All pharmaceutical companies are shifting their focus on maximizing
revenue from their programs and contracts while ensuring regulatory
compliance. When a pharma product goes out into distribution
channels in the US, the dollar revenues do not come back in full.
The pharma industry deals with rebates to government entities and
incentives to certain retailers.
Chargeback is the difference between the price at which a product
is sold to wholesalers and the short realization at negotiated
prices with end customers. This must be reconciled with the
wholesale prices. There are also product returns whose cost must be
verified. All these claims, discounting or inventory reconciliation
represents potential revenue losses for the manufacturer if not
properly reconciled. The lost
revenue—’leakage’— amounts to 4.4 percent
of industry revenue.
To handle the entire chargeback processing, the firm selected SAP
Chargeback Management Solution, an add-on (Vistex) to SAP. The
solution has been implemented for the first time in India for a
generics company.
The contracts with the retail parties are now in SAP. This is a
major benefit since the other aspects of the customer, along with
the pricing conditions and the regular sales transactions etc are
already in SAP. The new system also has the roadmap to government
pricing and rebates process. These transactions give adequate
oversight into the data on rebates and realizations from the
customers. Further, the time taken for closure of books has reduced
significantly, since all the transactions are in one system.
Note: Dr Reddy’s Laboratories is an EDGE winner.
The complete list of EDGE winners is published in the October 2010
Print issue of InformationWeek India
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