Market access
Gross-to-Net (GTN) Pricing and 340B Compliance Advisory
Model every deduction between list price and net revenue, with 340B obligations in view.
Definition
What is gross-to-net optimization?
Gross-to-net (GTN) optimization is the process of modeling and managing the deductions between a drug's wholesale acquisition cost (WAC) and the net revenue a manufacturer keeps, including rebates, chargebacks, fees, discounts, and patient support costs. Its goal is to find revenue leakage early and set contract and program guardrails before it grows.
What is 340B compliance for manufacturers?
The 340B Drug Pricing Program requires participating manufacturers to offer covered outpatient drugs at or below a statutory ceiling price to eligible safety-net providers called covered entities. Manufacturer-side compliance centers on preventing duplicate discounts, where one unit receives both a 340B price and a Medicaid rebate, and on monitoring contract pharmacy and claims data.
This guide is part of our market access strategy work. Service fees paid to wholesalers and distributors are covered in our guide to bona fide service fees, and operational 340B work appears under trade relations.
Engagements on this topic are led by Osama M. Elhelw, RPh, LSSBB, Managing Partner of HealthBridge Consulting. View credentials and licenses.
| Deduction | What it is | Why it needs a guardrail |
|---|---|---|
| Rebates | Payments to payers, pharmacy benefit managers, and state Medicaid programs | Terms differ by contract and plan, so small changes move net price |
| Chargebacks | Credits to wholesalers when a contracted customer, including a 340B covered entity, buys below WAC | Volume shifts between channels change the deduction |
| Distribution and service fees | Fees paid to wholesalers, distributors, and specialty pharmacies | Fees that do not meet bona fide service fee criteria can affect government price reporting |
| Prompt-pay and volume discounts | Discounts for timely payment and purchase volume | Terms must match actual payment behavior |
| Copay assistance | Manufacturer support that lowers patient out-of-pocket cost | Often recorded as a revenue deduction, depending on company accounting policy |
| Returns | Credits for returned or expired product | Return rates need tracking against forecasts |
General information for planning purposes, not legal advice. HealthBridge Consulting works alongside your legal and compliance teams.
Our approach
How we will approach gross-to-net and 340B compliance
Step 01
Build the waterfall
- We will build a gross-to-net waterfall by product, channel, and payer.
- We will reconcile it to finance accruals.
Step 02
Test contract terms
- We will test proposed contract and program terms for average manufacturer price and best price effects.
- We will flag terms that need legal review.
Step 03
Define 340B controls
- We will map duplicate discount, diversion, and contract pharmacy exposure.
- We will define monitoring controls and data requirements.
Step 04
Set governance
- We will set a review cadence with finance, legal, and compliance.
- We will report leakage and exceptions in one dashboard.
Keep reading
Related guides
Market access
Market access strategy
Coverage, pricing, reimbursement, and patient support planned as one system before launch.
Read the guideMarket access
Payer mix optimization
See how coverage, denials, and abandonment differ by payer segment, and what each gap costs.
Read the guideMarket access
J-code crosswalks
Map every NDC, package size, and billing unit to the right code before the first claim is filed.
Read the guideTrade relations
Bona fide service fees
Test distribution and pharmacy fees against the four bona fide service fee criteria.
Read the guideQuestions about gross-to-net and 340B compliance
What is gross-to-net in pharma?
Gross-to-net is the gap between a drug's gross sales at list price and the net revenue left after rebates, chargebacks, fees, discounts, and other deductions. Manufacturers usually track it by product, channel, and payer.
What is a 340B duplicate discount?
A duplicate discount occurs when a manufacturer pays a Medicaid rebate and also provides a 340B discount on the same drug. Federal law prohibits it, so covered entities and manufacturers need controls to prevent it.
Does HealthBridge Consulting provide legal advice?
No. The firm provides operational and commercial analysis and works alongside your legal and compliance teams, who make the final determinations.
How often should gross-to-net be reviewed?
A quarterly review is a common minimum, with extra reviews after a contract change, channel shift, or launch, because deductions can move quickly.
Talk to us about gross-to-net and 340B compliance
Tell us about your organization and we will respond within 24 business hours.