
We cannot predict the exact rebate with certainty; but we have acquired data upon which we have made certain assumptions. Based on data we have assessed to date, we believe we will qualify at the 5% level upon launching the program. If our assumptions are reasonably correct, that would be $152 per dose, or $1976 per patient per year.
2. Who can receive the rebate?
The volume-based rebate will be available only to current, active Annual Practice Members of United Rheumatology.
3. How will this work, technically?
a. You will be provided a contract number that you will attach to all purchase orders for lyophilized Cimzia. This absolutely must be done! If there is no contract number on your order, you will not get credit for purchases and you will not receive the rebate. The contract number is URCIM.
b. United Rheumatology will list you on our Roster, together with your DEA number and provide this Roster to the manufacturer, UCB Inc.
i. GPOs identify members to manufacturers by their member Roster, and thus listing the contract number is a critical step.
c. You will thus be identified as using United Rheumatology’s GPO as your primary GPO for the purchase of lyophilized Cimzia, and that will entitle you to your rebate.
4. How much will I pay for lyophilized Cimzia as a part of this program?
The pricing you will pay to purchase lyophilized Cimzia may increase by a small amount. For current United Rheumatology members purchasing through CuraScript, the GPO price is about $2026, and the new price will be about $2058 (a difference of $32). We are fully aware of this increase, and it is more than fully mitigated by the rebate to follow (estimated @ a savings of $152 per dose or $1976 a year per patient).
5. How is the price for a drug determined? And why will my price go up by this small amount?
a. How does a distributor or wholesaler arrive at its sale price? The manufacturer sells the product at a price, and then prevailing Federal regulations intervene, to ensure that certain government agencies always receive the best price. Thereafter, distributors and wholesalers are able to use methods such as prompt pay discounts and the return of administrative fees to subsidize the cost of the drugs paid by the physicians and other purchasers. Such measures may be used to lower the price of lyophilized Cimzia to the physician purchaser.
b. Because United Rheumatology will now be the GPO from whom you are acquiring lyophilized Cimzia, and with the exception addressed in question (7) below, United Rheumatology will receive and retain the 2% GPO administration fee in full to support its operations.
6. When will I receive my rebate and in what form?
The rebate will be provided to United Rheumatology by the manufacturer within at most 60 days of the end of each quarter (we are told 30 days can be expected), and United Rheumatology will distribute the rebate as a check within another 30 days.
7. What is the worst that can happen?
Commencing with the fourth calendar quarter of 2015, if the volume of sales is not sufficient to reach the first tier in any full calendar quarter during the term of the Agreement, you will have paid approximately 1% of WAC above the current market GPO price. In that circumstance only, United Rheumatology will return a portion of the administration fee that it will receive from the manufacturer for administering the GPO to the physician to mitigate that approximate 1% difference.
8. Why shouldn’t I try to find such an opportunity elsewhere and avoid having to pay the United Rheumatology Annual Practice Membership fee? I have heard rumors that such an opportunity may occur.
We cannot speak to rumors. However, United Rheumatology currently has over 300 active annual practice members. We have surveyed a subset of this group and determined from that subset that the annual purchasing would, if maintained, already reach the 5% rebate level. Rheumatologists who choose to go it alone will be on their own to achieve any performance-based rebate tier. An individual rheumatologist might have to treat 40 or more patients a year to achieve an equivalent rebate. Furthermore, United is growing rapidly, and may reach the 6% tier within the next year. Thus it makes sense to work together: “United we are strong.”
In order to partake in this program, we are attaching the “Group Purchasing Program Agreement.” Please return an electronic copy to Amanda Byrnes via email – within seven (7) days as well as an original copy to United Rheumatology, LLC, 521 Hauppauge Road, Suite 307, Hauppauge, NY 11788.
In sum, it’s simple. To receive the rebate of 5% of WAC starting at the end of the quarter: sign and return the Group Purchasing Program Agreement and purchase your Cimzia through the United Rheumatology GPO by putting the United Rheumatology-UCB contract number, URCIM, on your Cimzia purchase orders, starting with your next purchase!
Should you have any questions about this opportunity, please do not hesitate to contact me.
Max Hamburger MD