An integrated approach to unlocking more value in your GTN strategy

Key takeaways:

• GTN transformation is no longer optional. Pharma leaders need an integrated, end-to-end approach to stay competitive and profitable.
• AI and connected data unlock real savings. Top companies are using digital tools to highlight hidden opportunities, optimize decision-making and recover or mitigate lost revenue.
• Lasting impact requires scale and alignment. Cross-functional teams, agile platforms and strong governance drives value realization.

In the highly dynamic and increasingly complex U.S. pharmaceutical landscape, the evergreen challenge of managing gross-to-net (GTN) has escalated to a critical organizationwide imperative for pharma manufacturers. Concessions, already numbering in the hundreds of billions of dollars in total manufacturer rebates and discounts for top brand-name drugs ($356B in 2024, according to the latest data available at the time of this writing), are only deepening. Adding to this pressure are significant shifts in policy, such as the Inflation Reduction Act (IRA), unfettered growth in 340B and potential initiatives like the Most Favored Nation (MFN) executive order.

The economic realities for pharma manufacturers are fundamentally reshaping. Optimizing GTN is no longer merely about cost containment; it is about strategic market navigation, precise value realization and ultimately sustainable profitability.

Tackling the multifaceted GTN challenge requires a concerted and integrated approach across functions, people, process and technology. By strategically addressing these interlocking dimensions, pharmaceutical companies can transcend the traditional GTN challenges, transforming GTN management processes into a powerful engine for sustainable growth and competitive advantage in a constantly evolving market.

People

GTN is an interconnected process that permeates all functions; however, ownership of the various components is fragmented. Finance handles forecasting. Market access and pricing sets contract terms. Contract operations manage execution. And brand teams focus on top-line revenue and pull-through. Generally, no one function is responsible for optimizing GTN holistically in a coordinated way. There are two critical process shifts that companies need to make to realize transformation:

• Establish an enterprise GTN lead. This role holds up end-to-end responsibility for GTN optimization across the organization, providing a holistic lens to analyze and find opportunities for improvement.
• Create a revenue forensics COE. This team has broad experience and skillsets that span strategy to operations, an investigative mindset and a deep tool kit that is applied to stitch various data silos to support proactive discovery and continuous improvement to ensure a comprehensive approach to maximizing net sales.

Process

Enhancing internal processes and information flow is fundamental to operationalizing GTN optimization. Creating these processes means companies must:

• Create new ways of working and cross-functional collaboration. GTN-related data and information flow must be seamlessly shared across functions, ensuring consistent, real-time data exchange.
• Have agile decision-making frameworks. Move away from static, semiannual planning cycles to more agile decision-making processes that can react swiftly to market shifts, policy changes and emerging GTN pressures.

Technology and capabilities

Digital transformation, inclusive of foundational data capabilities; domain-led decision support tools; advanced analytics and proactive insight generation; AI and machine learning; and agentic AI, serve as the key enablers and accelerators of organizationwide GTN transformation. In the next section, we will look at the foundation for pharma companies to accelerate GTN transformation.

Leading pharma companies are using digital transformation as a major part of their GTN optimization strategy. Here are the five key pillars they’re leveraging:

Pillar 1: Orienting to a quality of access mindset for better top-line growth

Real-world impact: A company realized a 5%-7% point lift in their 84-day fulfillments rate

Access and payer management continues to be increasingly complex, especially across products with multiple indications. The mileage you get out of the payer contracts is not just dependent on the formulary inclusion and competitive positioning. There are several other factors that impact the mileage to patient fulfillment such as the exact prior authorization (PA) and medical policy criteria that the patients must meet, the time it takes to get the PA process completed, usage of co-pay maximizer, co-pay accumulators, etc.

A significant number of patients and healthcare professionals (HCPs) don’t complete the patient journey to getting the medication because of these factors, even when the drug is on formulary. Hence, more than the quantity of access, the quality of access achieved through contracting matters. A winning access strategy begins with a precise understanding of payer nuances and how they shape patient fulfillment, along with a targeted segmentation of HCPs who are more likely to help navigate and secure medical exceptions (pull- and push-through).

By leveraging gen AI, manufacturers have started to parse through detailed payer medical policies and prior authorization documents. They’re capturing this information into structured data that can be more easily analyzed for the variations in payer management. Further, this data can be integrated with traditional HCP and patient-level claims data to quantify the impact and identify actions to take.

We’ve seen clients realize success using AI in this way. For instance, by optimizing for the field reimbursement manager role and improving hub operations at one company, we enabled an ~6% point lift in the 84-day fulfillments rate observed and an estimated increment of +20 days in the engaged patient duration on therapy driving persistence.

In another instance, we were able to help a company build a better awareness of patient eligibility nuances across payers. Enabling payer negotiations with competitor intel drove a ~10% relative lift in brand market share.

Pillar 2: Contract optimization for pre- and post-deal decision-making

Real-world impact: A ~1% optimization in discretionary rebates and discounts and 10% to 20% reduction in hours spent drafting and processing contracts

Once you’ve evaluated your access needs and set the strategy, incorporating quality, there’s a need to optimize those investments. To optimize rebate and discounts, a holistic scenario evaluation that incorporates financial assessment from multiple perspectives (manufacturer, customer and competitor) is critical to assess risks and opportunities. Even a 1% rebate optimization on $10B in discretionary rebates can lead to $100M in savings.

The continuous feedback loop from evaluating past deals in real time and learning from the drivers of variance is equally important to optimize current contracts as well as to better inform future decisions.

Manufacturers have supercharged pre- and post-deal capabilities through intelligently integrated data (e.g., syndicated data, rebate claims, CMS), sophisticated analytics (curated analog libraries, machine-learning share-shift models, payer-level forecasts) and connected tools across the decision-making flow. These have allowed for faster turn-around times and better demand predictions (within 10% of expectations).

Similarly, digital transformation in contract life cycle management (CLM) increases deal agility, appropriate pricing and enhanced customer experience with signing contracts and brings consistency in contract terms to minimize risk, standardize internal processes and create a robust repository of contracts across segments.

CLM platforms streamline internal and external processes and enable advanced analytics and generative AI on top of the contract repository to assess contract terms and draft amendments. This can lead to a 10%-20% reduction in hours spent drafting and processing contracts.

Pillar 3: GTN operational excellence

Real-world impact: Reduce processes from days to minutes (>50% time-saving) and increase accruals accuracy

Increasing speed and accuracy in a dynamic contracting environment requires transforming GTN discount and revenue forecasting to be more granular and data-driven and leads to improved cash and working capital management as well as minimizes earnings restatements.

Within each segment (e.g., commercial, Medicare, Medicaid) and channel (e.g., providers, specialty pharmacies, retail pharmacies), there are many subsegments and customers that need to be forecasted, each with intricacies and interdependencies. Further, top-down and bottom-up forecast approaches are generated independently and often not reconciled and adjusted consistently.

Manufacturers have implemented GTN forecasting platforms to help resolve this problem, leveraging technology to connect disparate sources and systems across direct sales, payments and contract management, standardize common identifiers and nomenclature and enable scenario modeling to refine forecasts continuously. Forecast development and iterations reduce processes that used to take multiple days to minutes and have improved in accuracy.

Pillar 4: Revenue leakage

Real-world impact: $25M+ worth of fraudulent co-pay card and patient assistance program reimbursements and $40M+ worth of payer rebate anomalies

Traditional approaches in mitigating revenue leakage are largely business-rule driven and siloed by domain. These systems have worked well for pharma over the years but aren’t sufficient as processes evolve, new policies emerge and customers adapt. Industry benchmarks suggest there’s a 3%-5% revenue leakage that still exists (even with current processes and checks in place).

Agentic AI and automation have begun to transform tedious processes, such downloading invoices and claims data; customer and class of trade research; invoice comparisons; and formulary validation, freeing up resources to support more tasks and processes. The additional capacity can then be repurposed to higher impact activities.

Detecting anomalies and patterns across claims, entities (e.g., plan, pharmacy, covered entities) and networks (e.g., 340B-covered entity to contract pharmacy) is one such area where additional resources can be allocated. This anomaly detection requires connected data (across commercial, Medicaid, third-party data, etc.), advanced AI- and machine learning-driven techniques and new thinking.

Manufacturers have stood up revenue forensics teams and armed them with flexible and scalable advanced analytics and AI capabilities to identify and monitor anomalies. These teams work in close partnership with existing teams to validate and take action to recoup paid rebates and discounts, as well as defend going forward before payments are made.

We’ve seen a forensic and AI- and machine learning-driven approach help identify incremental revenue leakage. We were able to help clients identify $40M+ of potential recovery in rebate anomalies within a year across four brands. In another case, we were able to identify $50M+ of volume through ineligible pharmacies suspect of receiving product through a 340B alternate distribution model. And yet in another case we were able to help a client identify and recoup $25M+ worth of fraudulent co-pay card and patient assistance program reimbursements.

Pillar 5: Commercial resource allocation

Real-world impact: Co-pay program optimization can lead to a 5%-20% upside on impacted net sales

Net sales is often thought of in broad stroke assumptions by segment and doesn’t capture the nuances of the multiple GTN concessions that “stack” on any given script (e.g., co-pay card offset, discretionary rebates, mandatory rebates, 340B discounts, specialty pharmacy discounts and provider discounts). By leveraging the intelligence gathered from the other four pillars and integrating GTN at the script level to evaluate net sales at across various entities (e.g., HCP, HCO, geography, payer), brand teams can assess whether current resource allocation across personal and nonpersonal and digital investments are focusing on the right areas and generating appropriate returns. Further, brand teams can right-size co-pay support needs and program design to ensure the appropriate patients are receiving the benefits. Optimization in this area will lead to both GTN improvement and net sales growth.

This requires a constant stream of connected data across GTN line items to the levels that sales and marketing investments are viewed (e.g., connecting to field sales targeting and call planning, digital engagement, direct-to-consumer spend).

Leaders are looking for impact and adoption to be realized as soon as possible. This requires a shift in mindset from exploration to designing for value realization and scale up front. Here are areas companies can focus on right now to make an impact:

1. Perform a readiness assessment and lay out a prioritized roadmap

Conduct a discovery and readiness assessment across current capabilities and in-flight and planned initiatives to identify synergies. Capture pain-points and opportunities across the market access organization, leveraging both outside-in perspectives to explore the art of the possible and identify the best-in-class and emerging innovations, as well as inside-out perspectives to right-size the capabilities based on portfolio, team needs, priorities and enterprise strategy.

Conduct diagnostics to quantify potential ROI on GTN opportunities (such as the level of rebates and discounts paid across channels, level of revenue leakage unaccounted for, potential up-lift due to better decision-making) as well as value stream mapping to quantify time spent across manual processes.

2. Initiate a programmatic approach to business transformation in market access

Developing a strong business case to justify investments involves starting with high impact and ROI use cases in contracting, defining a clear vision and articulating and quantifying the value of proposed initiatives.

Elevate the program beyond market access. Given the cross-functional nature of market access and GTN initiatives, executive sponsorship helps to ensure that initiatives aren’t done in a silo and are connected with other organizational functions, such as finance and brand.

Establish a transformation team and governance structure to initiate business transformation, with a comprehensive focus across data and technology, as well as people and processes.

3. Enable ongoing DevOps

Focus on modernizing infrastructure and integrating data platforms first and building data products that are foundational to all reporting, analytics, decision support and AI and gen AI capabilities.

Create an ecosystem of capabilities. Think end-to-end and connected through a broad ecosystem of tools, including self-service business intelligence tools, fit-for-purpose analytic apps, third-party decision support and process software, analytics workbenches for AI and machine learning and more—all on top of the common data foundation.

Delivering value continuously. Build credibility through early successes and pilots, delivering incremental capabilities and continuous and frequent value. Working in an agile mode also ensures continuous alignment and prioritization on the most impactful business needs.

4. Establish business adoption and change management principles at the start

Continuously innovate and develop with a dedicated team to nurture these capabilities and ensure they incorporate user feedback and evolve with the product portfolio, competitive environment and market access and policy landscape.

Creating a change management plan and ensuring cross-collaboration are critical to launch and sustain these transformations, requiring early business and digital engagement (working three-in-a-box model with business, digital teams and the GTN and revenue forensics function).

Create measurements for impact. Focus on comprehensive impact across leading and lagging indicators and measure across efficiency (e.g., bid turn-around time, process efficiency and increased time on strategic work) and effectiveness (e.g., learnings of performance drivers, optimized GTN, accurate forecasts, recouped and mitigated revenue leakage).

As the pace of landscape evolution increases, technology is the only way to keep up. The time to act is now. While you can continue to make incremental improvements in the individual pillars, there’s a real opportunity to leverage technology to make a step change in GTN optimization across the organization. More than an operational priority, GTN transformation is a path to delivering on the promise of accessible, high-value care for the patients who need it most.